“The Congress shall have the power to lay and collect taxes, duties, imposts and excises, to pay the debts an dprovide for the common defense and general welfare of the USA. But all duties, imposts and excises shall be uniform throughout the land. And no capitation, or direct tax shall be laid unless in proportion to the census”
What the founding Fathers were trying to say in their chapter of the Constitution on Congress, is: It's best to leave decisions regarding how much to tax citizens to the branch of government made up of citizen elected Representatives. Which is not surprising, from the fellows who shouted “No taxation without representation!”
But they also envisioned a nation of equal citizens. So they require that direct taxes be doled out on a “per person” basis. That way, every citizen pays an equal share for the debt and general defense of their own country. Equal in benefits, equal in costs. Truly a nation of equals.
Congress waited barely 100 years before taking its first stab at equality. In 1894, The Wilson-Gorman Tariff Act, sponsored by two Democratic Representatives in the Democratic 53rd Congress, reduced tariffs and imposed the first peacetime national income tax to make up the lost revenue. Democratic President Grover Cleveland was apathetic about the legislation – he allowed it to pass into law without his signature. A year later, the US Supreme Court ruled the income tax portion of the law was unconstitutional.
In 1909, the 61st Congress tried again. This time, Republican President William Taft urged his Republican-controlled House and Senate to pass an amendment to the Constitution giving power to National Government (themselves) to levy income taxes, without equal distribution among citizens.
To quiet their squeals of glee, Taft reminded them that passage of the amendment would not produce funds for the current Congress, merely change the Constitution so future Congresses may levy income taxes without it being judged unconstitutional.
The 61st Congress wasted no time agreeing to propose:
“The Congress shall have the power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the States, and without regard to any census.”
as the 16th Amendment to the Constitution. The matter was sent to the States. After four tumultuous years, the required 36 states ratified the proposal and the amendment was adopted on February 3, 1913.
By 1913, Democrats had regained power in the White House and both chambers of Congress. The 63rd Congress wrote and passed our country's first progressive tax law, the Revenue Act of 1913.
| The Revenue Act of 1913 Tax Table, with figures adjusted for 2009 dollars in italic | |||
| Exemptions: $3000 for single ($64,000), $4000 for married couples ($85,300) | |||
| Taxable Income | Normal Rate | Additional Rate | Total Rate |
| Up to $19,999 ($426,599) | 1 | 0 | 1 |
| $20,000 – 49,999 ($426,600 – 1,066,399) | 1 | 1 | 2 |
| $50,000 – 74,999 ($1,066,400 – 1,599,599) | 1 | 2 | 3 |
| $75,000 – 99,999 ($1,599,600 – 2,132,799) | 1 | 3 | 4 |
| $100,000 – 249,000 ($2,132,800 – 5,331,899) | 1 | 4 | 5 |
| $250,000 – 499,999 ($5,331,900 – 10,663,799) | 1 | 5 | 6 |
| $500,000 and above ($10,663,800) | 1 | 6 | 7 |
And, for comparison:
| 2009 Tax Table for Single Taxpayers, with figures adjusted for 1913 dollars in italic | |||
| Exemptions: $5450 standard deduction, $3500 personal exemption. Total of $8950 ($420) | |||
| Taxable Income | Normal Rate | Additional Amount |
|
| Up to $8349 ($391) | 10 | $0 |
|
| $8350 – 33,949 ($392 - 1591) | 15 | $835 ($39) |
|
| $33,950 – 82,249 ($1592 - 3855) | 25 | $4675 ($233) |
|
| $82,250 – 171,549 ($3856 - 8042) | 28 | $16750 ($785) |
|
| $171,550 – 372,949 ($8043 – 17,484) | 33 | $41,754 ($1957) |
|
| $372,950 and above ($17,485) | 35 | $108,216 ($5073) |
|
Since Americans allowed it to do so, Congress has tinkered and fiddled with the Tax Code until American taxpayers are taxed at levels the 20th Century Socialists wouldn't dare to dream of.
The 16th Amendment is a continuing assault on equality in America. It removes citizens from the “equal benefits, equal costs” vision of the Founding Fathers.
The tax code which resulted from the 16th Amendment punishes employment and financial success. It prefers taxing money earned (productivity) over money spent (consumption). While tariffs and excises were dramatically reduced after the creation of a federal income tax, they did not disappear. As a result, today we are taxed both on money earned AND money spent.
There is a way to correct this egregious injustice. The Fair Tax Act of 2009 (HR 25) was introduced by Republican John Linder of Georgia to the 111th House of Representatives on January 6, 2009. It aims to repeal the 16th Amendment, abolish the IRS and its $11 billion annual budget, and promote freedom, fairness and economic opportunity in America.
The Fair Tax Act seeks a return to taxation on spending, rather than earning. It would repeal all payroll taxes currently withheld from American paychecks and replace them with a national sales tax. It is a tax on all goods and services consumed in the United States, once and only once. There is no double or multiple taxation with Fair Tax.
In addition to closing all the tax loopholes created by Congress over the years, the Fair Tax eliminates the tax gap. The IRS itself admits it does not collect all the tax it is owed - $300 billion goes uncollected every year.
A national sales tax, collected at the cash register at the time of purchase, requires no inefficient administrative agency. The technology is already in place and working!
HR 25 and it's Senate companion, S296, are both stuck in committees. In the House, it's the Ways and Means Committee, chaired by the ethically-challenged Democrat Charles Rangel of New York. S296 is in the Senate Finance Committee, chaired by Democrat Max Baucus from Montana. Mr. Baucus is undoubtedly more interested in passing his own “Middle Income Relief” bill – which aims to make permanent (no raising OR lowering!) the 10, 25, and 28 tax rates.
A bill providing real efficiency, change and freedom isn't worthy of attention from these two Democrats.
Congratulations to the citizens of Georgia for electing Representative John Linder and Senator Saxby Chambliss, men who obviously cherish American freedom.
We in Minnesota have only one current Representative in the 111th Congress in support of the Fair Tax, John Kline, from the 2nd District.
Minnesotans, New Yorkers and folks from Montana would do well to follow Georgia's lead. Contact your elected representative and tell them to support equality in America with the Fair Tax Act of 2009.
The Congress Shall Have the Power. Know what you vote for.
