"The Economy" and the Taxpayer
January 7, 2003

by Joe Sobran

     "Would a tax cut be good for the economy?" 
Economists are having their usual eye-glazing debate over 
this question, without bothering to define their terms. 
The Bush administration wants to cut taxes a little tiny 
bit over the next decade, insisting it will help "the 
economy"; their opponents say that even a little tiny tax 
cut could hurt "the economy."

     What do they mean by "the economy"? Is it a single 
thing, or a whole lot of disparate things lumped together 
into a misleading abstraction?

     The first thing to notice is that Americans didn't 
use to talk this way. In the first century of the U.S. 
Government's existence, when Federal budgets were in the 
millions, not trillions, taxes were very low, the country 
prospered as no other country had, individual freedom was 
unprecedented, and Europeans flocked here. There was no 
welfare state; the immigrants didn't come to live off the 
taxpayer, but to reap rewards for their own efforts in a 
system of free exchange. Nobody spoke of a monolithic 
"economy" as the government's concern.

     During the Civil War the Lincoln administration 
imposed the first national income tax. The rates were 
low, 3 to 5 per cent. After the war the tax was ruled 
unconstitutional. Eventually the Sixteenth Amendment, 
ratified in 1913, gave the Federal Government a court-
proof power to impose taxes on income. But the rates were 
still, at first, low: a single man with no dependents had 
to make $50,000 a year (in today's money) before he paid 
1 per cent in taxes. The top rate was 7 per cent.

     Prescient voices warned, however, that the 
Amendment gave the Federal Government a potentially 
limitless power to tax; moreover, it created new 
possibilities of tyranny, by making every U.S. citizen 
directly answerable to the Federal Government for his 
personal finances. An intrusive bureaucracy would result, 
eliminating privacy.

     The worst scenarios have been surpassed. Today the 
ordinary taxpayer pays at rates higher than the 
Rockefellers and Morgans used to pay. Add in state and 
local taxes, and we now pay nearly half our income to the 
government. This is to say nothing of downright illegal 
abuses, like using the tax bureaucracy to target 
political opponents of presidents. And the Federal courts 
have ruled that the taxpayer, in his dealings with that 
bureaucracy, doesn't enjoy the full protection of the 
Bill of Rights against unreasonable search and seizure 
and self-incrimination.

     If Americans had realized what the Sixteenth 
Amendment would entail, it would never have been 
ratified. It has inured us to a new form of "involuntary 
servitude" -- not to private masters, but to the 
government. The courts have never recognized taxation, 
however onerous, as "involuntary servitude" as forbidden 
by the Thirteenth Amendment. So even if the government 
took all your earnings, you wouldn't be, in its eyes, a 

     Such matters, alas, don't interest the economists 
who tangle themselves in arguments over whether a tax cut 
would be "good for the economy." They have no criteria 
for judging whether taxes are unjust to the people who 
pay them. They acknowledge no moral limits on the taxing 
power. They only know it can be dangerous to "the 
economy" to let people keep too much of their own money. 
In principle, all our earnings seem to belong to the 
government. And pragmatic "experts" are at hand to warn 
it against excessive generosity to us.

     Perish the thought that the government already 
takes far too much from us, that it spends our money for 
unconstitutional purposes, that it heaps debt on 
politically defenseless future generations. The Sixteenth 
Amendment is one of the few parts of the U.S. 
Constitution the government still takes seriously, 
construing its taxing power as broadly as possible -- so 
broadly, in fact, as to nullify the rest of the 

     A century ago Hilaire Belloc predicted the 
emergence of "the Servile State" -- a social order in 
which some men are systematically forced by the state to 
support others. That is what a limitless taxing power 
leads to, and has already led to: a "soft" servitude, in 
which liberty is hardly more than a legal fiction and the 
slaves of the state barely sense what they have lost.

     How unfair of Bush's opponents to accuse him of 
trying to restore too much of our freedom! Even if he 
gets his way, there is no danger that Americans will be 
as free as they were in 1913. Neither party wants that.


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