Tax Day


As many Americans make final entries in their tax forms and make them ready to send off to the government, I thought it was worth talking about. 

The Federal income tax as we know it wasn’t part of the original Constitution.  The sixteenth Amendment gave government the power to collect taxes on a person’s income.  The founding fathers thought this was a bad idea and promoted the ability of government to spend money they didn’t have.  The idea of being taxed on personal income, they believed, discouraged people from trying to earn more money, invent things or improve the human condition.  There were, however, other attempts to collect taxes on income. 

The first income tax was levied in 1861 on incomes above $800 per year and was repealed when the war was over.  Another tax was imposed on income by the Revenue Act of 1862.  This was the first progressive tax in history.  It taxed people who made $600 per year (around $14000 in today’s dollars) at 3%, and people over $10,000 at 5%.  The tax was designed to help pay for the Civil war, and taxes were “witheld at the source.”  It was supposed to end in 1866, but the source I used did not state whether it did or not. 

Other revenue taxes on inco me were introduced around the turn of the century to offset costs of tarriffs.  In 1894, Democrats in Congress enacted the Wilson-Forman tariff, which was the first peacetime income tax.  It was a 2% tax on income over $4000.  However, in 1895, the Supreme Court held in Pollock V. Farmer’s Trust Co. that tax based on receipte from the use of property to be unconstitutional.  It did find that taxes on real and personal property were okay.  Due to the difficulties with taxing income without taxing property, a federal income tax was found to be impractical until…

The Sixteenth Amendment. 

This amendment reads:  “The congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment amont the several states, and without regard to any census or enumeration.” 

This removed the impracticality of Wilson-Forman, and removed the approtionment requirement.  This requirement meant, at the time, that taxes collected had to be divided among the states based on population.  It took the government a long time to figure out a way around that pesky constitution, yes? 

Income taxes were modest in the beginning.  A 7% tax on incomes over $500,000.  (That’s ten million bucks in today’s dollars) During WWI, this rate was 77% on incomes over $1 million ($16 million today).  After the war, the rate was scaled back to 24% and the income threshold was $100,000. ($1 million today). 

In 1939, the top income tax rate was 75% and applied to incomes over $5 million. ($75 million today).  In 1944 and 1945, the top tax rate was 94% on income over $200,000. 

I want you to look at something here.  in 1939, the US economy was still in the throwes of the Great Depression, yet FDR still had a top tax rate of 75%.  Nothing to discourage making money like that, huh? 

Woodrow Wilson was president in 1913.  A Republican, but a progressive.  The tax rates were progressive, too, meaning that higher earners paid a higher percentage of their income in taxes.  FDR continued this line of thinking during a time when 25% of Americans were out of work.   That’s how it’s been ever since. 

Witholding has not always been a part of paying taxes, either.  And these taxes were levied before Social Security, Medicare, Medicaid, and the two hundred hungry federal beareaucracies that need feeding from the tax revenue.  Can you imagine paying over 90% of your hard earned income in taxes? 

Of course, the progressives then were no different than progressives today.  That money you have can’t possibly be the result of getting an education and preparing yourself for life.  It could not be the result of hard work developing a skill that is in demand.  You must have stolen, inherited, or somehow hornswaggled someone to get it.  So we, the government, are taking it back.  Obama and his band of tax cheats are sitting ready to tax us all to pay for his out of control spending.  There’s no way he can keep his promise of not raising taxes on people who make less than $250,000 a year (that’s about one hundred and fifty eight bucks in tomorrow’s money) and still pay for all the stuff he wants. 

Of course, paying for it isn’t nearly as important as getting it passed. 

Right?

Right? 

Wrong.  The tax code in this country rewards laziness and punishes hard work.  Obama really thinks that taking money from someone who earned it and giving it to someone who did not is helping that person.  It’s not.  Ben Franklin said the best source of charity was to make someone figure out how to take care of themselves.  It’s still true today.  If a person knows that there is no “government check” coming, they’ll get off their butt and make their own way.  I personally don’t like subsidizing these people with my work.  I obtained a skill and sell it at a ridiculous discount.  If I can’t make my own way, I find another way.  That’s what the American dream is.  Making your miracle come true. 

Now, I know that people will think I’m hateful and a racist because I don’t think working people should be FORCED to support non working people.  Fine.  I’m hateful and a racist.  But I contend it’s more racist to say that someone can’t make their own way because of the color of their skin, or that they didn’t have a man around, or that they grew up poor.  Some of the greatest men in history grew up poor.  Ever hear of Abraham Lincoln?  Thomas Edison?  Where would we be if men like this sat around and waited for the rest of us to support them?

People, if you don’t like being taxed the way we are, I encourage you to read Neal Boortz and John Linder’s Fair Tax book.  It is the only truly fair taxation system ever devised, and may just save our country.

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