By Cynthia Dunbar
Today we are encountering situations where our own government is being weaponized against us. We have watched as citizens are being denied due process of law and treated as political dissidents, a politically motivated indictment has been issued
against a former President, the FBI is targeting people attending mass as radicals, and the list goes on. While we may often be less concerned with financial tyranny, the reality is this, a government without excessive funds is a government without the means to oppress.
Taxation is one of the easiest ways a government may oppress its people. Think the Romans taxing the Israelites, or the Boston Tea Party. This bondage has played out in numerous scenarios throughout the history of man. Taxation can be oppressive merely by its very nature. However, when those taxes are used to fund an ever-expanding government being weaponized against its own citizens, then the oppression rises to a whole new level.
Alexander Hamilton foresaw that there would be no way to effectively steer clear of the potential for inequitable tax burdens without certain limitations embedded within the government itself. The only way that could be avoided would be if the National Government were allowed to raise its own revenue, and that through very limited means. Exactly how that revenue wasanticipated to be raised was far different than what we encounter today. He explained it clearly in his defense of how tax caps were anticipated to be secured by the Constitution.
“In short, the federal government would only tax through a consumption tax and that on very select items so that the element of discretionary spending was at the heart. Consequently, “[t]he amount to be contributed by each citizen will in a degree be at his own option and can be regulated by an attention to his resources. The rich may be extravagant, the poor can be frugal. And private oppression may always be avoided by a judicious selection of objects proper for such impositions.”
Hamilton proceeded to explain how this type of consumption tax predominantly on luxuries would, by its very nature, prevent taxes from expanding to any excessive amount.
“It is a signal advantage of taxes on articles of consumption, that they contain in their own nature a security against excess. They prescribe their own limit; which cannot be exceeded without defeating the end proposed—that is an extension of the revenue…. If duties are too high they lessen the consumption—the collection is eluded; and the product to the treasury is not so great as when they are confined within proper and moderate bounds. This forms a complete barrier against any material oppression of the citizens, by taxes of this class, and is itself a natural limitation of the power of imposing them.”
He ended his discourse on this form of taxation, a consumption tax on
discretionary goods, by confirming his expectation that this would always remain the foundation for the predominant funding of the federal government. “Impositions of this kind usually fall under the denomination of indirect taxes, and must always constitute the chief part of the revenue raised in this country.” Would that our federal government would revert to such a prescription for limiting taxes today.
This mindset that the power to tax by the national government needed to be actively constrained was coupled with the understanding that the national government was to remain tethered to its strictly enumerated powers. This powerful combination of ideologies kept our government lean and financially solvent. This was not a fleeting thing that only lasted a few short years after our nation’s founding. For several administrations, there was no national debt, and in fact, often there were tax surpluses available. In his second inaugural address, President Jefferson boasted,
“the suppression of unnecessary offices, of useless establishments and expenses, enabled us to discontinue our internal taxes…. The remaining revenue on the consumption of foreign articles, is paid cheerfully by those who can afford to add foreign luxuries to domestic comforts, being collected on our seaboards and frontiers only, and incorporated with the transactions of our mercantile citizens, it may be the pleasure and pride of an American to ask, what farmer, what mechanic, what laborer, ever sees a tax-gatherer of the United States?”
American history prior to Congress enacting the income tax in 1913 demonstrated the reality that the federal government could pay its bills, keep the nation largely out of debt, and respect the privacy of its citizens. Even during wartime, Congress had a method of imposing direct war taxes that respected states’ rights and the privacy of its citizens. These are all proof that an excessively large government with crippling national debt need not be our reality Such a state only exists because those who currently hold office refuse to align with the principles of limited government that were so dear to our founders.
Progressivism prompted Congress at the end of the 19 th Century to enact a tax on incomes over $4,000 at two percent, that would be the equivalent of those who earn over $320,000 today. Congressman Cockran, ironically a Democrat from NY, warned that,
“The imposition of such a tax is but a gentle, playful exercise of a dangerous power. It is merely showing demagogues the path of demagogy…The men who offer this amendment as a sop to the discontented will be swept away by the rising tide of socialism. They will discover, when too late, that in overturning the barriers which separate liberty from anarchy they have liberated ten thousand furies who will sweep over them in a mad procession of anarchy and disorder.”
But his arguments were not heeded, and Congress passed the law anyway. The Supreme Court deemed this law unconstitutional in the 1895 case of Pollock v. Farmers Loan and Trust Company. The court held that a tax on rent or income from real estate is a direct tax, reasoning that “the whole beneficial interest in the land consisted in the right to take the rents and profits.” Congress reacted to this clear limitation on its taxing power by pushing through the 16th Amendment, with the record of its ratification being dubious.
Prior to this tax and spend mentality of the 20th Century, Congress had largely limited its legislating to the constitutionally enumerated powers of the federal government. The multiplication of unconstitutional federal offices, along with the ability of the federal government to now manipulate the decisions of the American consumer, resulted from the imposition of the income tax. This massive increase of federal bureaucracies has created a vicious cycle of taxation to fund an ever-growing national budget and deficit. Ironically, despite the imposition of the income tax and more federal revenue, Congress has more often engaged in deficit spending and racked up massive debt since the enactment of the 16th Amendment. This is due to the drastic mindset shift of elected officials and, unfortunately, even the American people as to the role, scope, and function of the federal government.
If we are to make any meaningful progress towards payment of our debilitating national debt, we must begin to elect persons who are knowledgeable of and committed to the proper role of the federal government. This means that we must begin by massively shrinking our federal budget and extricate ourselves from the tax and spend mentality. Only by pulling our government within the clear confines of constitutionally enumerated powers and refusing to expend appropriated dollars on bureaucratic agencies that should not exist, and limit taxation back to what was intended to be its source, a consumption tax, can we ever hope to regain our true Independence. In short, let’s elect legislators and presidents willing to phase out the IRS and return us to a national sales tax.