Imagine for a moment America without an income tax. No more tedious record keeping of all our expenses. No more April 15th deadlines. No more insufferable complexity and exasperating forms. It would no longer be government’s business how much money we earn and what we do with it. Such a reform would dramatically change the lives of every one of us for the better.
Could such a spectacular reform actually be brought about? Yes, it certainly can. As proposed in AFR’s New Equal Rights Amendment, the first step to ending the income tax is to end “progressive tax rates,” replacing them with an “equal-rate” system, and back it by amending the Constitution. For example:
The reason why an amendment that mandates “equal tax rates” is so important is because with its ratification, 1) government will no longer be able to redistribute wealth, which is the primary source of its relentless growth, 2) government will not be able to restore progressive rates because they would be clearly prohibited by the Constitution, and 3) a steady reduction of government spending will result allowing us to eventually switch from an income tax to a national sales tax and abolish the IRS.
What follows is an analysis of the above three points and how we as patriots can bring about this crucial revolution in the next few years with AFR’s “coalition to amend the Constitution” that emulates the same methods our Founders used in the 1780s.
Challenging the Establishment Tyranny
Naturally the liberal establishment stands firmly against equal-rate taxation. Their goal is to collectivize America along the lines of Fabian socialism. Liberals imagine themselves as being politically idealistic and just in their espousal of “progressive tax rates.” But this not true.
All great thinkers of our past understood that a progressive tax code, i.e., arbitrary rates, is dictatorial, not idealistic and just. They supported uniform rates because tax uniformity is the only way to uphold “equal rights” and avoid the evolution of class war, factions, and the tyranny of centralized government.
Thomas Jefferson astutely summed up the essence of the tax issue when he wrote, “The true foundation of republican government is the equal right of every citizen, in his person and property, and in their management.” [1]
Alexander Hamilton firmly denounced the use of arbitrary (i.e., unequal) rates: “Whatever liberty we may boast of in theory, it cannot exist in fact while [arbitrary] assessments continue.” [2]
Philosopher David Hume declared, “The most pernicious of all taxes are the arbitrary. They are commonly converted, by their management, into punishments on industry…It is surprising, therefore, to see them have place among any civilized people.” [3]
In the early 19th century, renowned Scottish economist John Ramsey McCulloch wrote, “The moment you abandon the cardinal principle of extracting from all individuals the same proportion of their income or of their property, you are at sea without a rudder or compass, and there is no amount of injustice or folly you may not commit.” [4]
Later in the 19th century, Supreme Court Justice Stephen J. Field wrote, “If the Court sanctions the power of discriminating taxation and nullifies the uniformity mandate of the Constitution…it will mark the hour when the sure decadence of our government will commence.” [5]
Is this not what is happening today – the “sure decadence of our government” has commenced? Have not our politicians become blind to the sacred principles of a once free and just America? There are numerous sources for this madness, but the first and foremost is government’s power to redistribute wealth via confiscatory taxation.
The Naivety of IRS “Reform”
A very important point to understand in this fight is the futility of “IRS reform.” The nature of the IRS and its role dictate that it will always be intrusive, tyrannical, and ruthless.
Consider this law of life: The nature of an entity and the nature of its role in existence dictate its personality and its methodology. Therefore, one does not sit children down with cobras as if they were Teddy Bears to be hugged. Savage Mafia lords cannot be transformed into kindly boy scouts. And the IRS is not going to be made into a group of smiling federal receiving clerks to help us solve life’s difficulties.
Trying to rein in the IRS with tax reform is like trying to rein in a snorting rhinoceros with kite string. The IRS operates above the law, and in an intimidatory manner, because that is the only way it can perform its job of collecting enough money to pour down Gargantua’s gullet in Washington.
The answer to this tyrannical mess is to forget about “reforming” the IRS. Eliminate this Orwellian agency! But to do so, we must eliminate the income tax itself. And, as we will soon see, the only way to eliminate the income tax is to first eliminate “progressive tax rates,” which will then induce the voters to reduce government spending to a low enough level so that the income tax can be replaced with a national sales tax.
Unfortunately a national sales tax is not salable to the public at this time because it requires a 15%-23% rate at today’s government spending levels. So spending needs to be dramatically reduced first. The American people would readily vote for a 7%-8% national sales tax, but will continue to balk at a 15%-23% national sales tax. It’s just psychologically too much to overcome.
Understanding “Infinite Demand”
The dictatorial powers that are developing in Washington today have come about because 50% of the citizenry possess “infinite demand” for government services. We briefly touched upon this in our New Equal Rights Amendment launch. The following will expand upon this crucial concept. Understanding “infinite demand” is the key to grasping why government is overwhelming our country today. Infinite demand is the kerosene hose that fuels the fire of government growth.
As we see in the chart below from Congress’ Joint Committee on Taxation, 49% of the nation’s income earners pay 100% of federal income taxes, while 51% of income earners pay zero taxes because of exemptions and special breaks. [6]
Very important to understand. The zero payers are drawn not just from the low-income sector of society, but also from high income earners. Many wealthy individuals and middle class earners are able to hire expensive accountants to use complex tax loopholes in our present system to reduce their taxes to zero every year.
Thus, a progressive income tax with arbitrary exemptions spawns a “something for nothing” voter mindset that dominates all elections. When large groups of voters are allowed to pay nothing in taxes, an irresponsible electorate will inevitably evolve to demand a steady expansion of government services. This is basic human nature and one of the cardinal laws of economics. If government benefits are free, demand for them will be infinite. Consequently, in every election there is approximately a 50% base of voters who always favor those politicians who propose increased government spending. When we add in liberal zealots, the base approaches 65% of the voters.
Overcoming this “infinite demand” for government spending will be impossible until we genuinely reform the tax system and eliminate its “something for nothing” aspect. This means ending all special breaks, loopholes, and rate progressivity. This will necessitate the adoption of a simple equal rate income tax that does not convey arbitrary favors to anybody and ends all exemptions except for a standard deduction (say $6,000) that is the same for every individual and their dependents no matter what they earn.
If the tax rate is 15%, this means that the millionaire would have to write a check for $149,100 ($1,000,000 income minus $6,000 = $994,000 X .15 = $149,100). He would not be able to use expensive accountants and loopholes to reduce his bill to zero.
Likewise the man who earns $10,000 would have to write a check for $600 ($10,000 income minus $6,000 = $4,000 X .15 = $600). He would not be able to use egalitarian sophistry and progressive tax rates to reduce his bill to zero.
This would lower the present zero-taxpayer group from 50% of voters to about 20%, which would give us a responsible electorate instead of today’s mass of greedy collectivists who care nothing about the monstrosity they are passing on to their children. Since 80% of voters would then have to pay for all government subsidies and pork barrel programs proportionately out of their own pockets, they would lose their overwhelming desire for such subsidies and programs. They would begin to favor politicians who advocate “reduction” of government instead of its “constant expansion” because this is the only way they could get their own taxes reduced and more freedom into their lives. All kinds of Ron Pauls would begin to appear in congressional elections every two years because the voters would demand it.
Four Steps to Ending the Income Tax and the IRS
Radical tax reform is the great unifying cause that can break the stranglehold collectivism has over our country’s politics. Americans are ready to scrap the income tax. Yet this monumental reform will not happen unless conservatives, libertarians and independents unify behind the only viable path to that goal. This path is constructed of four steps:
- We must permanently end progressive tax rates by passing AFR’s proposed 28th Amendment to the Constitution.
- This will bring about a gradual reduction of government spending over the years to a level that can eventually be funded with 7%-8% rates and lower.
- We can then substitute a national sales tax for the income tax.
- We can then disband the IRS because the state sales tax agencies can collect all payments and forward the money to Washington.
Coalition to Amend the Constitution
How do we become strong enough to bring all this about? We use the same means that brought America into being. The patriots of the 1780s spread their message by regularly meeting in the churches and taverns of their towns to galvanize their fellows toward ratifying the proposed Constitution. We can do the same thing today by means of “Meetup Groups.” Go to http://www.meetup.com/about/ and begin one in your home town. Meetup.com will help you start the process.
Read our AFR Meetup Guide. It will explain how to build your group into a powerful force for reform by recruiting fellow patriots in your area and teaching them why an equal rights amendment for taxation is so important in ending the income tax and the IRS. There are over 3,000 counties in America. If we could form an AFR Meetup Group in just half of them, we could get an Equal Rights Amendment offered to the states for ratification in the next 3-4 years. With continued activism and pressure upon our state legislatures, we could get such an amendment ratified in 7-8 years. What a wonderful accomplishment that would be to pass on to our children.
Keep in mind that by working for such an amendment, we also will be putting immense pressure on Congress to simply pass an equal-rate tax into law. So the least that will come out of our efforts is that Congress will end progressive tax rates when they see Americans getting behind this cause. But if the ending of progressive tax rates is to be a permanent part of our political system, it must eventually be enshrined into the Constitution with an amendment.
Is this just a patriot dream? Not at all. The power of freedom is the most powerful force in the world. Equal rights are ours by the laws of Nature and Nature’s God. Government has usurped these fundamental rights. The people are ready to take them back.
We need only to offer them bold, innovative inspiration, rather than dreary politics as usual, and they will come from all corners of the country to join our cause. America needs a New Equal Rights Amendment to the Constitution for taxation. This is the only way to stop the runaway freight train of government growth. This is the only way to save the America we love.
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1. Letter to S. Kercheval, 1816. Saul K. Padover, ed, Thomas Jefferson On Democracy (New American Library, no date), pp. 34-35. Emphasis added.
2. Harold Syvelt, ed., The Papers of Alexander Hamilton, vol. III (New York, 1962) p. 104. Cited in Charles Adams, “Our Income Taxation: The Darker Side,” Manassas, VA: Citizens for an Alternative Tax System [no date], p. 6.
3. David Hume, The Philosophical Works, vol. 3 (London, 1882) pp. 356-360. Cited in Adams, Ibid, p. 6.
4. J.R. McCulloch, Taxation and the Funding System (London, 1845), pp. 141-143. Cited in Charles Adams, For Good and Evil: The Impact of Taxes On the Course of Civilization (Lanham, MD: Madison Books, 1993), p. 365. Emphasis added.
5. Justice Stephen J. Field, Pollock v. Farmers Loan and Trust Co., 157 U.S. 607 (1894). Cited in Adams, Ibid., p. 370.
6. http://finance.senate.gov/newsroom/ranking/download/?id=9fe27e9f-a5e0-4010-8461-ffc00b5c00ef
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Nelson Hultberg is a freelance writer in Dallas, Texas and the Director of Americans for a Free Republic www.afr.org. A graduate of Beloit College in Wisconsin, his articles have appeared in such publications as The American Conservative, Insight, Liberty, The Freeman, The Social Critic, The Dallas Morning News, and the San Antonio Express-News, as well as on numerous Internet sites.
He is the author of The Golden Mean: Libertarian Politics, Conservative Values
Email: NelsonHultberg (at) afr.org
