There is a remarkably simplistic, captioned sepia-toned photo making the rounds on several of the social networks. I won’t post it in this entry, but the gist is that until 1913 Americans “kept all of their earnings”, and in spite of that fact we had schools and roads and railroads and an Army and unicorns pooped tax-free rainbows. Therefore people today are being “extorted”.
The implication is that prior to 1913, when the 16th Amendment was ratified (allowing Congress to levy income taxes without apportioning them among the states or basing them on the United States Census), we weren’t paying taxes on our earning, and we did just fine. Therefore taxes = extortion.
But this is a remarkably ignorant reading of history. Just because in 1913 Congress could levy taxes without apportioning them, doesn’t mean taxes didn’t exist before then. You can’t even claim to have read the Constitution and say that, since the 16th Amendment was just a modification of Congress’ ability to levy taxes as granted in Article I, Sections 2 and 8; not something brand new. Prior to 1913 there were direct and indirect taxes: excise taxes and tariffs, import taxes, property taxes, taxes on economic activities, personal income taxes (on and off since 1861), inheritance taxes, poll taxes, sales taxes, etc. Or does someone think the state and federal governments worked with zero budgets until 1913?
In addition, a lot of the income taxes imposed before 1913 used wars as their justification, so that helps explain the Army, Navy and Marine Corps. Heck, one of the main reasons the Constitution came to be was because the nation was unable to pay its war debts, thanks to the lack of collection powers in the Articles of Confederation. And prior to the establishment of public education, schools and colleges were available only to those who could afford to pay for them personally or within their community, so it wasn’t exactly an educational utopia for those who wanted the opportunity to better themselves but lacked the money.
But fundamentally we need to ask the question: does anyone think that 1912 was the high-water mark for American society and the welfare and happiness of its citizens, one that we should strive to recreate?
Sure, there is tax fraud and waste today, and we can work to eliminate that within the current tax context. But as my friend Ben Zvan said after April 15th this year, quoting Oliver Wendell Holmes: “I like to pay taxes. With them, I buy civilization.” To equate taxation with extortion or to claim that prior to 1913 no one paid taxes and everything was peachy because of it is ridiculous.