Another View On Taxes

The piece Doing Good with Other Peoples' Money (June 29) elicited a couple of replies including the following from my brother Bill. See the Feedback section for another. Bill writes:

It appears that the discussion of taxes misses a most important point that, once recognized, may lead anyone who is interested to a different perspective on the subject. There are taxes and then there are income taxes.

According to the Constitution of the United States: "Section 8. The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States." But the founding fathers who crafted the Constitution had no idea that the above section would lead to an income tax. And it wasn't until the 16th amendment that income tax was instituted, almost 140 years later.

The XVI amendment states that: "The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration." It was ratified in 1913, the same year that the Federal Reserve was established. Prior to this time, there was no Federal Income Tax. There's a connection here but that's probably best left for another post.

It's also interesting to note that under the Federal Reserve, the dollar has lost approximately 98% of it purchasing power since 1913. This is the hidden tax known more commonly as inflation, the true rape of the American people and that fact isn't open to interpretation. Consider the following from economist John Maynard Keynes:

"By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose... If, however, a government refrains from regulations and allows matters to take their course, essential commodities soon attain a level of price out of the reach of all but the rich, the worthlessness of the money becomes apparent, and the fraud upon the public can be concealed no longer."

So when talking about taxes, it really doesn't matter if you are a Republican or Democrat. Both parties are analogous to vehicles on a superhighway..the Republicans are in the right lane, knowing that they will eventually get to the destination..absolute socialism. The Democrats are in more of a hurry and are in the left passing lane determined to reach their destination as soon as possible. The income tax is the way they will accomplish their goal because it enables the politician to reach into your pocket, take your wealth, and redistribute it to those they want to be beholden to them, and Hillary (the Socialist's Socialist) has no problem telling you so.

If you were to look at a demographic map of the US showing the density of the population that voted in the 2000 election you would see that it shows a concentration of Gore voters around urban areas while the George Bush constituency was more rural. Why is that? Because many of the people living in urban areas live there precisely to take advantage of the largesse Alexander Tyler speaks of in the following quote:

"A democracy cannot exist as a permanent form of government. It can only exist until the voters discover they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising them the most benefits from the public treasury, with the result that a democracy always collapses from poor fiscal responsibility, which is always followed by a dictatorship. The average of the world's great civilizations before they decline has been 200 years. These nations have progressed in this sequence: From bondage to spiritual faith; from spiritual faith to great courage; from courage to liberty; from liberty to abundance; from abundance to selfishness; from selfishness to complacency; from complacency to apathy; from apathy to dependency; from dependency back again to bondage."

The loop-hole in the Constitution that makes this possible is the phrase "The Congress shall have power to .. provide for the general welfare of the United States" in Section 8 of the Constitution. Surely the founding fathers never expected it would be exploited as it is today.

When this country was founded, it was established as a republic, and as such, the individual was considered a sovereign entity, hence the Bill of Rights. The individual states also shared that status but over the years, the Federal Government has gradually morphed the U.S. into a democracy which is what Mr. Tyler laments in his quote above. A democracy pays no consideration to sovereignty of the individual or the state and as a democracy, the Federal Government has usurped the freedom and legitimacy of both the individual and the state. A democracy is about majority rule. A democracy is two wolves and a sheep voting on what they're going to have for dinner.

For more on this topic, see here.