In America, is the Income Tax Becoming an Instrument of Plunder?

What is worse? Taxation without representation? Or representation without taxation?

I suggest they are two sides of the same coin. Both are equally bad.
Prior to the American Revolution, citizens of England's colonies in America were adamant against the British Parliament imposing taxes upon them.

They didn't care what tax Parliament sought to impose. The British "constitution" guaranteed that no free man could be taxed without his consent. That consent was given by the member of the House of Commons representing the citizen's district. But American colonists had no representatives in Parliament. As such, they objected to Parliament taxing them.

They opposed the Sugar Act of 1764, the Stamp Act of 1765, and the tax on tea of 1773. The amount of the tax was not the issue. It was the principle. They objected to the power of the English Parliament to impose any tax at all.

This is not to say that the colonists opposed all taxation. They recognized the right of their elected representatives in the colonial assemblies to tax them. But they denied the right of Parliament -- across the ocean -- where they had no representatives to tax them.

In May 1764, Samuel Adams of Boston set forth what came to be the position of the colonies:

"For if our Trade may be taxed, why not our Lands? Why not the Produce of our Lands & every thing we possess or make use of?

"This we apprehend annihilates our Charter Right to govern & tax ourselves -- It strikes our British Privileges, which as we have never forfeited them, we hold in common with our Fellow Subjects who are Natives of Britain: If Taxes are laid upon us in any shape without our having a legal Representation where they are laid, are we not reduced from the Character of free Subjects to the miserable State of tributary Slaves?"

The American federal income tax is a graduated tax. Persons with higher incomes pay at greater rates than persons with little or no income. But in America, every citizen gets one vote.

Samuel Adams and our founding fathers realized there was something wrong with people who aren't going to pay the tax voting to impose a tax on other people who will be required to pay the tax. In Adams' time, the danger came from across the sea. Englishmen, who weren't going to pay the tax, were voting to impose a tax that Americans would have to pay.

For the colonists, it was "taxation without representation. For the English, who weren't going to pay the tax, and who had representation in Parliament, it was "representation without taxation." To Americans who would be paying the tax, it was two sides of the same coin.

Once the principle was established, there were no limits. A one-penny tax imposed by Englishmen on Americans in 1765 could be increased to a one-pound tax a year later, and so on.

Two hundred and fifty years later, middle class Americans face a similar threat. According to the Tax Policy Center and Forbes Magazine, 43 percent of American households will pay no federal income tax in 2013. (They point out that this is down from 47 percent in 2009.)

But Americans who pay no taxes have power to elect representatives pledged to raise the income tax on all who do. The difference, of course, is that the Americans who will be taxed, do have representation in Congress. But in the very near future those who do pay income taxes may not have sufficient" representation in Congress to prevent the majority -- the non-paying majority -- from working its will.

Samuel Adams was not a Chicken Little when he worried that small taxes would morph into big taxes over time. The 16th Amendment, which allows for the graduated income tax, became law in 1913. The 1913 income tax created seven tax brackets. Rates ranged from 1 percent to 7 percent.
When a poor man pays 1 percent of his income, it hurts. And if he votes for congressmen pledged to raise taxes, that should include his own taxes. When the federal income tax imposed on middle class Americans is raised, that hurts, too.

The principle should be, if I am willing to raise my neighbor's taxes, I should be willing to raise my own. If I am willing to hurt the guy next door, I should be willing to hurt myself.

But when 43 percent pay no tax, and can vote to elect representatives to raise taxes of their neighbors who pay income taxes, is not Adams query true?

"Are we not reduced from the Character of free Subjects to the miserable State of tributary Slaves?"

Those who see nothing wrong with 43 percent paying no income tax, will respond that those who pay no income tax may still be paying FICA and state, real estate and sales taxes. But the people who are paying federal income taxes are also paying those taxes. And if the "poor" vote to raise FICA or state taxes, they are also sharing the burden. That is fair.

But it simply is not fair to increase the income tax on your neighbor -- generally the biggest tax of them all -- while at the same time not paying that tax yourself. This is converting the graduated income tax into an instrument of plunder.


Posted Online:  Feb. 16, 2014, 12:00 am - Quad-Cities Online
by John Donald O'Shea

Copyright 2014
John Donald O'Shea