Skip to comments.The Anniversary of the Income Tax – the Worst Day in American History?
Posted on 10/04/2013 8:08:07 AM PDT by Kaslin
There have been some unfortunate and dark days in American history, but what was the worst day?
Some obvious choices include December 7, when the Japanese bombed Pearl Harbor, and September 11, when the terrorists launched their despicable attack.
Another option (somewhat tongue in cheek) might be January 20 since Republican partisans would say thats the day that both Jimmy Carter and Barack Obama became President while Democratic partisans would say thats the day Ronald Reagan became President.
But allow me to suggest that Yesterday, October 3, should be a candidate for Americas worst day.
Why? Because on this day in 1913, one of Americas worst Presidents, Woodrow Wilson, signed into law the Revenue Act of 1913, which imposed the income tax.
The law signed that day by President Wilson, to be fair, wasnt that awful. 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 (the basic tariff rate dropped form 40 percent to 25 percent).
But just as tiny acorns become large oak trees, small taxes become big taxes and simple tax codes become complex monstrosities. And thats exactly what happened in the United States.
We now have a top tax rate of 39.6 percent, and its 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 ofpolitical corruption in Washington, impoverishing us while enriching the politicians, lobbyists, bureaucrats, and interest groups. Or the oppressive anddishonest 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.
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, and they couldnt raise those tax rates too high because of Laffer Curve effects (something that modern-day politicians sometimes still discover).
Once the income tax was adopted, though, it became a lot easier to finance subsidies, handouts, and redistribution. As you can see from the chart, the federal government used to be very small during peacetime.
But as the decades have passed, the Leviathan state in Washington has grown. And in the absence of genuine entitlement reform, its 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.
Thats why October 3 is an awful day in American history. All the bad results described above were made possible by the income tax.
P.S. Its totally off topic, but I dont think we should commemorate September 11. Id much rather we celebrate May 1, which is the day that Osama bin Laden became fish food.
P.P.S. If the income tax facilitated todays bloated government, it should go without saying that giving politicians another big source of revenue would lead to an even bigger burden of government. Thats why the value-added tax is such an awful idea.
P.P.P.S. Government also used to be very small in Western Europe before the income tax. Indeed, it was during that period when European nations became rich.
P.P.P.P.S. One could also argue that February 3 is the worst day in historybecause thats when Delaware ratified the 16th Amendment, thus making an income tax constitutional.
The 16th Amendment was never properly ratified. Several states changed the wording and passed a different amendment, yet all that was ignored by the Wilson administration in order to force socialism on us.
Whatever you subsidize you get more of. Whatever you tax you get less of.
Why then do we subsidize poverty and tax prosperity?...........
I take strong exception to the first P.S., celebrating Obama’s glorious victory over Osama.
(Or was that Osama’s glorious victory over Obama? I get them confused.)
Let’s leave it to the Commies to celebrate May Day.
Note: Russia has a single flat rate system.
Split it between the 16th and 17th amendment like President’s day.
The SECOND worst is automatic payroll deductions. The LIV crowd that brought us to this mess is unable to tell you what percentage of your salary is going to Santa Obama - oh that’s right they don’t work. When are conservatives going to start “Going Galt”?
Then there's the worthless EPA. Remember, it didn't always exist. Then The Education Department.
The FairTax was created by first asking the American people what they wanted out of a tax system, and then having a team of respected economists design a tax system that met those demands. The FairTax replaces the income tax and all other federal taxes with a national consumption tax. The FairTax is levied only once, at the point of purchase on new goods and services. The simplicity of the FairTax frees Americans from our current overwhelming tax code and unshackles the U.S. economy.
* Abolishes the IRS
* Closes all tax loopholes and brings fairness to taxation
* Maintains current Soc. Sec. and Medicare benefits
* Brings transparency and accountability to tax policy
* Allows American products to compete fairly
* Reimburses the tax on purchases of basic necessities
* Enables retirees to keep their entire pension
* Enables workers to keep their entire paycheck
Seems to me that the democrats are throwing out a lot of hints that they want to ditch the house of representatives. The house most closely represents the will of the people.
Senators for the most part don’t even waste time pretending to represent their states most of the time anymore. They just want total top down DC based governance.
Gotta love Republican, big government protectionists. They've been exporting jobs from American for over 100 years.
Such profound insight and accurate.
I believe almost all of our problems would melt away if we simply mandated at all adults pay the same tax amount, not same tax rate, but amount. No one in private industry checks your W-2 then adjusts the cost of a good or service. The intrinsic value of that good or service is determined by the free-market. It should also be so with the services of govt (equal protection).
If everyone paid the same amount, the “takers” would do unto themselves what they would do to us. If you don’t pay, you can’t vote. Govt would quickly shrink to its appropriate and sustainable size.
They just want total top down DC based governance.
You are correct, but the problem is that Americans are armed...to the teeth, based upon recent sales figures for arms and ammo.
Agreed. It was that action that made the Federal Government realize that they are completely unaccountable and can get away with anything.
The ruling class is smart, though. They are just waiting until the tipping point where the public demands citizens be disarmed, then the camps will open for business. No need to force the populace into chains when they’ll gladly put them on voluntarily a few years down the road.
“The Anniversary of the Income Tax the Worst Day in American History?”
How about the day dumb Americans elected a socialist/commie, to the POtUS? This country has been a tailspin ever since, and who knows if we’ll ever recover.
Their only significant pre-1913 sources of revenue were tariffs and excise taxes
By implication, the author purposely left out direct taxes as a significant source.
Income taxes were and are politically palatable because the Wilsonian Progressives intended to make them . . . progressive, and of little threat to popularly elected politicians. Once senators were elected, the door was wide open.
I think the moment for the great marxist revolution has passed and all the screeching we hear is simply the dead enders refusing to accept it. There is no way in hell the democrats can eliminate the house without stirring white hot rage from both left and right.
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