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.

We are of the school of thought that holds taxation to be theft, though we concede that citizens must pay for the few essential functions of government, chiefly defense, law and order, the enforcing of the law of contract, the separation of infectious diseases (and locally for common facilities, of course). Adam Smith included instruction in basic literacy for the children of the poor, but we don’t see a need now, in America, for even the most elementary education to be paid for out of the common purse. (We acknowledge that this opinion is probably unpopular.)

The socialist state takes most of your earnings away from you, and when you die confiscates most of your capital worth so you cannot leave much to your children.

As the provider of the necessities of your life, the socialist state has the power to deprive you of them. Your life is in its hands, and you have no voice in its decisions, which is why socialism is called the road to serfdom.

Obama has set America on that road, and the descent is gathering pace.

This is from the Heritage Foundation’s Morning Bell today:

This year is actually the first year since 1916 that Americans do not have to pay any federal taxes when a family member dies. But thanks to the way Congress had to pass the legislation that phased out the Death Tax in 2001, it is set to go from zero percent to 55 percent at the stroke of midnight on December 31, 2010. The Death Tax is but one of many government taxes on capital and entrepreneurship, and its reinstatement will be yet another job killer from the Obama administration. It rewards estate tax lawyers, insurance companies and big businesses at the expense of small family-owned enterprises. According to a study by the American Family Business Foundation, a full repeal of the death tax, like the one [introduced by Republican Senator Jim DeMint, and] rejected by the Senate last night, would create 1.5 million jobs. Before the vote, Sen. DeMint described the tax as an “unfair, immoral double tax on property and assets that folks have already paid taxes on throughout their lives.” …

Last night’s vote to raise the Death Tax is just the beginning of the Obama administration’s historic tax hike campaign. Unless Congress acts to oppose President Obama’s agenda, everyone’s taxes on personal income, capital gains and dividends will rise….

For two generations after post-war reconstruction, Europe and America have pursued different economic models, and accordingly, moved in different economic directions. The American model was low tax, low spending and small government. It favored growth, income and vibrancy. The European model is high tax, high spending and big government. It favored fairness, equality and stability. It also featured unemployment rates double those of the United States, often hovering around 10 percent. Now that is no longer the case. Under Obama’s economic leadership, U.S. unemployment rates are surpassing Europe’s.

Last night’s vote was just the beginning of a larger choice the American people must make: do they want to continue down the Obama path of high taxes, high spending and high unemployment? Or do they still believe in American exceptionalism, in limited government and in a vibrant U.S. economy? Last night’s vote was a step in the wrong direction.