Robert Maynard
Tax slavery?
By Robert Maynard
Quite a few years ago a group called The International Society for Individual Liberty published a series of pamphlets on various subjects related to the overall issue of liberty. One of these pamphlets was entitled "WE MUST END TAX SLAVERY NOW." The pamphlet deals with our tax system and it goes into some detail over just how much of a tax burden the average taxpayer is settled with. Since this pamphlet was written, that burden has gotten worse. As bad as the tax burden is, I have always seen it as a symptom of a problem and not the main problem in itself. The main problem was pin pointed by former U.S. Ambassador to the UN, Dr Alan Keyes in a Presidential run. Dr. Keys asked the question of just how much of our money was the government claiming ownership of if they thought that they had the right to raise the tax rate as high as they chose? His answer was that they are claiming 100% ownership in principle and allowing us to keep a certain percentage at their discretion, as they saw it as their right to set the tax rate. He then went on to point out that, by definition, when someone lays claim to 100% of the fruits of our labor they have made slaves out of us. Using this argument he pushed to replace the income tax with a consumption tax. That would put more discretion over how much we should pay the government in the hands of the taxpayer.
Such arguments led both the ancient Greeks and our Founding Fathers to oppose direct forms of taxation as akin to slavery. Thomas Jefferson put it this way: "...a wise and frugal government, which shall restrain men from injuring one another, which shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government." Instead they favored indirect taxes on transactions such as excise taxes and tariffs. User fees were another method of generating the needed revenue to support the limited functions of government. Excessive taxation was considered a thing to be avoided. Besides the level of taxation, the reporting of one's income to the state was seen as an intrusive assault on our privacy. This attitude toward taxation carried over into the 19th Century.
In a 1976 article for the Freeman entitled "The Power to Tax is the Power to Destroy," Dr. Clarence Carson quotes from an opinion put forward by Chief Justice John Marshall in the 1819 case McCulloch v. Maryland. "That the power to tax involves the power to destroy; that the power to destroy may defeat and render useless the power to create ...." Of course the question in this case was an attempt by the State of Maryland to tax a federal bank. Chief Justice Marshal was applying the stated general principle of taxation to the relationship between political entities. Dr. Carson simply broadened the application to include the relationship between a political entity and private citizens.
What brought all this to mind was an Associated Press story cited by Rush Limbaugh on his radio program the other day. The writer of the story was arguing for an extension of unemployment benefits and against keeping the Bush tax cuts in place for the upper income brackets so that they do not see a massive tax increase. Numerous free market economists have argued for extending these cuts on the grounds that it would be the best way to stimulate the economy. The AP article was trying to make the point that extending jobless benefits would be a greater stimulus to the economy. After making the case for why extending these benefits would provide the needed stimulus, a case is made for why an extension of the tax cuts to upper income brackets would not. Here is a quote from the article where the comparison of paying out benefits is made to extending the tax cuts: "By contrast, money given to higher-income families — say, through tax cuts — tends to deliver less economic benefit because those taxpayers typically save a big chunk of their windfall."
Note that the article refers to a tax cut as "money given" to higher income families. A tax cut is not giving money to anyone, but letting them keep more of what they earn. This way of referring to tax cuts as the same as benefits uncovers a dangerous mentality on the part of the political class. The premise is that all money belongs to the government and when the government confiscates less of the money you earn it is giving you a "break."
It is this premise that is the cause of our spending problems. Too many politicians see the government as entitled to all of our income as a means of supporting their political schemes. Cutting our taxes is seen as giving us a "break." They are also entitled to pass judgment on the relative fairness of such breaks.
There are many arguments for tax cuts on the grounds of economic efficiency. In my opinion, we need more arguments for tax cuts on the simple moral grounds that it is OUR money and not the government's! Tax Slavery may be the right phrase after all to describe our current system.
© Robert Maynard
December 8, 2010
Quite a few years ago a group called The International Society for Individual Liberty published a series of pamphlets on various subjects related to the overall issue of liberty. One of these pamphlets was entitled "WE MUST END TAX SLAVERY NOW." The pamphlet deals with our tax system and it goes into some detail over just how much of a tax burden the average taxpayer is settled with. Since this pamphlet was written, that burden has gotten worse. As bad as the tax burden is, I have always seen it as a symptom of a problem and not the main problem in itself. The main problem was pin pointed by former U.S. Ambassador to the UN, Dr Alan Keyes in a Presidential run. Dr. Keys asked the question of just how much of our money was the government claiming ownership of if they thought that they had the right to raise the tax rate as high as they chose? His answer was that they are claiming 100% ownership in principle and allowing us to keep a certain percentage at their discretion, as they saw it as their right to set the tax rate. He then went on to point out that, by definition, when someone lays claim to 100% of the fruits of our labor they have made slaves out of us. Using this argument he pushed to replace the income tax with a consumption tax. That would put more discretion over how much we should pay the government in the hands of the taxpayer.
Such arguments led both the ancient Greeks and our Founding Fathers to oppose direct forms of taxation as akin to slavery. Thomas Jefferson put it this way: "...a wise and frugal government, which shall restrain men from injuring one another, which shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government." Instead they favored indirect taxes on transactions such as excise taxes and tariffs. User fees were another method of generating the needed revenue to support the limited functions of government. Excessive taxation was considered a thing to be avoided. Besides the level of taxation, the reporting of one's income to the state was seen as an intrusive assault on our privacy. This attitude toward taxation carried over into the 19th Century.
In a 1976 article for the Freeman entitled "The Power to Tax is the Power to Destroy," Dr. Clarence Carson quotes from an opinion put forward by Chief Justice John Marshall in the 1819 case McCulloch v. Maryland. "That the power to tax involves the power to destroy; that the power to destroy may defeat and render useless the power to create ...." Of course the question in this case was an attempt by the State of Maryland to tax a federal bank. Chief Justice Marshal was applying the stated general principle of taxation to the relationship between political entities. Dr. Carson simply broadened the application to include the relationship between a political entity and private citizens.
What brought all this to mind was an Associated Press story cited by Rush Limbaugh on his radio program the other day. The writer of the story was arguing for an extension of unemployment benefits and against keeping the Bush tax cuts in place for the upper income brackets so that they do not see a massive tax increase. Numerous free market economists have argued for extending these cuts on the grounds that it would be the best way to stimulate the economy. The AP article was trying to make the point that extending jobless benefits would be a greater stimulus to the economy. After making the case for why extending these benefits would provide the needed stimulus, a case is made for why an extension of the tax cuts to upper income brackets would not. Here is a quote from the article where the comparison of paying out benefits is made to extending the tax cuts: "By contrast, money given to higher-income families — say, through tax cuts — tends to deliver less economic benefit because those taxpayers typically save a big chunk of their windfall."
Note that the article refers to a tax cut as "money given" to higher income families. A tax cut is not giving money to anyone, but letting them keep more of what they earn. This way of referring to tax cuts as the same as benefits uncovers a dangerous mentality on the part of the political class. The premise is that all money belongs to the government and when the government confiscates less of the money you earn it is giving you a "break."
It is this premise that is the cause of our spending problems. Too many politicians see the government as entitled to all of our income as a means of supporting their political schemes. Cutting our taxes is seen as giving us a "break." They are also entitled to pass judgment on the relative fairness of such breaks.
There are many arguments for tax cuts on the grounds of economic efficiency. In my opinion, we need more arguments for tax cuts on the simple moral grounds that it is OUR money and not the government's! Tax Slavery may be the right phrase after all to describe our current system.
© Robert Maynard
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