Jeffrey L. Scribner:
The House of Representatives voted last week to hold Lois Lerner in contempt for her failure to testify about her actions involving misuse of the taxing authority to harass and delay the application by certain groups for tax-exempt status. These applicants were mostly those opposing big government, increased taxation, etc. By the time all of this activity is uncovered by investigators, we may find that the IRS did additional questionable things and may have even influenced the 2012 election results.
This is undoubtedly not the first time the IRS has been used for political purposes. The point to be made is that the IRS is a tempting and powerful weapon that might be used for political gain, and this activity may be hidden for a long time.
The Constitution as originally written would not have permitted an agency with the power of the IRS, or most of the taxes the IRS is supposed to collect. Article I, Section 9 of the original Constitution provides: “No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken.” The Census was and still is used to apportion the seats in the House of Representatives among the states. Thus, the original Constitution provided for direct taxation only if it followed representation. The federal government lived under this arrangement (with a few temporary and questionable diversions) from 1789 to 1913, when the Sixteenth Amendment was ratified on February 3 of that year. The Sixteenth Amendment provides: “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.”
Taxation was divorced from representation. This has predictably led not only to higher taxation and more government spending, but also to abuses of the taxing authority such as, but not necessarily limited to, those currently being investigated.
The founders were smart enough to limit the taxing power of the federal government to “Taxes, Duties, Imposts and Excises … but all Duties, Imposts and Excises shall be uniform throughout the United States[,]” and to “direct taxes … apportioned among the several States … according to their respective Numbers.” (See here and here.) This was undone by the Sixteenth Amendment.
After some experiments that generated questions concerning constitutionality, Congress enacted an excise tax on corporations based on income in 1909. When the Sixteenth Amendment was ratified in 1913, this became the Corporate Income Tax, and the IRS was established to collect both the corporate and personal income taxes.
That is how the stage was set for abuse. It is almost axiomatic that changes to the Founders’ prescriptions will upset some balance somewhere and create unforeseen results. It is very hard to teach this to advocates of big government or members of Congress seeking to enact some change that will further the desire of the day.
The abuses discussed above are not the only problems with the personal income tax and the corporate income tax. The byzantine tax code got that way because of lobbying and campaign donations that resulted in little changes to give this one or that one a small favor that might amount to a very good sum of money. This practice continues. The corporate income tax in particular accounts for more lobbying activity than any other statute passed by Congress.
Now, this is not only corruption; it is also massive inefficiency and a drag on the economy. The personal income tax is so complicated that the average citizen cannot understand it. He uses a tax service on the internet or in a storefront or an accountant to do his taxes. This results in a cost of paying the tax that is sometimes more than the tax itself but in any case still an expense that the taxpayer should not have and would not have with another form of tax or even with a simple income tax. This “cost of compliance” is even more pronounced in the corporate income tax. The typical large corporation has a platoon of accountants to calculate and file the company’s income tax. With this kind of compliance cost, hiring lobbyists to get tax favors makes good economic sense. And lobbying success makes campaign contributions seem to be good policy. How can any tax so inviting to corruption, so costly to administer, and so costly for the taxpayer to comply with be a good way to fund the government?
I think that the 16th violates the 13th
“Section 1. Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.
Section 2. Congress shall have power to enforce this article by appropriate legislation.[1]
They forcibly take monies from you without any compensation. that is involuntary servitude
Our legislature or at least the individual members, appear to have devolved to the point of only existing to service corporate lobbyists and their insidious requests for minute changes to the tax code. Changes that reward corporations and congressional members with a legalized form of graft, and does nothing to benefit the country; indeed, it only complicates the tax code and makes the cost of compliance, greater than the tax burden. Consequently, businesses are forced to double their tax burden, because of the cost of compliance, whether in the form of accountants or the costs of lobbying and congressional graft, and the state only receives half of this tax burden.
Who argues in favor of this legalized corruption? Those who hold the reins of power in congress and those who their existence to the corruption tax lawyers, preparers, lobbyists and they will never relinquish this ever-tightening ligature around the American economy.