For most of the first 125 years or so of our nation’s existence, there was no federal income tax. In fact, back when the federal government restricted itself to its legitimate consitutional functions, the government’s revenue was derived almost entirely from tariffs on imports. With the ratification of the 16th amendment in 1913 came the advent of the federal income tax. Only the very wealthiest Americans were originally subject to the tax. For those subject to it, the income tax rate began at 1% and rose to 7%, for persons earning more than $500,000 per year (equivalent to over $10.3 million per year in current dollars). Far less than 1% of Americans paid any income tax at all.
But now, as we all know, the federal government drains an enormous portion of the wages of Americans through an complex mind-numbing set of regulations known as the Tax Code. With the enactment of “tax withholding”, a supposedly emergency measure introduced during WW II to improve government cash flow, American employers became obligated to collect taxes from the wages of workers as they earn them. These days Americans are required to submit detailed accountings to their government every year, detailing their incomes and various expenses, and settling up for any shortfall between what the government demands, and what already been extracted from their paychecks. Many end up receiving a pittance of a “refund”, which they have come to see as some sort of windfall.
Government taxation of incomes is outrageous. The practice should be abolished. No free people should have to submit themselves to such a thing.
I have previously established that there is absolutely no reason for the federal government to collect any taxes at all, given that it doesn’t restrict its spending to what it collects, and has demonstrated the willingness and ability to borrow or print our so-called “money” in any amount it desires. But even if our government should repent of its recklessness and irresponsibility, the federal income tax is unnecessary and should be abolished.
And I do not mean that it should be replaced. No, I mean it should be abolished, and replaced with nothing. The so-called “fair tax” for example, is anything but fair. It is a massive sales tax, requiring that 20-30% of the price of every item purchased in America be remitted to the federal government. Aside from the obvious outrageousness of such a tax, in short order it would be operating alongside an income tax. We’d end up with both. The “fair tax,” which is, at best, the “less unfair tax,” is not the answer.
The answer is to abolish the income tax, replace it with nothing, and require the federal government to get by on what’s left. But many will protest, how could the government function without the tax revenue? How would we manage to run the country?
Very easily actually.
Approximately 45% of federal revenue comes from the individual income tax.
If the income tax were abolished entirely, and replaced with nothing, the federal government would still receive $1.26 trillion in revenue. So, in other words, if the federal government can manage to get by on $1.26 trillion, it will need no individual income tax revenue at all.
In 1990 federal government spending was $1.25 trillion. Thus, exclusive of the individual income tax, federal tax revenue in 2009 is more than the total of all federal spending in 1990. Therefore, if the federal government can get by on what it was spending in 1990, then no federal income tax would be necessary at all. Certainly the federal goverment wasn’t too small in 1990.
But wait, some will say. 1990 was a long time ago, and we’ve come up with lots of new and expensive uses for tax dollars since then. OK, how about 2000? During the last year of the Clinton administration, did it seem that the federal government just wasn’t spending enough money? Total federal spending in 2000, much of it wildly wasteful, was $1.79 trillion. Therefore, if we reduced federal spending to the level of just nine years ago (i.e before the wasteful insanity of the Bush/Obama administrations) we could cut income taxes by 50%, across the board.
Of course, if the government restricted itself to its legitimate constitutional functions, it couldn’t possibly spend $1.25 trillion. But certainly the beast will be plenty well fed on such an amount. And it’s way past time it went on a diet anyway.