The anniversary of an awful day in American history 4

Yesterday was the anniversary of the start of a very bad thing.

The income tax.

Our creed is: Taxation is theft and income tax is the worst of all taxes.

So we read the following with sad sympathy.

It is from a column at Townhall by  Daniel J. Mitchell of the Cato Institute:

On October 3, 1913, one of America’s worst Presidents, Woodrow Wilson, signed into law the Revenue Act of 1913, which imposed the income tax.

The top tax rate was only 7 percent, the tax form was only 2 pages, and the entire tax code was only 400 pages. And a big chunk of the revenue actually was used to lower the tax burden on international trade …

But just as tiny acorns become large oak trees, small taxes become big taxes and simple tax codes become complex monstrosities. And that’s exactly what happened in the United States.

We now have a top tax rate of 39.6 percent, and it’s actually much higher than that when you include the impact of other taxes, as well as the pervasive double taxation of saving and investment. And the relatively simply tax law of 1913 has metastasized into 74,000 pages of Byzantine complexity.

Not to mention that the tax code has become one of the main sources of political corruption in Washington, impoverishing us while enriching the politicians, lobbyists, bureaucrats, and interest groups. Or the oppressive and dishonest IRS.

However, even though I take second place to nobody in my disdain for the income tax, the worst thing about that law is not the tax rates, the double taxation, or the complexity. The worst thing is that the income tax enabled the modern welfare state.

Yes, yes. We heartily agree. Income tax allows redistribution – the robbing of Peter by government to hand out his money to Paul.

The income tax launched socialism on the Western world. A terrible and ultimately fatal disease of the body politic.

Before the income tax, politicians had no way to finance big government. Their only significant pre-1913 sources of revenue were tariffs and excise taxes …

Once the income tax was adopted, though, it became a lot easier to finance subsidies, handouts, and redistribution. … As the decades have passed, the Leviathan state in Washington has grown. And in the absence of genuine entitlement reform, it’s just a matter of time before the United States morphs into a bankrupt European-style welfare state.

And as government becomes bigger and bigger, diverting more and more resources from the productive sector of the economy, we can expect more stagnation and misery.

That’s why October 3 is an awful day in American history.

Posted under Commentary, Economics, government, History, Socialism, United States by Jillian Becker on Friday, October 4, 2013

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This post has 4 comments.

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  • Jim Twotoes

    I once heard a commentator describe something called “the ratchet effect”, a term he attributed to Margaret Thatcher. The ratchet effect occurs when a left wing government involves itself in social engineering, say wealth distribution through higher taxes, and succeeding right wing governments, fearing a voter backlash, refuse to unwind the policies. This has a cumulative effect over time which results in an ever expanding welfare state, hence the term “ratchet effect”. There was a good example of this down here in New Zealand not so long ago. The left wing Labour government facing defeat after two terms in office surprised everyone by promising increased tax refunds for working families whose incomes fell below certain specified thresholds. In addition, they also promised to remove interest charges on student loans. Naturally they won the election. Thankfully, we now have a centre-right government but, despite that government’s clear disapproval of the prior government’s policies, they refuse to unwind them. Meanwhile, as a result, the burden of tax falls ever more heavily on that portion of the population who are required to subsidise other people’s lives, families and educations.

  • liz

    Government is a parasite which is now becoming bigger than its host – us.
    We have met the enemy, and he is NOT us – he is the government.

  • Frank

    At first I thought this was funny…then I realized the awful truth of it.

    Tax Poem

    Tax his land,
    Tax his bed
    Tax his cow,
    Tax h is goat,
    Tax his pants,
    Tax his coat.

    Tax his ties,
    Tax his shirt,
    Tax his work,
    Tax his dirt.

    Tax his tobacco,
    Tax his drink,
    Tax him if he
    Tries to think.

    Tax his cigars,
    Tax his beers,
    If he cries
    Tax his tears.

    Tax his car,
    Tax his gas,
    Find other ways
    To tax his ***.

    Tax all he has
    Then let him know
    That you won’t be done
    Till he has no dough.

    When he screams and hollers,
    Then tax him some more,
    Tax him till
    He’s good and sore.

    Then tax his coffin,
    Tax his grave,
    Tax the sod in
    Which he’s laid.

    Put these words upon his tomb,
    ‘ Taxes drove me to my doom…’
    When he’s gone,
    Do not relax,
    Its time to apply
    The inheritance tax.

    Accounts Receivable Tax
    Building Permit Tax
    CDL license Tax
    Cigarette Tax
    Corporate Income Tax
    Dog License Tax
    Excise Taxes
    Federal Income Tax
    Federal Unemployment Tax (FUTA)
    Fishing License Tax
    Food License Tax
    Fuel Permit Tax
    Gasoline Tax (42 cents per gallon)
    Gross Receipts Tax
    Hunting License Tax
    Inheritance Tax
    Inventory Tax
    IRS Interest Charges IRS Penalties (tax on top of tax)
    Liquor Tax
    Luxury Taxes
    Marriage License Tax
    Medicare Tax
    Personal Property Tax
    Property Tax
    Real Estate Tax
    Service Charge Tax
    Social Security Tax
    Road Usage Tax
    Sales Tax
    Recreational Vehicle Tax
    School Tax
    State Income Tax
    State Unemployment Tax (SUTA)
    Telephone Federal Excise Tax
    Telephone Federal Universal Service Fee Tax
    Telephone Federal, State and Loc al Surcharge Taxes
    Telephone Minimum Usage Surcharge Tax
    Telephone Recurring and Non-recurring Charges Tax
    Telephone State and Local Tax
    Telephone Usage Charge Tax
    Utility Taxes
    Vehicle License Registration Tax
    Vehicle Sales Tax
    Watercraft Registration Tax
    Well Permit Tax
    Workers Compensation Tax

    STILL THINK THIS IS FUNNY?

    Not one of these taxes existed 100 years ago, and our nation was the most prosperous in the world.

    We had absolutely no national debt, had the largest middleclass in the world, and Mom stayed home to raise the kids.

    What in the hell happened? Can you spell politicians!’

    • Jillian Becker

      And according to the Supreme Court, we have to buy Obamacare insurance because that’s a tax too.