Showing posts with label Plunder. Show all posts
Showing posts with label Plunder. Show all posts
Sunday, February 16, 2014
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
Thursday, January 12, 2012
So, When Exactly is "Lawful Plunder" Appropriate?
In some of my earlier op-eds, I have argued that a just society "redistributes income" only in amounts sufficient to help people who are incapable of providing for their most basic needs.
But I have also argued that "income redistribution" when misused can quickly degenerate into "plunder."
(Note: I am not unmindful of the danger of all income in the nation gravitating into the hands of just a few. I plan to address this issue in the near future. But I am limited in space.)
I have argued that there is nothing "fair" about people who pay no federal income taxes, while insisting that tax rates be increased only on their "rich neighbors" who already pay most of the taxes, so that the "rich" will pay their "fair share."
Today I would argue that there is nothing "fair" about two large corporations, Sears and the Chicago Mercantile Exchange, getting tax breaks amounting to $330 million per year, not available to all other Illinois corporations.
Gov. Pat Quinn justifies them saying, "You have to defend yourself. If Ohio is offering $400 million to Sears (to relocate) ... we will defend ourselves."
Translated, that means, that since Ohio is about to plunder Illinois, Illinois will allow Sears and the CME to plunder Illinois -- it will allow Sears and CME to escape the recent increase in the state income tax to 9.5 percent, while leaving the tax in place for all other corporations not threatening -- as yet -- to relocate.
If 9.5 percent is too high for the big boys to pay, and was a lousy idea in their cases, why don't the governor and legislators admit the increase in the state income tax was a lousy idea, and repeal it?
If there is something unseemly about the poor plundering the rich, there is something more unseemly about the rich plundering the poor.
In 1850, a French economist, Frederick Bastiat, wrote a pamphlet titled, "The Law."
In this age, when Congress gives a $500 million to Solyndra, and bails out Wall Street and GM with taxpayer dollars, does Bastiat look like a prophet?
"If every person has the right to defend -- even by force -- his person, his liberty, and his property, then it follows that a group of men have the right to organize and support a common force to protect these rights constantly.
"The law is the organization of the natural right of lawful defense. It is the substitution of a common force for individual forces. And this common force is to do only what the individual forces have a natural and lawful right to do: to protect persons, liberties, and properties; to maintain the right of each, and to cause justice to reign over us all.
"But there is ... another tendency that is common among people. When they can, they wish to live and prosper at the expense of others... Man may live and satisfy his wants by seizing and consuming the products of the labor of others.... Now since man is naturally inclined to avoid pain -- and since labor is pain in itself -- it follows that men will resort to plunder whenever plunder is easier than work.
"Men naturally rebel against the injustice of which they are victims. Thus, when plunder is organized by law for the profit of those who make the law, all the plundered classes try somehow to enter -- by peaceful or revolutionary means --into the making of laws. Either they may wish to stop lawful plunder, or they may wish to share in it.
"As soon as the plundered classes gain political power, they establish a system of reprisals against other classes. They do not abolish legal plunder .... They emulate their ... predecessors by participating in this legal plunder, even though it is against their own interests.
"In order to make plunder appear just and sacred to many consciences, it is only necessary for the law to decree and sanction it. Under these circumstances, then certainly every class will aspire to grasp the law, and logically so. The excluded classes will furiously demand their right to vote — and will overthrow society rather than not to obtain it.... They will say to you: since everyone else uses the law for his own profit, we also would like to use the law for our own profit.
"As long as it is admitted that the law may be diverted from its true purpose -- that it may violate property instead of protecting it -- then everyone will want to participate in making the law, either to protect himself against plunder or to use it for plunder.
"Sometimes the law defends plunder and participates in it. Thus the beneficiaries are spared the shame, danger, and scruple which their acts would otherwise involve. Sometimes the law places the whole apparatus of judges, police, prisons, and gendarmes at the service of the plunderers, and treats the victim -- when he defends himself -- as a criminal.
"But how is this legal plunder to be identified? Quite simply. See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime.
"Now, legal plunder can be committed in an infinite number of ways. Thus we have an infinite number of plans for organizing it: tariffs, protection, benefits, subsidies, encouragements, progressive taxation, public schools, guaranteed jobs, guaranteed profits, minimum wages, a right to relief, a right to the tools of labor, free credit, and so on, and so on. All these plans as a whole -- with their common aim of legal plunder -- constitute socialism."
Posted Online: Jan. 04, 2012, 2:09 pm - Quad-Cities Online
by John Donald O'Shea
Copyright 2012, John Donald O'Shea
But I have also argued that "income redistribution" when misused can quickly degenerate into "plunder."
(Note: I am not unmindful of the danger of all income in the nation gravitating into the hands of just a few. I plan to address this issue in the near future. But I am limited in space.)
I have argued that there is nothing "fair" about people who pay no federal income taxes, while insisting that tax rates be increased only on their "rich neighbors" who already pay most of the taxes, so that the "rich" will pay their "fair share."
Today I would argue that there is nothing "fair" about two large corporations, Sears and the Chicago Mercantile Exchange, getting tax breaks amounting to $330 million per year, not available to all other Illinois corporations.
Gov. Pat Quinn justifies them saying, "You have to defend yourself. If Ohio is offering $400 million to Sears (to relocate) ... we will defend ourselves."
Translated, that means, that since Ohio is about to plunder Illinois, Illinois will allow Sears and the CME to plunder Illinois -- it will allow Sears and CME to escape the recent increase in the state income tax to 9.5 percent, while leaving the tax in place for all other corporations not threatening -- as yet -- to relocate.
If 9.5 percent is too high for the big boys to pay, and was a lousy idea in their cases, why don't the governor and legislators admit the increase in the state income tax was a lousy idea, and repeal it?
If there is something unseemly about the poor plundering the rich, there is something more unseemly about the rich plundering the poor.
In 1850, a French economist, Frederick Bastiat, wrote a pamphlet titled, "The Law."
In this age, when Congress gives a $500 million to Solyndra, and bails out Wall Street and GM with taxpayer dollars, does Bastiat look like a prophet?
"If every person has the right to defend -- even by force -- his person, his liberty, and his property, then it follows that a group of men have the right to organize and support a common force to protect these rights constantly.
"The law is the organization of the natural right of lawful defense. It is the substitution of a common force for individual forces. And this common force is to do only what the individual forces have a natural and lawful right to do: to protect persons, liberties, and properties; to maintain the right of each, and to cause justice to reign over us all.
"But there is ... another tendency that is common among people. When they can, they wish to live and prosper at the expense of others... Man may live and satisfy his wants by seizing and consuming the products of the labor of others.... Now since man is naturally inclined to avoid pain -- and since labor is pain in itself -- it follows that men will resort to plunder whenever plunder is easier than work.
"Men naturally rebel against the injustice of which they are victims. Thus, when plunder is organized by law for the profit of those who make the law, all the plundered classes try somehow to enter -- by peaceful or revolutionary means --into the making of laws. Either they may wish to stop lawful plunder, or they may wish to share in it.
"As soon as the plundered classes gain political power, they establish a system of reprisals against other classes. They do not abolish legal plunder .... They emulate their ... predecessors by participating in this legal plunder, even though it is against their own interests.
"In order to make plunder appear just and sacred to many consciences, it is only necessary for the law to decree and sanction it. Under these circumstances, then certainly every class will aspire to grasp the law, and logically so. The excluded classes will furiously demand their right to vote — and will overthrow society rather than not to obtain it.... They will say to you: since everyone else uses the law for his own profit, we also would like to use the law for our own profit.
"As long as it is admitted that the law may be diverted from its true purpose -- that it may violate property instead of protecting it -- then everyone will want to participate in making the law, either to protect himself against plunder or to use it for plunder.
"Sometimes the law defends plunder and participates in it. Thus the beneficiaries are spared the shame, danger, and scruple which their acts would otherwise involve. Sometimes the law places the whole apparatus of judges, police, prisons, and gendarmes at the service of the plunderers, and treats the victim -- when he defends himself -- as a criminal.
"But how is this legal plunder to be identified? Quite simply. See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime.
"Now, legal plunder can be committed in an infinite number of ways. Thus we have an infinite number of plans for organizing it: tariffs, protection, benefits, subsidies, encouragements, progressive taxation, public schools, guaranteed jobs, guaranteed profits, minimum wages, a right to relief, a right to the tools of labor, free credit, and so on, and so on. All these plans as a whole -- with their common aim of legal plunder -- constitute socialism."
Posted Online: Jan. 04, 2012, 2:09 pm - Quad-Cities Online
by John Donald O'Shea
Copyright 2012, John Donald O'Shea
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