The Secret History of the Income Tax and its unconstitutionality

Our government’s desire for confiscating our money is limitless. As long as the people are willing to tolerate it, and according to whatever limits the people’s tolerance will extend to, the government will confiscate and squander as much as it can. These limitations and the people’s tolerance is determined by their level of ignorance or lack of knowledge concerning the tax code. The amount of the citizenry’s earnings being left untouched by the government is the amount it cannot seize without stirring civil unrest.  

Few taxes were levied during America’s beginning years. A handful was only manageable for our charming federal overseers; that being taxes on alcohol, carriages,  sugar, tobacco, and a few other taxes on basic items for consumers. During the War with Great Britain of 1812, sales taxes were levied on various items of luxury as a means for paying the costs of war. In 1817, with Great Britain’s vanquishment, Congress eliminated all internal taxes and financially supported the federal government with tariffs or imports. Taxes may not have been too problematic for the people during the war with Great Britain, or at least as problematic as they were during the wars after the War of 1812, but war-time since then has always been the best time for raising taxes and having the people be acquiescent to these increases, because they have been programmed to think of them as being indispensable for paying the costs of war. The unwarranted and extravagant money squanderers of our political class would use this to their avail in later years after the War of 1812-1817 and all throughout American history thereafter.  

It was during the Civil War when the first attempt at instituting an income tax came about. Congress passed a bill in 1861 demanding a 3 percent income tax on everyone earning a $600 to $10,000 annual salary. Becoming disgruntled with the income tax,  the populace forced an abrogation thereof and returned to taxing tobacco and alcohol, but government’s desire for instituting a permanent income tax did not die. Instead, it merely went into a state of dormancy. Throughout the next twenty years members of Congress fought tooth and nail to enact another income tax with the introduction of no less than sixty-eight bills.

The Panic of 1893 was a time of economic downturn when the Reading Railroad went into receivership and the businesses and banks investing in it followed suit. The Panic of 1893 was ideally excusable for the government to introduce a new income tax in 1894. As politicians were then as they are now; so obscure with their manifest intentions and doings, the trailblazers of the income tax assigned a benevolent and appealing phrase to the new tax bill: “An act to reduce taxation, provide revenue for the government, and for other purposes.”

The 1894 taxation act foisted upon every American making more than $4,000 annually a 2 percent tax while exempting all federal, state and local government officials from paying the new tax. Where had the principles of “equal treatment under the law” escaped to? A series of events followed after the 2 percent tax on $4,000 annual salaries, in which, at its zenith, resulted in a constitutional amendment, but was soon found to be unconstitutional by the Supreme Court. In 1895 it was declared to be in violation of Article 1, Section 9 of the Constitution. Albeit, it did not end there, but would still evolve into the labyrinthine income tax system we are encumbered with today. The decade following after, the Supreme Court became more morally retrogressive along with public sentiment and awareness being diluted, because of the eventual ratification of the Sixteenth Amendment.

In the Senate, the Republican Party destroyed every bill the Democrats introduced to increase taxes on higher incomes. The Democrats used this as leverage to traduce the Republicans as being bastions for the rich and hoarders of wealth while campaigning to have Republican power nullified. This forced William Howard Taft, while most knew him as being strongly opposed to the tax, to include in his political speeches support for income taxes being good “in principle.”

It was Joseph Bailey, a paradoxically anti-income tax Conservative Democrat from Texas, who in April of 1909 tried to humiliate Republicans by deceiving them into opposing another income tax bill similar to those antecedently introduced. While anticipating the Republican Party’s opposition to the introduction of his team’s bill, Bailey was stunned to see Teddy Roosevelt and many other Liberally-minded Republicans vote in favor of the bill thereby making it seem as though it would surely pass.

 Bailey was not the only one left stunned. In a panic-stricken response, Senator Nelson W. Aldrich of Rhode Island, the Republican floor leader, conferred with Senator Henry Cabot Lodge of Massachusetts and President Taft to strategize about how to ward off Bailey’s tax bill. They decided to make an attempt to outflank their opponents since their own party was too divided to be victorious in a direct confrontation. They gave their support for an income tax under the stipulation of it being enacted via a constitutional amendment. They dissertated amongst themselves about the likelihood not being great of it winning approval from the House and Senate. They talked about about it certainly being rebuffed in the more Conservative states and not receiving the three fourths legislature votes of which were requisite for ratification in it becoming an amendment. The Senate voted 77 to 0 in approval, and the House 318 to 14.

The Democrats reacted uproariously when President Taft unpredictably relayed a letter of recommendation on June 16th 1909 for the passage of a constitutional amendment for enacting a federal income tax. Both Democrats and Republicans filled the ears of the constituents with much claptrap about the income tax and the lie that only the wealthiest people, those who would feel no more than a pinch, would be affected by this and not anyone from the middle or lower classes. The Sixteenth Amendment was instituted on December 7^th 1913.

When the income tax was first instituted only half of 1 percent of the country’s income earners paid any income taxes. A few years later it had become the federal government’s chief source of income. Currently, nearly half of all federal revenue is supported through the income tax. 26 years after the ratification of the income tax, only 5 percent of the population of taxpayers and their dependents had to file tax returns. Today, 80 percent of the population is robbed from the income tax. The “withholding from wages and salaries” facet of the income tax that was employed in 1943 by Franklin D. Roosevelt facilitated the process of tax collection for the government only, having the tax be collected at the payroll window before the taxpayer was even scheduled to pay. This, more than any other facet of the income tax, transmuted the whole blueprint of it being a tax merely on the wealthy into a tax on all of the masses with the middle class taking the brunt of the blow. In the upper brackets, rates have increased as high as 94 percent during times of war and currently it would be 50 percent if we were in a time of peace. People with median income in the middle class pay between 12 and 35 percent.

At last, to put the icing on the cake, the Sixteenth Amendment to the Constitution fulfills one of the Communist Manifesto’s 10 main objectives: “a heavy progressive or graduated income tax.” This is one of very many other features of America that is essentially Communistic. 

Sources: http://www.salestax.org/library/skousen_16history.html

http://www.amazon.com/Fair-Tax-Book-Saying-Goodbye/dp/0060875496