Saturday, April 18, 2009

Taxing my soul

Our Constitution is a restrictive document. It defines the boundaries in which our government may act. If it is not specified, our government (President, House and Senate, and Supreme Court) may not take it upon themselves to act with regularity and impunity outside that boundary. James Madison declared:
"The powers delegated by the proposed Constitution to the are federal government are few and defined. Those which are to remain in the State governments are numerous and indefinite. The (federal government) will be exercised principally on external objects, as war, peace, negotiation, and foreign commerce; with which last the power of taxation will, for the most part, be connected. The powers reserved to the several States will extend to all the objects which, in the ordinary course of affairs, concern the lives, liberties, and properties of the people, and the internal order, improvement, and prosperity of the State."
Wow, have we gooned up the original intent! Plainly, the Founders (and authors) intended the US Constitution to restrict the federal government

Income tax, one of the forms of taxation protested during the recent Tea Parties, is not enumerated in the Constitution. It is sanctioned in the 16th Amendment ratified in 1913 making it some 130 years older than the Constitution in violation of the direct taxation of the people (Article I section 9). To sustain the ever-growing size of the federal government, William Howard Taft and his ever-growing size proposed congress' ability to tax the citizen's income. And so we have lived with the beast near 100 years.

Here's the rub: if we are going to tax income, how are we going to tax it? This question exposes the mess that is income tax. Three possibilities exist and are known by other names in other sectors. They are:
  1. Equal Income Tax. Here every man pays the same amount.
  2. Equal Percentage. Here every man pays the same percentage of his income.
  3. Proportional (what we live under now). The more you make, the greater percentage of your income is taxed.
I've started a poll at the top right of the blog. Before I continue and argue what a mess income tax is, I ask that you choose which is the best income tax (if we have to live with one...hence no "none of the above" in the poll) for our nation. Feel free to argue your point in the "Comments" to this post. You are more than welcome to do so "Anonymous"-ly.

Let the fun begin.
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ADDED: Mark Steyn has a great look at Tea Parties and income tax in his weekly article here. It might help guide your decision.

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