Thursday, December 5, 2013

Taxes and More Taxes

The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration. 
Sixteenth Amendment to the United States Constitution

I am no tax expert so much of this is stuff that feels right or wrong.  For a quick history of what I do know about taxes in America. Part of our reason for war with Britain was taxation without representation. During the Articles of Confederation, the central government could not collect taxes. Before the 16th Amendment, the current constitution allowed each state to be taxed. In the years before the 16th Amendment many people advocated an income tax as early as 1812. There was an income tax on anyone making about $800 a year during the Civil War. Then in 1913, the 16th Amendment was ratified.

Here are my issues with this amendment. While taxes are an important and necessary evil of society, imposing them on what a person earns does not seem fair. I understand the argument that the rich can afford to pay more than the poor.  That argument always assumed that the rich are sitting around doing nothing while watching their money grow on the backs of the hard work of the poor. So what is fair for the hardworking rich guy? Yes Virgina, they do exist. On that same note, what is fair for the sit at home and do nothing poor guy? Yes Virgina, you already knew they exist. I am not saying there aren't plenty of people living off daddy's money. Paris Hilton. I am also not saying there aren't plenty of poor people cutting your grass for near nothing an hour. But let's just admit one thing, an income tax and a progressive income tax such as ours creates this idea that all the rich are lazy and all the poor are busting it all day. We are constantly being told by one side of politics that the rich need to pay a higher percentage in taxes. 

The other thing that I hate about an income tax is that it gives the two major parties a campaign issue every year. D's say the rich need to pay more and the R's claim that the poor don't pay any taxes at all. Both statements are inaccurate.

The final thing that I hate about the income tax is that it does tax many without representation. Follow this just for a second. In the old days, states could choose how they picked Senators. Election by the citizens of a state or selection by the legislators. This created a house of Congress that represented the states. Then in turn the states were taxed by the federal government. This was taxation with representation. Individuals were not taxed directly by the federal government. So if a person could not vote for federal government representatives, it did not matter. The federal government was not taxing them directly. In our current system, the states have no representation. Another argument for another time. The individual citizen is taxed directly by the federal government if they earn income. There are plenty of people that are taxed directly by the federal government that do not get to choose those who represent them in the federal government. Two examples that pop into my head are those under 18 years old and non-citizens. This seems to violate one of our founding principles. 

I have no idea what is the best solution for our tax problems. Many favor a flat tax on income. Some favor a national sales tax. While others favor going back to pre-16th Amendment days.

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