Totalitarianism is a French invention. Napoleon Bonaparte was the first totalitarian despot. Not content to merely bully and rob the population, Napoleon sought to gain control of every influential aspect of society. He instituted total press and artistic censorship; he created the first modern police state. The oppressive regimes of Russia, Prussia and Austria all owed a debt to Joseph Fouche, Napoleon’s minister of police. When Jean-Baptiste Bernadotte, one of Napoleon’s marshals, took control of Sweden in 1809, one of his first acts was to establish a secret police force, something new to Sweden. Wherever the French prevailed, the law of the land was the Napoleonic Code. Under this French notion of justice anyone accused of a crime had to prove to the court that he was not guilty; it was the sort of “justice” a despot could love. The Napoleonic Code held sway in the Louisiana Territory until the territory was purchased from Napoleon by the young United States.
The brilliant architects of our American republic sought to limit the overbearing power of government and to ensure justice for individual defendants. In American courts of law the burden of proof is on the government: the accusing governmental agency must prove its case against the defendant; the defendant does not bear the burden of proving that he is not guilty.
The cause of liberty seemed to be progressing nicely. Then Congress struck. As late as 1893 the Supreme Court declared income taxes to be unconstitutional, even after it had permitted a restricted income tax during the Civil War on very thin grounds. But as the nation prospered liberals began the chant of “soak the rich.” When conservative Republicans in the Senate blocked Democrat bills to tax higher incomes, the Democrats branded the Republicans “the party of the rich.” Alexis de Tocqueville’s prediction that American democracy would be doomed once the great mass of underachieving voters got it into their heads that they could vote themselves anything, including the fruits of other men’s labor, seemed about to come true.
In 1909 a conservative Southern Democrat who opposed the creation of an income tax introduced an income tax bill with the intent of further embarrassing the Republicans. Senator Joseph Bailey was stunned when Teddy Roosevelt and a gaggle of liberal Republicans supported his proposal. Senate Republican leaders, hoping to sink the income tax proposal, but also wishing to appear to support it in an effort to shake off the “party of the rich” stigmata, introduced the income tax as a constitutional amendment, confident that it would never be ratified by three-fourths of the states. When President Taft sent a message to Congress endorsing the proposed constitutional amendment, the Democrats were caught with their pants around their ankles. The mindless momentum of the “soak the rich” mantra propelled the income tax amendment to unanimous Senate approval. The House vote was 318-14.
When the Sixteenth Amendment became the law of the land on February 12, 1913 “the rich” stashed their earnings in charitable foundations to avoid taxation, which was 1% of the first $20,000 of taxable income, and up to seven percent of income above $500,000. Few people filed. As late as 1939, only 5 percent of Americans filed income tax returns. The American middle class had no clue that they would be the future victims of a burgeoning “soak the rich” ideology espoused by home-grown utopian liberals.
Preeminent among these utopians was President Franklin Roosevelt, who concocted a scheme to pick the pockets of every American working person. It was called “withholding taxes.” The liberals just know in their hearts that it’s okay to pilfer your earnings if the money will be used to bankroll a project that they deem worthy. Never mind that you earned the money and have worthy needs of your own. They are progressives; you are just a reactionary boob with low-brow tastes and a silly nostalgic dream of supporting a family or buying a car with more than three cylinders.
Here’s a quote from former IRS Commissioner T. Coleman Andrews: “Congress went beyond merely enacting an income tax law and repealed Article IV of the Bill of Rights by empowering the tax collector to do the very things from which that article says we were to be secure. It opened up our homes, our papers and our effects to the prying eyes of government agents and set the stage for searches of our books and vaults and for inquiries into our private affairs whenever the taxmen might decide, even though there might not be any justification beyond mere cynical suspicion.” Worse yet, the current IRS operating methodology exposes the American public to that favorite tool of tyrants: the Napoleonic Code. The first totalitarian has had the last laugh; American workers who are suspected of not paying what the IRS demands from them must prove to the IRS bureaucracy that they are not guilty. The burden of proof has been thrown back onto the individual citizen.
The U.S. tax code is now over one and a half million words in length. Bill Clinton signed off on 1,260 changes in the code which necessitated a dozen new tax forms and scores of revisions in the old forms. The IRS estimates that a taxpayer who itemizes his deductions and who has a bit of investment income will spend over 22 hours completing his tax forms, up from 19 hours the year before. Professional tax preparation businesses flourish as millions of fearful citizens shrink from the daunting complexity and opaque language of the tax code. H&R Block thrives on fear. Their ads declare: “We know. Do you?”
Thus millions of American citizens have become the unpaid vassals of an ever-expanding tax collection bureaucracy. The Clinton administration was a prime generator of agonizingly intricate tax questionnaires. Bill, Hillary and their sidekicks sought to make Americans behave in desirable ways by offering them “targeted” tax cuts: do this and get back a dollar, do that and get back a dime. Taxpaying would henceforth be an experiment in conditioned reflexes, with the American taxpayer playing the role of Pavlov’s dog. Not content to rob us of our earnings and our valuable time, the government endeavors to strip us of our dignity as well.
Every new “benefit” requires a new line on some tax form and new forms to compute those credits. Taxpayers claiming the child credit must complete an 11-line worksheet and, if their answers raise a red flag, another 10-line form to determine whether they qualify under required income restraints. Schedule A, used for itemized deductions, requires more than four hours to complete. Even small-scale investors must complete Schedule D, a fifty-line horror of baroque confusion. The citizen’s torment is made even more intense by continual modifications of these forms.
The Masters of Mental Torture at the IRS have outdone themselves with the advent of the alternative minimum tax. This little thumbscrew was intended to squeeze “the wealthy” and prevent them from preserving their earnings through deductions and credits. The cowardly cry of “soak the rich” didn’t trouble the middle class when this legislation was ratified; they didn’t notice that the definition of who was “wealthy” had not been indexed for inflation. Consequently, millions of middle-class Americans are now defined by the tax code as “wealthy.” Millions of middle class taxpayers must now calculate their taxes in two different ways and then pay the higher amount. That means completing a 12-line IRS worksheet to determine one’s alternative tax status and then wading into a 50-line tax form to discover the amount of the tax burden. Millions of middle class Americans now experience fear and uncertainty every April because they were content to “screw the rich.” They are now shocked to discover that they are “the rich” in the eyes of the government tax collectors.
The rich, by the way, deserve a round of applause; they have been doing the heavy lifting for America’s social programs from the very beginning. In 1995 the top 50 percent of wage earners paid 95.4 percent of all federal individual income taxes. The top 1% paid a whopping 30.2% of all income taxes. The bottom 50% of wage earners paid barely 5% of the taxes collected. The overwhelming majority of America’s wealthy citizens earned their wealth by pursuing mundane occupations as doctors, lawyers or small businessmen whose weekly work hours far exceeded those of the average taxpayer. These people struggled and sacrificed and studied; they turned off Oprah, got off their asses and built a decent life for themselves and their families.
In the eyes of the liberals and their mendicant constituents, these hard-working Americans are the hated “rich.” If you should decide to struggle and sacrifice to achieve The American Dream, then you too can look forward to becoming the target of their brainless liberal envy and hatred. Those of you who dropped out of school, who never pursued a career, who screwed-up your marriages or developed an addiction to video poker are the natural constituency of liberal politicians. Paging Hillary Clinton.
Democratic Party Big Thinker Senator Paul Wellstone once denounced our president’s proposed tax cuts as “Robin Hood in reverse.” Huh? The American “rich” are families who earn their daily bread by intellectual, legal and managerial endeavors. They don’t steal from the poor; they want the poor to prosper in some dignified way. America’s rich leave the business of robbing the poor to the liberal utopian schoolmarms who impose burdensome taxes on the poor man’s simple comforts: alcohol and tobacco.
The government doesn’t earn a dime; it takes our earnings by force. Any surplus held by the government is proof that the government stole more from us than it needed to bankroll its self-created projects.
President Clinton vowed to crush any Republican tax cut only after he had won election in his first campaign by promising us tax relief. Everyone who opposed a tax cut behaved as though the collected tax treasure was theirs, and not ours. State governments are sitting on bulging coffers swelled with undeserved tax booty. The human cost is staggering. Damaged families and broken dreams are what finance the careers of liberal politicians at every level of government. The mantra of the liberal is “shut up and pay.”
Do we at least have the solace that our stolen money is being put to good use? Of course not. Comptroller General David Walker told a House Government Reform subcommittee that 24 major federal agencies cannot account for most of their assigned 466 billion dollars. A government-wide audit by the congressional General Accounting Office concluded that the federal government does a terrible job of keeping track of where our money goes. For instance, the Department of Health and Human Services simply pissed away $12.6 billion in bogus Medicare payments. (Unofficial motto: “It’s not our money, Sucker!”)
The government can inflict such pain on our Land of Plenty for one simple reason: the federal government is enormous. True, the Democratic Party’s Tower of Truth, William Jefferson Clinton, did declare in 1996 that the era of Big Government was over and that the government employed a mere 1.9 million civil servants, but some folks remained skeptical. In his book “The True Size of Government,” Paul Light demonstrates that in 1996 a “shadow government” provided 12.7 million full-time jobs at the taxpayer’s expense. These jobs were funded by federal grants, contracts and mandates. If we add on to this shadow government the civil service and 1.5 million uniformed military personnel and 850,000 postal employees, then the true size of government is close to 17 million full-time jobs, or nearly nine times bigger than what Bill Clinton and his kind would have us believe. Says Paul Light: “Faced with constant pressure to look smaller, most government agencies did what comes naturally: they pushed more and more of their mission out to contractors, grantees and state and local governments, while protecting the middle and upper tiers of the work force.”
The Big Lie is the illusion of smallness that both political parties would have us believe. This is the truth: government bureaucracies are spectacularly wasteful and ridiculously large. The price we pay for this sprawling nanny state is organized banditry, rampant dishonesty, ever increasing governmental coercion, the invasion of our privacy and the erosion of our right to personal property.
The liberal media have struggled mightily to characterize the president’s tax cuts as a lavish giveaway to the rich. But it’s not a giveaway; it’s just the cessation of ritualized theft. The new tax law cuts the top tax rate by only nine percent. The rate cut for low and middle-income taxpayers is 30 percent. A couple with a $200,000 taxable income would not pay ten times as much as a couple with a taxable income of $20,000; they would pay 26 times as much. In a society that pretends to disdain human sacrifice, that should be enough.
The Socialist Labor Party never got more than 12 percent of the votes in any American national election, but the rationalizations and perspectives of the socialists were eagerly co-opted by the Democrat Party. In true Marxist style, the federal government now takes from each according to his abilities and gives to each according to his needs. The arrogant bureaucracies that now rule our lives are largely the legacy of leftward-tilting FDR and LBJ, two men for whom the Constitution was an irritating impediment. They were helped along by a legion of third-rate political hacks who thought themselves far wiser than the Founding Fathers. No stupid program was left untried.
Take, for example, the Ponzi scheme known as Social Security. Like all Ponzi schemes, Social Security enriches those who got in on the scam early, at the expense of the latecomers. The days when there were 40 workers paying into Social Security for every person who was receiving a payout are long gone. Today there are only three workers paying into the system for every person who is milking it, and the number is falling. Twenty-five percent of those who are collecting Social Security could live comfortably without it.
Social Security is a rotten deal for the young. A self-employed 23-year old making $30,000 a year will be stripped of 15% ($4500) of his earnings to pay the cost of Social Security and medical coverage for retirees. If this young worker wants health coverage for himself, then he’ll have to shell out another $5,592 each year for insurance that is priced at three times its true value because of governmental regulations. Add on income taxes, sales taxes, property tax, sundry other taxes and car insurance, and this young worker has been taxed and regulated out of almost $20,000. But hey, the blue-rinsed golf-cart grannies are in hog heaven and the kid still has ten grand left over for food, shelter, clothing and an occasional movie.
Or how about this example? A young couple born in 1981 will have about $900,000 of their earnings taken from them by force to feed the Social Security scam. If that money had been invested in treasury bills it would have yielded $1,700,000 at their retirement. The stock market would have yielded about $3,700,000. Social Security? Maybe $700,000. If they should die, then not a penny of their stolen wealth will go to their heirs. That money is forever lost to the Ponzi scam. Black America, with its younger average age and its shorter life expectancy, is especially hard-hit by a system that retards their efforts at wealth accumulation. By dying younger, blacks get little back from the system. Pilfering their weekly pay checks deprives them of investment opportunities. Their stolen money cannot be passed along to their loved ones. If young workers want justice for themselves, then they had better make their voices heard. Social Security is a broken antique, a tool for the exploitation of the young. Fix it, or scrap it. The tax burden must be lightened.
Defenders of the welfare state detest any attempt at tax relief. To them government surpluses are not evidence that the population was overtaxed, but just another opportunity to lavish other people’s earnings on their constituents in the name of utopian progressivism, or “it takes a village-ism.” Democrat Rep. Ellen Tauscher of California promoted the idea of a “trigger mechanism” that would stop all tax cuts whenever there was not enough revenue coming in to cover government spending. This sounds responsible, but in actual practice it would mean that the liberals could scuttle any tax cut simply by throwing a gush of tax money at their favorite projects and thereby drying up the surplus. It’s their nature to behave this way. Rep. Tauscher tried to tart-up her bad idea by calling it “fiscally conservative.” A better idea would be a “trigger mechanism” that would stop government spending whenever revenues ran low. It’s a simple idea: don’t go into debt; end deficit spending; have a spending freeze whenever there is not enough money coming in to meet expenses. It won’t happen because the true objective of Rep. Tauscher’s “trigger” is to keep spending your earnings like a drunken sailor.
One popular liberal scare tactic is to blame the Reagan tax cuts for the increasing deficits of the 1980s. This claim is bogus. Ronald Reagan oversaw a cut in tax rates, which did not reduce tax revenue. As Mr. Reagan had predicted, more revenues were collected in each year of his two administrations than had been collected in any year of any previous administration. Congress simply squandered every dime of this revenue and then took America into debt. Congressional irresponsibility, not tax cuts, sent America into debt. When liberals try to dupe the stupid by blubbering about “tax cuts for the rich” they are appealing to the ugliest of all human emotions: envy. In truth, people in the upper income brackets paid ever more taxes during the Reagan years, but they paid these taxes out of rising incomes. The liberals hate Reagan because the fruitful economy that he created increased the wealth of the already-wealthy, even though the rich were now paying more taxes and were paying a higher percentage of the total tax burden. In other words, the rich pay a disproportionately large amount of America’s tax burden so that less productive people don’t have to pay so much. Don’t hold your breath waiting for a liberal to say “thank you.” Some people think that being subsidized with other people’s earnings is their birthright.
The Enforcers
Agents of the Internal Revenue Service operate, more or less, in the manner of Napoleon’s secret police. American citizens are subject to summary searches and seizures of their property; the Fourth Amendment of the Bill of Rights has been reduced to a fiction. All who fall under IRS suspicion are subject to the worst aspect of the Napoleonic Code: everyone is guilty until they can prove themselves to be not guilty. A year-long federal study says that IRS agents can “reduce individuals to penury, make them indigent overnight and strip them of all means of supporting their families.” The IRS can place liens on bank accounts, garnishee wages, and seize and sell an accused taxpayer’s property without a hearing or a court order.
For example: Rancher and lumberman Ed McCanse worked more than three decades to build his ranch in La Grande, Oregon. Mr. McCanse sold his ranch in anticipation of retirement. The Internal Revenue Service surprised Mr. McCanse with the unwelcome news that he had been assessed $119,000 in unpaid taxes on the sale of his ranch, payable immediately. Two days before Christmas IRS agents seized Mr. McCanse’s bank account and also his lumber-mill stock. The hapless lumberman arranged to sell the lumber at a sacrifice price in a desperate attempt to pay the assessment. Then he began a trying three-and-a-half year struggle to recover his earnings. The IRS finally refunded the $119,000. A note from the IRS said: “We sincerely regret the problems that the McCanses encountered.” It was scant comfort to Ed McCanse, who spent three more years and $90,000 trying to straighten out the mess that the IRS had made of his life. Said Mr. McCanse: “During this seven-year ordeal, I have worried myself nearly into the grave.”
Or how about Los Angles contractor Melvin J. Morris, Jr. whom the IRS accused of owing back taxes. Mr. Morris fought the claim and the IRS counter-attacked by seizing his property. Then IRS agents went around blabbing to Mr. Morris’ creditors that Morris was a tax deadbeat. Consequently, Mr. Morris’ good credit evaporated and he was driven out of business. Two years later the IRS acknowledged that Mr. Morris hadn’t really owed any taxes and they returned to Mr. Morris money that had been improperly seized from him. When Mr. Morris sought justice and sued the IRS for the damage done to him, a federal judge informed Mr. Morris that the government cannot be sued without its permission.
The IRS is not required to notify citizens of any levy it places on bank deposits and investment accounts. One IRS agent told the Washington Post that he often levied on wages of people who were totally unaware that they owed back taxes because the IRS had sent the notices to the wrong address. Supervisors are supposed to review proposed seizures, but more than a million levies and liens each year are conducted with no meaningful supervision.
Crushing the little guy is what the Internal Revenue Service does best. Small taxpayers are far more likely to be targeted for collection than are big and powerful tax delinquents, according to a House subcommittee probe. The IRS has publicly repudiated the use of statistics on cases closed as the basis for promoting enforcement agents within its bureaucracy, a practice that was standard within the IRS. Vincent Connery, former president of the National Treasury Employees Union, testified that “Production goals and quotas are the name of the game. The commissioner banned the present system, but he gave them no other system.” One Chicago IRS official was demoted for refusing to force a revenue officer to seize a business. Philip Vision told a House subcommittee that “the extreme pressure applied by upper IRS management has forced individual revenue officers to bend, circumvent and misapply regulations to satisfy the agency’s insatiable hunger for statistics.” That’s no surprise to the tax bureaucracy’s countless victims.
The scales of justice are weighted heavily against the small businessman and the individual citizen. All of this nation’s regulatory agencies are staffed to bursting with taxpayer-funded attorneys with an unlimited capacity to litigate. The little guy must consider the cost of contesting capricious bureaucratic edicts and accusations. If the cost of legal victory is too high, then the innocent must knuckle under to forces they know are unjust. Compliance through coercion is becoming the rule. It’s easy for tax collectors to inflate their statistics by steamrolling people who can’t afford attorneys and so people pay up. . .and hate the government that pretends to be a republic but behaves like a monarchy.
Congress has established many bureaucracies which now regulate almost every aspect of our lives. The size of these agencies keeps growing. Millions of Americans must now deal with federal authorities whom nobody elected and whom neither the Congress nor the executive branch has been able to control. Federal agencies have become a law unto themselves and none of them is more tyrannical than the Internal Revenue Service. And to think that the income tax was only proposed to Congress as a cynical political joke. The joke’s on us.
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Copyright 2002
Thomas Clough