Several random but related thoughts on taxes:
1. Higher taxes mean bigger government and less freedom. As taxes go up, an increasing proportion of the decisions concerning the use of dollars is made by the government, not by the individual citizen.
2. Americans should pay their taxes, unless those taxes are unconstitutional. But they shouldn’t like paying them. Rather, they should recognize that taxes are an infringement on individual freedom and, at best, a necessary evil.
3. Here in Alabama, because of budget shortfalls, proration has set in and the budget for the Alabama judiciary has been slashed severely. Some ask, “Isn’t that exactly what you conservatives want?” No! I do not object to paying taxes to support the courts, the military, the police, etc. These are legitimate and necessary functions of government. Rather, I object to paying taxes to support entitlements and enabling the government to do for the people what the people should do for themselves.
4. Very few today can remember the days before 1913, when the Sixteenth Amendment was ratified (some question whether it was legally ratified) and the federal income tax was enacted. Before that, April 15 was just another day on the calendar. But you will be interested in seeing the first IRS Form 1040, issued in 1913 (http://www NULL.archives NULL.gov/historical-docs/todays-doc/index NULL.html?dod-date=415).
Several things to note about this form:
- A person had to file this form only if his income for the year 1913 was over $4,000. That doesn’t seem too significant until we recognize that $4,000 in 1913 was the equivalent of about $80,000 today. The vast majority of Americans did not even have to file.
- Those who earned over $4,000 in 1913 had to file Form 1040, and on everything they earned over $4,000, they had to pay an income tax of — get ready for this — 1%. No, that’s not a misprint — one percent!
- Exceptionally high earners had to pay an additional tax, called a “super tax.” For those whose annual income (not net worth, but income) was over $500,000–the 1913 equivalent of about ten million today) had to pay 6% on everything over $500,000.
But the camel’s nose was under the tent. The Sixteenth Amendment was ratified on the assumption that it would be a very small tax that would not affect the average person. But once the principle that government can tax income was established by the Sixteenth Amendment (the Income Tax Act of 1894 was held to be unconstitutional in Pollock v. Farmers’ Loan & Trust Company, 157 U.S. (http://reports) 429 (http://supreme NULL.justia NULL.com/us/157/429/case NULL.html) (1895), aff’d on reh’g, 158 U.S. (http://reports) 601 (http://supreme NULL.justia NULL.com/us/158/601/case NULL.html) (1895), the door was open to income taxes of 2%, 10%, 30%, or … there is no limit. Threats to liberty normally begin as very minor infringements, supposedly justified by the noblest of reasons.
5. Some celebrate Tax Freedom Day (http://www NULL.taxfoundation NULL.org/taxfreedomday/) around this time of year. This is day on which the individual has earned enough to pay all of his federal, state, and local taxes, and his earnings thereafter are his to keep or do with as he chooses. The exact day differs from year to year, and from state to state (http://www NULL.taxfoundation NULL.org/news/show/387 NULL.html). If Tax Freedom Day in your state is, let’s say, 14 April, that means you’ve worked for the government instead of for yourself and your family for the first three and one-half months of the year.
Wouldn’t it be nice if Tax Freedom Day was sometime in January? But we’ll know we’ve lost our freedom when Tax Freedom Day coincides with New Year’s Eve!
6. Finally, is it simply a coincidence that we pay our income taxes 15 April and don’t vote until November, almost seven months later?
Here’s my suggestion: Change the day we file our taxes to the Monday before Election Day.
That way, our taxes will be fresh on our minds when we go to the polls and vote on whether to re-elect those who imposed the taxes.