100 Years Of The Income Tax

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John Hayward @ Human Events:

Sunday, February 3, is the 100th anniversary of the ratification of the Sixteenth Amendment, which makes it the one hundredth birthday of the income tax.  It has grown rather ill-tempered in its dotage.

Americans for Tax Reform commemorated the occasion by publishing a few fun facts about the income tax.  Among other interesting statistics, the initial top tax bracket was only 7 percent, and it didn’t kick in until income reached a whopping $11.6 million in 2013 dollars.  Only 358,000 people had to fill out 1040 forms at first, because the standard family deduction was an adjusted $93,000.

Over the past hundred years, the tax code has swelled from 400 pages to almost 74,000.  The top rate is 39.6 percent; add in state and local taxes, and you’ve got the government soaking up over half of every marginal dollar earned by the Evil Rich.  And the top bracket crashes down on those who earn over $450k, which is the new functional definition of a “millionaire.”  Every new tax – from the income tax itself, to the Alternative Minimum Tax and its prospective stepchild, the “Buffett Rule” – is sold as a small levy on the vast wealth of millionaires.  The AMT was only supposed to affect a couple of hundred people when it was implemented in 1969, but now it’s on the verge of grabbing 50 million taxpayers, if it’s not “fixed.”  In the early years of the income tax, Americans were likewise assured that it would only slip a few dollars from the bulging wallets of the wealthy.

Allowing the government to sink its feeding tubes into the veins of American income has fueled astonishing government growth.  That first itty bitty tax levy brought in a paltry $16.6 billion in revenue, adjusted for the past century of inflation.  Today the income tax brings in $2.7 trillion.  Government inevitably grows to fill, and exceed, the space made available for it.

Perhaps the biggest problem with this tax is the way it is collected.  As we were all reminded during the row over presidential candidate Mitt Romney’s remarks about the “47 percent,” the “progressive” tax system has moved an increasingly large cohort of Americans out of the system entirely, while placing an ever-greater share of the burden upon a dwindling group of high wage earners.  Remarkably, this group is perpetually accused of “greed” and refusing to pay its “fair share,” even though the relationship between its tax burden and the amount of income it earns has long since exceeded any reasonable definition of “fairness.”  Even before the new Obama tax increases kicked in, the Heritage Foundation noted that the top 10 percent of income earners were carrying 71 percent of the federal income tax burden, even though they earned only 43 percent of all income.  The bottom 50 percent, meanwhile, earned 13 percent of all income but paid only 2 percent of the income tax.

And that still isn’t fair, according to the Left.  It never will be.

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Curt served in the Marine Corps for four years and has been a law enforcement officer in Los Angeles for the last 24 years.

3 Responses to “100 Years Of The Income Tax”

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    The progressive income tax is nothing more than “legalized” theft of people’s property, in practice. In theory, it is a great idea. The problem is that when you put something like that in practice, it invariably ends up being a fight to see who can benefit the most. The current left in this country has correctly deduced that by “giving away” freebies, much of it in the form of tax credits, breaks, etc., that they can gain net votes, which they have. At that point, when the revenue has become far less than the expenditures, the cry for “fairness” becomes a rallying point for those not wanting their “freebies” to go away, so they attempt to shuffle the bill onto the backs of those making higher incomes.

    And the politicians are all too happy to lead on that front, as it means continued power, and thus, continued feeding at the trough. For them.

    If we wish to talk truly about “fairness” in taxation, we must not stop only at the front end, or, the % of taxes paid per individual income. We must also discuss the total tax revenue garnered by the federal government, and who pays the most. This is the aspect that too many people are looking past, mainly because it doesn’t fit their argument about “fairness”.
    -Hence, it can be argued that the poor, or those living just above/below the poverty line, pay an “unfair” amount to the government in taxation, compared to someone who makes million$ per year and has million$ left over in disposable cash after taxes. No argument here, but only because of the amount of taxation taken at all from private individuals(ANY private individuals).
    -But, by the same token, it is completely “unfair” that the upper percentages of wage earners, as a group, pay the lion’s share of taxes that the government rakes in, while around 50% of wage earners end up paying nothing, and the lower groups actually receive a net gain on taxes.

    So, what, exactly, is “fair” when talking about taxation? This is actually quite difficult to discuss with people because everyone’s first instinct is to protect their own benefits, and to hell with everyone elses’. Thus, we see the lower wage earners scrambling to vote for those politicians who want to keep the status quo going, or even hand out more, and those lower wage earners forget completely about what economic freedom actually means.

    The best tax system I have seen thus far is the FairTax system, but then, I imagine that even that system can be broken when the politicians figure out how to increase “give-aways” in exchange for votes, and their continued power and place at the public feeding trough.

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    As I have said many many times, the “progressive” income tax is a concept clearly designed to bring the collapse of a capitalist society. That is precisely what Marx wrote is was designed to do, to crush the middle class with such economic pain that the mobs would rabidly work to accept the “fair” communist economic system.

    Income tax is inherently evil, built to prey upon the weak minded into accepting class warfare as a legitimate method of pushing for economic “equality”. In fact, “progressive” income taxes are the ultimate fruition of ignoring the 10th Commandment against coveting your neighbor’s goods.

    Sales taxes are the most fair way of doing things, because if you have enough money to buy extra things, you will be paying a larger amount of taxes. It also makes EVERY citizen think about government expenditures EVERY time something is purchased. Income taxes should be prohibited by overturning the 16th Amendment, followed by an amendment banning any future income taxes.

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