A Brief Survey of American Taxation

Americans today pay taxes on virtually everything. The list of taxes seems endless. There is the property tax, corporate income tax, income tax, estate tax, sales tax, capital gains tax, "sin" tax, import tax, hotel tax, tax for social security, Medicare tax, state tax, and tax on the sale of used cars. There are endless administrative fees that are equivalent to taxes, like fees for auto tags, auto inspections, and fees mandated by the Federal Communications Commission. Some places even charge taxes on newspapers even though that violates the First Amendment Freedom of the Press.

Today's situation should be compared to the original revolution, which began in part over a tax dispute with Great Britain. "For imposing Taxes on us without our Consent" is one of the complaints listed in the Declaration of Independence. Most know that taxation without representation was one of the causes of the revolution. Surely it cannot be seriously argued that the Founders would have accepted current levels of taxation. Lincoln, a great student of the Declaration and the Constitution, certainly would not have accepted such taxation.

Tax revolts by voters are common because of excessive taxation. It happens in the United States and in other countries as well. When the consumption tax was passed in Japan some twenty years ago, the public was outraged. Protests were staged throughout that country.

The various stimulus plans currently proposed are really supposed to work, but the long-term decline in business, industrial and economic activity over the last 50 years suggests that further decline is likely. How is economic stimulation supposed to be achieved? Compared to the private wealth in America in 1945, there is not much left of the tax base. Back then, people like Henry Ford and Dale Carnegie held enormous wealth. These days, people do not have as much money. Who does the government intend to tax? Bill Gates at one time had $50 billion, but most of that was capital investment in the stocks of his own company. He gave half of that to charity.

It would be helpful if people understood how much Americans are taxed compared to the year 1776.

A symbiotic relationship exists between government and those it taxes. Without a citizenry that can afford to pay taxes, government cannot function. This was common sense to previous generations of Americans, but few in Washington grasp the concept today.