Brushfire of FreedomThe Irritable Pundit
As your one and only Irritable Pundit begins the painful process of fighting through a host of forms for his taxes. It is incumbent upon someone with my frighteningly intelligent and all around extraordinary mind to explain what this all means to you, my dear readers. I shall endeavor to give you a sense of history as you fire up "Turbo Tax® Deluxe Edition, now with State fillings too!" But please, try to do a better job of using Turbo Tax® than our current Secretary of the Treasury, will you? Good.
Now then, up until the 1800s, most taxes were on goods consumed or sold. Tobacco, cotton, what have you. Around 1817 there was a switch, and protectionist taxes (i.e. imports) paid the lion's share of revenues.
In the 1860s however, the costs of the civil war brought about the glorious personal income tax, and the establishment of the Commissioner of Internal Revenue in 1862.
And what did the average citizen pay? 3%.
Think about that for a moment. It was to finance a massive, brother against brother, civil war that stretched the entire breadth and width of the United States for years on end. The rate averaged 3%.
I, your esteemed irritable Pundit, am almost speechless. Happily, I said "almost". Lets continue the lesson.
To stop various challenges to the taxes being imposed, in 1913, the 16th Amendment to the Constitution made the income tax a permanent fixture in the U.S. tax system. By giving congress explicit authority in this area a host of new taxes emerged. In 1916, we began taxing people even upon death (estate taxes).
As time passed, Congress continued to tinker, insert and otherwise increase taxes in all forms. Until the personal Income rate rate rose to 50% for upper earners.
Yes, 50%. Note please, the absence of an extraordinarily expensive civil war.
Now let me be clear. Various presidents fought them back down from time to time, but the levers are many, the guardians few. Taxes as a percentage of earnings continued to grow in other areas. The economy floundered. Growth slowed to a crawl. Misery indexes and 20% home mortgage rates, malaise.
There was a turn-around, as Reagan won a decisive victory in the 1980s, and boom times followed. But it was not to last. It is a truism that anytime Government is cut, we prosper. Only to see that prosperity drained away by new Government growth in the next cycle. Sad really. A new generation buys the snake oil that their elders learned to fear.
Once again dear friends, we are in a down cycle. The democrats have a firm grasp on Congress and they are again creating committees to reform taxes and our economy. "Comprehensive reform" they tell us, is essential for progress. And don't we all want "progress"?
Yes, of course we do! Right?
And I'm sure, completely and utterly sure, that the various Congressional Committees working for Comprehensive Progress have our best interests in mind.
After all, haven't we seen great things from the CCCP before?
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