It’s that time of the year when people start making their appointments with H & R Block, or picking up their copies of Turbo Tax – yep, it’s tax time. So, in the spirit of things I thought I’d spend a few minutes discussing taxes.
Did you know that our first government did not have any taxing power at all? What happened was a general treasury was established and funded by somewhat of a property tax upon the value of the land comprising each State. Congress would let the States know how much they owed to fund that treasury, and then the State Legislatures would be the ones to either decide to collect those taxes and submit them to the treasury, or ignore them.
The inability of the federal government to use coercion to ensure that each State paid into the treasury was one of the two primary reasons why it was felt a stronger system of government was needed; with the power to regulate commerce being the other one. I find it somewhat interesting that both issues are of an economic nature; but that’s just my mind examining things as I go along.
Then along comes James Madison and company, and their proposal for a new and improved government; complete with the power to levy taxes and regulate commerce. When the Constitution was presented to the States for their consideration, what they should have done is send it back to those who wrote it, along with a veto message saying, “We did not send you to Philadelphia to create an entirely new system of government; we sent you to Philadelphia to come up with suggestions to improve the existing one. Try again!”
Unfortunately, as is the case with all bad measures that people accept, then later regret, the States did not do that. Motivated by a spirit of fear that something must be done or the Union would be rent asunder by violent convulsions and an inability to manage its internal affairs, the State Legislatures accepted the proposed Constitution and called for ratifying assemblies to be held where it could be discussed by delegates chosen from among the body of the people living within each State.
It’s truly a shame that more people do not share the same interest in this period of American History that I do; for it is packed full of warnings of the dangers this proposed Constitution posed to the sovereignty of the states and to the liberty of the people who inhabit this country. Had the people of America been provided with a thorough and comprehensive education it is possible that they may not have been as likely to support measures that would later lead to the annihilation of their freedom; with an unlimited power to tax being one of those measures.
If it weren’t so pathetic, I’d almost find it laughable that people vote for this candidate or that one for President based upon their campaign promises; with the raising or lowering of tax rates being among those campaign promises. The President has absolutely no authority to raise or lower the tax rates; his job is twofold; he can either accept the tax proposal sent to him by Congress or veto it, and once a tax proposal is signed into law by him, the president is obligated to ensure that the taxes levied by Congress are collected in an effective and efficient manner.
Congress has the power of taxation; it says so right there in the Constitution, “The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States.”
Now when you mention taxes there are many forms they may take; sales tax, excise tax, impost, and tariffs being but a few. But in reality taxes come in one of two form; they are either direct taxes or indirect taxes. A direct tax is one which is levied against possessions and paid by the person owing the tax. An indirect tax is one which is levied against transactions and typically paid by an intermediary. For instance, if a tariff is imposed upon imported goods sold within the United States, the seller of those goods pays the taxes owed to the government, but they pass those taxes on to the consumer in the form of higher prices for those imported goods.
Article 1, Section 2 of the Constitution declares that “Representative and direct Taxes shall be apportioned among the several States which may be included within this Union, according to their respective Numbers…” What that means is that the total number of people living in a State was to be counted, and any direct taxes upon the people would then be divided equally among the inhabitants of each State.
So, no matter if you were wealthy or a pauper, you would pay the same tax under any direct taxation upon you or your property. Oh you say, they can’t tax you, can they? Well yes, they can; it is called a capitation or poll tax and is authorized by the Constitution in Article 1, Section 2 as long as it is apportioned equally.
Now I have heard, primarily among the left leaning in America, that the rich should be taxed at a higher rate than the poor to fund the operation of the government. I find that both ludicrous and ridiculous; and I’ll explain why. Let’s say two people enter a WalMart at the same time. In the wallet or purse of one there is $10 and in the wallet or purse of the other there is $100. Should the person with only $10 be allowed to walk out of WalMart with the same amount of goods as the person who has $100?
Why should government be any different? If a person pays higher taxes, then shouldn’t they be entitled to receive more services and benefits from their government? Anyone who makes the claim that the poor should pay less in taxes than the rich is only seeking to deprive those who have more so that it can then be given to those who have less in the form of services and subsidies. I hate to break your bubble people, but our government was NOT established to play Robin Hood; stealing from the rich so that it can give to the poor.
Today, when people talk about taxes, they are typically talking about income taxes. Yet up until 1913 the income of the people was not taxable…yet our government seemed to get along fine without it. Another thing that happened in that same year was the passage of the Federal Reserve Act, which created a bank our government could borrow from to fund any operations that cost more than they were receiving in the form of revenue generated from other forms of taxation; such as tariffs and duties on imported goods.
Before the Constitution was ratified and the system of government it outlines was adopted, a heated debate ensued over the power of taxation given to this new form of government. In an effort to calm the minds of the opponents of this new Constitution, Alexander Hamilton wrote, “No person acquainted with what happens in other countries will be surprised at this circumstance. In so opulent a nation as that of Britain, where direct taxes from superior wealth must be much more tolerable, and, from the vigor of the government, much more practicable, than in America, far the greatest part of the national revenue is derived from taxes of the indirect kind, from imposts, and from excises. Duties on imported articles form a large branch of this latter description.
In America, it is evident that we must a long time depend for the means of revenue chiefly on such duties. In most parts of it, excises must be confined within a narrow compass. The genius of the people will ill brook the inquisitive and peremptory spirit of excise laws.” (Source: Federalist 12)
If you’ll note, even Hamilton made no mention of a tax upon the income of the people; as had he done so it would have doomed the Constitution to the dust heap of history. So Hamilton kept his focus limited to taxes such as tariffs and excises. Now what is an excise tax you might be wondering? Well an excise tax is a tax levied upon the sale or production of a specific good. For instance, if you purchase a pack of cigarettes you pay an excise tax upon each unit of consumption; each pack of cigarettes. There are excise taxes upon that gas you put into your car, on the beer you drink, and upon your health insurance as per the Affordable Care Act.
I’ll bet you didn’t know that one of the very first things our government did once it was put into operation was to suggest an excise tax upon distilled liquor. As milk was subject to contamination and disease, with water not being much better, and coffee and tea being expensive, alcohol was the logical choice for people to drink; and therefore it provided a reliable source of revenue for the treasury.
I’ll be you also didn’t know that one of the first instances where the people of this country openly opposed the actions of their government came when the federal government attempted to implement an excise tax upon whiskey. The resulting Whiskey Rebellion saw President George Washington violate the Constitution by raising an army and invading the sovereign State of Pennsylvania – not the last time we’d see a President raise an army to keep the flow of money coming into the treasury either. (See all my articles on the real cause of the Civil War for clarification)
Anyway, in 1913 the 16th Amendment was introduced, and is claimed to have been ratified by the requisite number of State Legislatures; although there are those who claim it was fraudulently declared to have been ratified by Secretary of State Philander Knox. Regardless, although it took nearly 50 years to do so, the government finally had a way to tie the American people directly to the debt; making debt slaves out of each and every one of us.
All this began with the Civil War. I know some of you may be weary of me discussing the Civil War, but that is when things went from bad to worse in this country. I’m going to be as blunt as I can about this; the Confederate States left the Union, not to save slavery, but because they were paying the lion’s share of taxes while their tax dollars were being spent on improvements to and benefits for Northern business interests.
In 1861 the Chicago Daily Times published an editorial which summed up the entire reason why the North could not allow the South to leave the Union in peace, “That either the revenue from duties must be collected in the ports of the rebel states, or the port must be closed to importations from abroad is generally admitted. If neither of these things be done, our revenue laws are substantially repealed; the sources which supply our treasury will be dried up; we shall have no money to carry on the government; the nation will become bankrupt before the next crop of corn is ripe.”
In short, if the North allowed the South to leave the Union in peace, the federal treasury would dry up and the government would go bankrupt. Abraham Lincoln could not allow that, not if he hoped to keep those who elected him happy. So Lincoln went to war with the South, saying that they did not have the authority to, and in fact, had not left the Union – they were only in rebellion against the federal authority. That is a key point, so keep it in the back of your minds.
Unfortunately the South lost the resulting conflict. Now if they had never left the Union, as was claimed by many in the North, why were they not allowed to immediately resume their positions in Congress? You see, somewhere along the line of those 4 bloody years of conflict, Abraham Lincoln must have began to wonder how historians would view his invasion of the South if its only justification was to bind the South to the Union for the collection of taxes. So he shifted his policy to the eventual emancipation of all the slaves.
In his book A History of the American People, Woodrow Wilson writes, “It was necessary to put the South at a moral disadvantage by transforming the contest from a war waged against states fighting for their independence into a war waged against states fighting for the maintenance and extension of slavery…and the world, it might be hoped, would see it as a moral war, not a political; and the sympathy of nations would begin to run for the North, not for the South.” It is ironic that it was also Woodrow Wilson who was president when the 16th Amendment was supposedly ratified.
Anyway, before the Southern States were allowed to resume their seats in Congress they were forced to accept the 14th Amendment under the pretense of granting rights to the newly freed slaves. Yet the 14th Amendment was the cornerstone of universal debt slavery in the United States.
I’ll bet most of you did not know that there are 4 sections to the 14th Amendment, and that Section 4 states, “The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.” If you were paying attention you would have seen that it says public debt; meaning they create it, but we are responsible for paying it off – and what better way to enslave people to a debt than by tying their income to the paying off of that debt?
Now America has what is known as a graduated tax system; meaning the more you make the more you pay in taxes. As a public service I looked up the tax brackets and am providing it for your perusal.
Tax rate Single Head of household
10% Up to $9,525 Up to $13,600
12% $9,526 to $38,700 $13,601 to $51,800
22% $38,701 to $82,500 $51,801 to $82,500
24% $82,501 to $157,500 $82,501 to $157,500
32% $157,501 to $200,000 $157,501 to $200,000
35% $200,001 to $500,000 $200,001 to $500,000
37% $500,001 or more $500,001 or more
I’m not going to say exactly how much I make, but I fall into the 22% bracket, meaning nearly 1/4 of my income is stolen from me in the form of taxes to fund a government I no longer support. If that is not theft, I don’t know what is.
Oh, by the way, that debt currently stands at $21.969 trillion. Our national debt is so big that if our government were to stop borrowing right now our great, great, great, great grandchildren would still be paying it off in their lifetimes. And if that doesn’t sound like slavery, then I don’t know what else I can say to you…
I could go on and on about all the other taxes you pay; inheritance taxes, capital gains taxes, property taxes, but that would make this far too long. However, I would like to leave you with one final thought, something Lysander Spooner once said, “If any man’s money can be taken by a so-called government, without his own personal consent, all his other rights are taken with it; for with his money the government can, and will, hire soldiers to stand over him, compel him to submit to its arbitrary will, and kill him if he resists.”
So do your patriotic duties, go visit your H & R Block representative, or buy your copy of Turbo Tax, and make sure you meet the IRS deadline; after all, tyrants are depending upon you to fund their tyranny.