I just recently got on Facebook — and this week, I was invited to join the Fair Tax group. I've always felt that the income tax system is irreparably broken — but I believe in having the facts to back up your claims, so here's a rant about all the reasons why the income tax is unconstitutional, wasteful, and just plain wrong.
Not Part Of The Original Plan
If you think that personal income tax has always been an inherent part of our American system — perhaps written into the Constitution — you are sadly misinformed. Our founding fathers were staunchly opposed to taxing individuals on their private income. The taxation of productivity is actually quite anti-capitalist, and was seen as a disincentive to helping our fledgling country grow. The Constitution was written to promote taxing consumption (via tariffs on the import of goods and indirect excises on corporate profits) rather than wages — a more fair and equitable way to raise the revenues needed for running our federal government. Alexander Hamilton stated in "The Federalist #21" that, "It is a signal advantage of taxes on articles of consumption, that they contain in their own nature a security against excess. They prescribe their own limit; which cannot be exceeded without defeating the end proposed, that is, an extension of the revenue." The goal was to protect citizens against unfair taxation by their government (a major concern while under British rule). We managed to do just fine as a nation for 124 years without a national income tax. So what changed?
Article 1, Section 2, Clause 3 and Article 1, Section 9, Clause 4 of the Constitution decreed that Congress could impose a "direct" tax (meaning taxes paid directly to the federal government) only if the law apportioned that tax according to each state's population. So if the government wanted to collect a million dollars in taxes, it had to determine how many people resided in the country (by means of a census), divide that million dollars equally among the total population — then figure out how many people were in each individual state, and assign each state its portion of the tax based on the population. But the STATES were responsible for paying this tax, not the individual. The states, in turn, were free to charge citizens a property tax to cover their portion of the debt. But again, this was an indirect tax, and it was tied to consumption. The more property you owned, the more tax you paid — if you owned no property, you were exempt from the tax. This is how a direct tax is legally and Constitutionally collected.