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.
—The 16th Amendment
What are we to make of the idea Washington is floating of replacing tax on income with a national sales tax? The libertarian Cato Institute has described it as “simpler, more efficient, pro-growth and fairer to taxpayers.” I must be missing something because I thought we already paid taxes on products and services. In addition to states where a sales tax already exists, sizeable portions of the prices we pay are taxes. The quandary as to whether an indirect consumption tax is better than taxes on income masks what’s probably in the offing.
Once a tax is pushed through it seldom disappears. Last I looked, government at all levels was consuming over 40 percent of the national income and growing. A reversal of the trend is almost unheard of among developed nations. To keep the state in style, consumption taxes will have to go through the roof. On the plus side, the consumer can opt out, something he can’t do with a tax on income. On the downside, should he “choose” not to purchase, the consumer may be destined to a rather austere existence.
In all likelihood, “tax reform” will leave us with the income tax in addition to more consumption taxes. Hopes realistically must be more modest. Let the idea of a tax reform, for once, engender a discussion about First Principles, the kind Americans of the 19th century were capable of having.
However contemptible taxes on consumption are, libertarian writer Frank Chodorov insisted that taxes on income and inheritance were “different in principle from all other taxes.” In the seminal work, The Income Tax: Root of all Evil, he elaborates:
The government says to the citizen: “Your earnings are not exclusively your own; we have a claim on them, and our claim precedes yours; we will allow you to keep some of it, because we recognize your need, not your right; but whatever we grant you for yourself is for us to decide.
Fundamentally, taxes on income imply a complete denial of private property, which is what socialism is in all its permutations; it rejects man’s absolute and natural right to his property and vests property rights in the political establishment. The 16th Amendment does just that. When they incorporated the Amendment into the Constitution, Americans said a resounding “yes” to socialism.
Make no mistake: What’s staving off communism is not the Constitution. If it so chooses, Congress has constitutional imprimatur to raise taxes to 100 percent of income, an odd thing considering the Declaration of Independence vests the source of man’s rights in the Creator, not in government.
Philosopher Ayn Rand, on the other hand, anchored man’s rights in his nature. “Rights are conditions of existence required by man’s nature for his survival,” she wrote in Atlas Shrugged. In order to survive, man must—and it is in his nature to—transform the resources around him by mixing his labor with them and making them his own. Man’s labor and property are extensions of himself. The right of ownership is thus an extension of the right to life. If ownership is not an absolute right but is instead subject to the vagaries of majority vote, then so is the right to life.
Be it in the nature of man or in divine law, man’s rights do not originate in “congressional law”—Congress is merely entrusted with protecting the rights with which man is imbued.
This arrangement, the 16th Amendment corrupted.
Statists will always counter by claiming that if not for the state, man would be unable to produce. Rubbish! That’s like saying that the tick created the dog! Production predates government predation. Government doesn’t produce wealth—it only consumes it. What, pray tell, would government have fed off if people were not hard at work well before the advent of the bureaucracy? As usual, the statists have it topsy-turvy. First came the individual—he is the basic unit of society, without which there can be no society. And without man’s labor there is no wealth for government to siphon.
However you slice it, there is no moral difference between a lone burglar who steals stuff he doesn’t own and an “organized society” that does the same. In a just society, the moral rules that apply to the individual must also apply to the collective. A society founded on natural rights must not finesse theft.
The founders intended for government to safeguard the natural rights of Americans. The 16th Amendment gave government a limitless lien on their property and, by extension, on their lives. The Amendment turned government into the almighty source—rather than the protector—of rights and Americans into indentured slaves.
©By ILANA MERCER
November 20, 2002