“Observations”©

Donald S. Conkey

 

Date: April 12, 2007 - # 915b - April 15 – America’s Day of Mourning - TAX DAY.(820)

 

Sunday is April 15 – America’s dreaded tax reporting day, a day of mourning as taxpayers rush to the county post offices to post mark their “returns” by midnight Monday night. Never did the Founding Fathers dream their nation would reject their consumption tax (FairTax) and create a graduated income tax system, a system which likely has the Founders turning in their graves. America’s first revolution, spearheaded by Samuel Adams, began over taxes, a tax on imported tea. What would he do today if he were here to witness the abusive and oppressive tax system instigated by congress since 1913 – all because the democrats tried to embarrass the republicans. Some things never change.

       With taxes on our minds what better time to review the history of America’s income tax laws. There are few today who would remember the days when there were no income taxes, after all they were unconstitutional until 1913. Another Ripley’s “Believe It Or Not” story! But such days did exist, and not many years ago. But unless Congressman John Linder gains more support for his “FairTax” plan those days will not return soon.

       Article 1, Section 8 of the Constitution reads: “Powers Delegated to Congress: Enumerated powers: 1. The Congress shall have power to lay and collect taxes, duties, imposts, and excises (sales taxes), to pay the debts, and provide for the common defense and general welfare of the United States; but all duties, imposts, and excises shall be uniform throughout the United States;....” Clear concise words. No income tax mentioned. 

       Then the sixteenth amendment was ratified on February 12, 1913. It reads: “The Congress shall have power to lay and collect taxes on incomes, from whatever sources derived, without apportionment among the several states, and without regard to any census or enumeration.”  The income tax door was opened, never to close again. Then President Roosevelt asked for, and received support from congress to use “payroll deductions” in 1943 to help pay for World War II, but when Congress found out how easy it was to collect taxes by payroll deduction it soon became their method of choice to collect taxes from wage earners.

       Here is how our present income tax system was created. The Republicans were in power, and Democrats were anxious to regain power. In April 1909, just 98 years ago, Senator Joseph W. Bailey, a conservative southern democrat, strongly opposed to income taxes, decided to embarrass the republicans by forcing them to openly oppose an income tax bill similar to other income tax bills previously introduced, but defeated. He fully expected his tax bill to have strong opposition and to be easily defeated. But instead a growing element of republican liberals supported the bill, giving it the votes necessary to pass both houses. 

       Unable to defeat the bill congressional leaders panicked. They then introduced a “Constitutional Amendment” hoping it would be defeated by the states. But the proposed amendment soon took on a life of its own, picking up strong support with its powerful slogan: “Soak the Rich.” The people rallied behind this slogan and the amendment was ratified by the states in four short years. “Soak the Rich” has been a dangerous and unhealthy political ploy ever since, dividing America’s rich and poor nationwide. This slogan has already been introduced into the 2008 presidential campaign, in a divisive way.

       Passage of this amendment nullified the fourth amendment “against unreasonable searches and seizures.” In part, amendment four reads: “The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated;” This was bad legislation, political intrigue America may never recover from.

       But the super-rich were never soaked – it was the middle-class who were soaked. House Resolution 3321, the first tax bill, was passed on October 3, 1913. Paragraph G was inserted by the rich to protect their wealth through the creation of charitable foundations. It reads: “Provided, however, that nothing in this section shall apply.. .to any corporation or association organized and operated exclusively for religious, charitable, scientific, or educational purposes.” All foundations of the super-rich today qualify under one or more of these categories.

       “Pork Legislation” became fashionable in 1936 when the Supreme Court ruled on the “general welfare” clause in Article 1, Section 8. Since 1936 it is a given that to get re-elected a candidate has to promise to bring “pork” back to one’s district, be it at the national, state or county level. 

       Is our graduated tax system what Jefferson called a “sufferable evil?” Jefferson wrote in the Declaration of Independence “Mankind are more disposed to suffer, while Evils are sufferable, than to right themselves by abolishing the Forms to which they are accustomed.” This seems to fit America today.