Sunday, December 19, 2010

"Justice in Taxation"

John Stossel, Fox Business Network host of the Libertarian show "Stossel," had an affirmative action bake sale, or rather, as he calls it, "a racist bake sale," to indicate the injustice and inequality of affirmative action.

He writes,

"This week, I held a bake sale — a racist bake sale. I stood in midtown Manhattan shouting, "Cupcakes for sale." My price list read:
Asians — $1.50
Whites — $1.00
Blacks/Latinos — 50 cents
People stared. One yelled, "What is funny to you about people who are less privileged?" A black woman said, angrily, "It's very offensive, very demeaning!" One black man accused me of poisoning the cupcakes.
I understand why people got angry. What I did was hurtful to some. My bake sale mimicked what some conservative college students did at Bucknell University. The students wanted to satirize their school's affirmative action policy, which makes it easier for blacks and Hispanics to get admitted.
I think affirmative action is racism — and therefore wrong. If a private school like Bucknell wants to have such policies to increase diversity, fine. But government-imposed affirmative action is offensive. Equality before the law means government should treat citizens equally."

The video of his little experiment can be seen here:

While I am in complete agreement with Stossel on government-imposed affirmative action in schools and any other organization or facility, be it private or public, it being government imposed inequality before the law and government imposed injustice, I feel the same way about unequal tax rates, specifically the inequality and injustice of federal income tax rates.  According to wikipedia on the federal income tax rate, which for the information they present, the current 2010 tax brackets look like this:

Tax Rate/   Single/   Married (filing jointly or widower)/   Married (filing separately)/   Head of Household

10%=<span> </span>$0-$8,375   <span> </span>$0-$16,750<span> </span>$0 – $8,375<span> </span><span> </span>$0 – $11,950
15%=<span> $8,376 – $34,000 </span>$16,751 – $68,000<span> $8,376 – $34,000 $11,951 – $45,550</span>     
25%=<span> $34,001 – $82,400 $68,001 – $137,300 </span>$34,001 – $68,650<span> </span> <span>$45,551 – $117,650</span>
<span>2</span>8%=<span> $82,401 – $171,850 </span>$137,301 – $209,250<span> $68,651 – $104,625 </span> <span>$117,651 – $190,550</span>
<span>3</span>3%=<span> </span>$171,851 – $373,650  <span>$209,251 – $373,650 $104,626 – $186,825 $190,551 - $373,650</span>
<span>3</span>5%=<span> $373,651+ $373,651+ $186,826+ </span>$373,651+

Edit:  apparently the chart didn't show up as I had typed it, so to see the brackets, go to the following link:

As you can see, individuals or individual couples pay a different income tax rate depending on their annual income levels each year.  It it blatantly unequal.  And if you know American history, income tax was not constitutionally allowed prior to 1913, and it took a constitutional amendment, something that is very difficult to do, to make it legal for Congress to tax individual people's incomes.  

The amendment, Amendment 16, says the following:

"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."

First off, this amendment says nothing concerning the ability or authority of the Congress to set different tax rates for individuals earning certain amounts of annual income.  But, to be fair it also does not specify that those tax rates on individual incomes must be uniform through out the nation.

Indeed, Article 1, Section, gives authority to Congress "to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States;"

Duties, imposts, and excises are mentioned specifically concerning particular types of taxation that must be set at uniform rates through out the nation.  Taxation, however, while mentioned in the beginning of the clause, is lefty out of the end of the clause, under the specific types of taxation that must be uniform.  Now, there are many kinds of taxation.  Duties, imposts, and excises are certain forms of taxation.  Property tax is another.  And income tax is yet another.  Given that it took a constitutional amendment to delegate Congress the authority to tax incomes of individuals in the United States, it is a pretty sound and safe assumption that income taxation was not done in the United States, at least on a federal level, until 1913. Other forms of taxation, like property taxes, were allowed and were done by Congress, but income tax, according to logical analysis, was not.  It was attempted, of course, at the end of the Civil War, during the reconstruction era, but it was shot down by the people and most likely the courts.  It was also attempted again during the era of Grover Cleveland, but he refused to sign the legislation on the grounds that it was unconstitutional.  Thus, those zealous  individuals who so wanted an income tax, for whatever reason, had to get a constitutional amendment in order to have it.  And so it was in 1913.  

Now, I am very much against the idea of an income tax.  I realize that most nations have it, and it has been a common form of taxation throughout the history of nations on the planet.  It is a common historical precedent.  And, in the U.S.A, it is also constitutional.  But, jsut because something is constitutional, doesn't mean it is right or should be done.  Seeing as we live in a land of Liberty and individual rights, including the right to be secure in our private property and the right to own private property, I do not see such forms of taxation as compatible with a Liberal and Free country.  There are obvious differences between the various types of property individuals have the right to possess and be secure in.  There is landed property.  There is physical "material" property, such as a house, a table, a TV, a bed, a car, etc.  But, there is also financial property, or monetary property, namely "money."  I see a distinct difference between monetary property and any personal, physical, "material" property, including land.  Physical material property, being physical and material, is something that must be paid for by means of money.  It's an exchange between two or more individuals or groups, one side exchanging their monetary property, money, for a physical, material thing, and the other exchanging their personal, physical, material property for the other's monetary property (money).  The primary difference between physical material property, including land, and monetary property, a difference that is blatantly obvious to those that take the time and energy to observe and think about it, is that money is nothing more than a physical representation of one's own personal bodily property.  Our Creator, no matter which deity one may worship, according to whatever religion one may practice (be it God, Christ, Brahma, Allah, Jehova, Izanami and Izanagi, the Bahai Creator, or any other creator deity of any other religion) gave us our bodies and life as an everlasting gift to those who chose to come to this earth.  That very same Creator also gave us the eternal gift of personal, individual agency as well.  Thus, our bodies and life in general being our own individual property, property that no one person or group of men/women may take away in the United States without due process in a court of law and a jury of our peers, is eternally our own, to do with according to our own agency.  And it must be remembered that with agency, or freedom of choice, comes the eternal law of consequences as well.  Our choices determine our consequences.  Thus, any output of physical energy we give out as a result of working our body also belongs to the individual as well, to do with according to the dictates of our own individual consequence.  Most of us use our personal bodily property and the energy it produces to do some form of work for another individual or group, in exchange for something in return, which could be a multitude of things, but is most commonly, especially in our modern day, monetary.  We exchange our personal physical labor for money.  Thus, this is not any kind of transaction of one material good for another, but rather is a trading of our individual energy-property for a material representation of that energy-property that can be used legal tender, which in turn can be used in a transaction of one material good for another.  The money we earn has a deep personal connection to our bodies and the physical and mental energy or force/work they put out.  That money is nothing more than a material representation of that given/traded bodily force.  That cannot be taken from us without our individual expressive consent.  Therefore there is a fundamental difference between monetary property and other material properties, like land, a house, or a car.  Just as any other form of property cannot be taken from an individual without his/her own consent, money too, and the very bodily force/work that it represents cannot be taken either.  It is the individual's personal choice to "rent out" one's body and it's forces of energy it produces in exchange for a physical, material representation of that work that was done.  Therefore, every individual has the natural right to be secure in one's property, and it cannot be taken from him/her without consent.  One may live, and even enjoy life without any material goods, including a house, a car, and even landed property.  One can always rent from someone else owning personal landed property.  Some people are happy renting, while others are happy owning their own landed property.  But life and subsistence does not require it.  Life and subsistence, on the other hand, in own current society, does require monetary property, a material representation of our personal, bodily exertions, our work.  In order to obtain food, one must have money.  In order to obtain the basic essentials of clothing to keep one warm during the colder seasons and cool during the hotter seasons, one must have money.  In order to obtain a shelter in which one may permanently live, if so desired, one needs money.  Therefore, money is a necessity that is required in order to live; not necessarily to make one happy, but the live in general.    

Thus, when it comes to taxation, it used to be in our country that taxes were placed upon a material object that one exchanged monetary property for.  It was the individual's choice to purchase that specific material good, which means it was the individual's own choice to voluntarily give his/her consent to the taxation placed upon the good, including landed property.  Not only did the give consent to have those taxes laid upon those material objects, but they also had the agency to choose whether to consent to pay that tax or not, by having the choice to purchase the material object.  Consent was two-fold.  This was never the case, however (again, at least federally) with monetary property, and the special connection it has to the body and bodily energy, until 1913 that is, when all the people in all the states in the nation gave their consent to have their monetary property taxed as well.  Thus, we too, in our support of the Constitution have given our consent to having our individual monetary property taxed as well.  But we don't really have the choice of earning money or not.  As already pointed out, money is a necessity in order to live, thus we must have it.  There is no choice in this, not like there is in choosing to buy a material object like food, cars, imported goods, furniture, a house, or even landed property.  Therefore, consent to the income tax is only one-fold.  We consented to have our income taxed, but we have no real choice in earning money or not.  It's very much different from the two-fold consent aforementioned.  But, while the 16th Amendment remains in the Constitution, I too will support it, even though I don't personally like it, because my allegiance is to the Constitution.

Personally, I would be in favor of repealing the 16th Amendment, because, as I have already stated,  I feel that the income tax does not fit naturally within a Free, Liberal country that formed based off of the slogan of no taxation without representation and no taking of our individual property without our individual expressive consent.  I feel like it corresponds to a person trying to fit a square peg into a round hole.  It just doesn't fit right.  

I personally feel it would be better to return to such a taxation system, where one showed one's own personal consent to taxation not only through their representatives in Congress, but by personal consent by purchasing an item that has a tax on it.  But, I also realize that many individuals in American favor the income tax, and that it might not be the most wise thing to demand a full repeal of the income tax, at least not while only a portion of the American people would support such a repeal while another portion would not.  Therefore, I feel it more prudent and realistic to propose that, instead of repealing the 16th amendment, we limit it, making it so that Congress, although still delegated the authority to tax the incomes of individual persons, must be limited in that authority, by being required to impose a uniform tax rate on all income earnings, no matter how much or how little it may be, so as to truly make ALL equal before the law.  The Preamble of the Constitution states, "We the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America."  ESTABLISH JUSTICE!  To me, having different income level earners pay a different tax rate on their income does not "establish justice" in the union.  Rather, it does the exact opposite.  It established injustice and inequality before the law.  Would it be considered justice to allow lower income earners a trial by their peers while not allowing this to higher income earners?  Would it be considered justice to make only certain income level earners pay income tax while not requiring other certain income level learners to pay tax on their income?  Would it be considered justice if the current situation concerning income tax rates were reversed and the lower income earners had a the higher rate, while the highest income level earners paid the lowest rate?  Or if only lower income level earner's rates were increased while the highest income level earner's rate remained the same, or were lowered slightly?  NO!  Then why is it considered "justice" to have different rates for different income level earners?  BECAUSE IT ISN'T!  Thus, because the 16th Amendment neither specifically and clearly forbids nor allows Congress to impose varying tax rates on people earning different amounts of annual income, it is my humble suggestion that Congress introduce legislation that would require a uniform income tax rate, establishing justice in the union.  What that rate should be, will utlimately be up the the people and their representatives in Congress, but it must not be something too terribly high, nor too terribly low.  Indeed, Justice John Marshall, Supreme Court Justice, ruled in McCulloch vs. Maryland, that,

"It has also been insisted, that, as the power of taxation in the general and state governments is acknowledged to be concurrent, every argument which would sustain the right of the general government to tax banks chartered by the states, will equally sustain the right of the states to tax banks chartered by the general government. But the two cases are not on the same reason. The people of all the states have created the general government, and have conferred upon it the general power of taxation. The people of all the states, and the states themselves, are represented in congress, and, by their representatives, exercise this power. When they tax the chartered institutions of the states, they tax their constituents; and these taxes must be uniform."

"THES TAXES MUST BE UNIFORM!"  Therefore, let us make ALL of our federal taxes uniform, set a certain specific rate for all.  Let us bring justice to taxation.  Enough of this unfair, unjust taxing of and individual's own hard earned money!

I would also propose a constitutional amendment that required the people's representatives in Congress to vote upon keeping the income tax every 10 years or so, so as to give every generation of Americans the opportunity, if they so desire, to consent to having said income tax, at the very least once during their lifetime.  I believe it should be the people's decision to have an income tax, and that that decision should be made at least once by every generation.  Having a vote upon the income tax in Congress, every 10 years or so, would allow such consent from every generation in America.  And it would also be a good compromise between the two extremes of keeping the income tax permanently and banning it outright.  If the people elected individuals who would not renew the income tax, then it would be prohibited for 10 years until the chance came up again for the people's representatives to vote upon its continued banishment or return.  I believe this would be a much more just and equal system.  

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