TAXATION THROUGH THE AGES
by Joe Sobran
(Reprinted from SOBRAN'S; December 2003; pages 3-5)
I've told this story before, but I'll tell it again.
In the summer of 1965, when I'd just finished my
freshman year in college, I was reading a little book
called THE LAW -- a long pamphlet, really -- by the
nineteenth-century French legislator Frederic Bastiat,
when I was riveted by a single sentence: "Look at the
law, and see if it does for one man at the expense of
another what it would be a crime for the one to do to the
other himself."
In Bastiat's view, government, beyond the strictest
limits of justice, became "organized plunder," a device
by which "everyone seeks to enrich himself at the expense
of everyone else." In other words, government itself
tends to become the very evil it is supposed to prevent:
crime. But it confuses people because it enacts criminal
acts under the forms of law.
The simple insight rocked me. It upset my faith in
my country and its basic justice. If Bastiat was right,
the United States was already profoundly corrupt. It took
me years to come to terms with this idea. Today it seems
to me almost self-evident. I marvel that anyone with
common sense thinks otherwise.
This means, for openers, that taxation is a gigantic
system of fraud, robbery, and extortion. Most taxpayers
receive nothing to justify the amounts they are forced to
pay. Yet it's the taxpayer, not the ruler, who is treated
as a criminal suspect and required to "confess" his
earnings and holdings. The ruler isn't penalized for
anything he does to the taxpayer.
This fact makes me wildly indignant, and I'm
frustrated and baffled that so few Americans share my
feelings. We are being robbed and cheated on an
astonishing scale.
Once, during a radio interview (I've been known to
repeat this story too), I was asked, "Why don't you ever
criticize big business the way you always criticize big
government?" I answered, "I'm not forced to do business
with General Motors. If I do so voluntarily, I get a car
for my money. But I am forced to do business with the
government. Every year I'm forced to pay it roughly the
price of a new car. And I've never seen that car. Someone
else gets it."
Bastiat, a devout Catholic, reasoned about the state
from a natural law philosophy. He concluded that the
state violates the most basic principles of natural
justice. Once you start thinking that way, you can hardly
avoid thinking of politics as a largely criminal
activity.
At some level, most people know this
intuitively. I think this accounts for the huge
popular appeal of THE GODFATHER. We are all taught
that the government is there to protect us from
criminals. THE GODFATHER audaciously reverses our
civics lessons: it shows us a benign master criminal who
will protect us from the corrupt government. This is
another sentimental myth, of course -- unlike real
mafiosi, Don Corleone never extorts "taxes" from
shopkeepers in the form of protection money -- but it has
enough truth to seize our imaginations.
But the state's myth still prevails, and we submit.
Most people see nothing questionable about state
taxation, and politicians complacently assume their right
to take our wealth.
Some Oklahoma politicians, for example, are
currently in a tax-boosting mood. They want to raise
taxes of all sorts -- income taxes, sales taxes, property
taxes, excise taxes, you name it.
According to the National Taxpayers Union, the
average Oklahoman *already* pays more in taxes --
Federal, state, and local -- than for food, shelter,
clothing, and transportation *combined.* This amounts to
26.5 per cent of per capita income.
How much is enough? What is the limit? At what
point, short of taking 100 per cent of our earnings, do
our rulers feel they are taking too much from us?
The obvious answer is that they recognize no limit.
The subject never comes up. They view the taxpayer as an
inexhaustible resource.
And why shouldn't they? The sad fact is that the
American taxpayer is a remarkably passive creature. He
merely grumbles at conditions far more oppressive than
the tyranny that drove his ancestors to rebel against
British rule in 1776.
One of the chief complaints of the American colonist
was that he was taxed without his consent. Yet by today's
standards, his taxes were amazingly low. Precise figures
are hard to come by, but in 1764, for example, the
average American was taxed by the Crown at the rate of
sixpence per year. That is not a misprint. Six pennies
per year. One penny every two months. Even adjusting for
inflation, that is a pretty light tax burden. Today's
children pay more than that in sales taxes.
And the British were cautious about raising taxes.
Even a slight tax increase, as on a commodity like tea,
could bring the colonies to a boil.
The Americans knew that a principle was at stake.
Unlimited taxation could mean slavery. That is why they
tried, at every turn, to nip it in the bud.
Under slogans like "No taxation without
representation," Americans fought for independence and
established their own governments. They thought
self-government was their bulwark against tyranny and
overtaxation.
But the problem turned out to be more complex. Even
elected officials found it easy to abuse the taxing
power, and self-government could be as predatory as
foreign rule. Senator John C. Calhoun remarked that the
most surprising thing experience in government had taught
him was that it was easier to raise taxes than to cut
them.
The Lincoln administration imposed the first Federal
income tax to meet the costs of the Civil War. But again,
by our standards the rates were amazingly low: the basic
rate was 3 per cent, with a top rate of 5 per cent. Even
so, after the war the U.S. Supreme Court soon ruled that
a Federal levy on incomes was unconstitutional.
In 1913 the Federal Government surmounted this
obstacle by winning a constitutional amendment
authorizing taxes on incomes. No upper limit was set, but
most Americans were unaffected. "Incomes" were narrowly
defined; an unmarried taxpayer had to make about $50,000
(in today's money) to pay the tax at all; and the top
rate, a mere 7 per cent, reached only the very rich. It
wasn't until after World War II that most Americans paid
income taxes, but then the rates rose to their current
punishing levels. And in recent decades most states have
imposed income taxes too. Other taxes have also increased
at dizzying rates.
At nearly every step, the government has had its
way. Taxpayers have mounted only sporadic resistance, in
what are often called "tax revolts." The phrase is
significant. If our rulers are really our "servants," as
self-government implies, why are the wishes of the ruled
considered "revolts"? Can we "revolt" against our own
servants? Or have they really become our masters?
The question answers itself. We might also ask, At
what point does taxation become confiscation, theft, and
even involuntary servitude? Our rulers -- we may as well
say our masters -- never address this point. The Ruler of
the universe asks only 10 per cent of our wealth. Our
earthly rulers won't settle for such a modest share. They
consider us "greedy" for wanting to keep more of our own
money; they consider themselves "compassionate" for
wanting to take more of it -- 20 per cent, 40 per cent,
why not 80 per cent?
If the politicians had any respect for our rights,
our property, our liberty, even our dignity, they would
impose taxes only reluctantly, and they would acknowledge
some just limit. They would act as if the money they take
and spend is *our* money, to be used for the common good
of all, and not for buying the votes of special interests
and government dependents. In short, they would recognize
that taxation is a *moral* issue, not a mere political
convenience to be exercised arbitrarily and
irresponsibly.
I know of only one history of taxation, Charles
Adams's 1993 book FOR GOOD AND EVIL: THE IMPACT OF TAXES
ON THE COURSE OF CIVILIZATION. It's not a totally
satisfactory book; the writing is uneven, some of its
judgments are open to question, and the subject is far
too vast to cover in 530 pages. But it's about the only
book dealing with the topic for the general reader, and
it's full of fascinating information and anecdotes,
backed by a basic wisdom.
Adams isn't categorically against taxation. He
thinks there are "good" taxes as well as bad ones, and he
argues, for instance, that the Roman Empire fell because
it wasn't collecting taxes efficiently. He blames tax
evasion for its demise, but blames its policies for
fostering evasion.
Nevertheless, his narrative makes it hard to deny
that "organized plunder" has been the very lifeblood of
most states throughout history. In most times and places
taxation, like slavery, was simply taken for granted as
an inescapable fact of life; now and then there have been
tax revolts, just as there have been slave revolts; and
at times, especially since the Christian era, taxation
has been recognized as presenting serious moral problems.
Aside from the Roman Empire, Adams thinks states
have usually destroyed themselves through overtaxation.
Greed is almost the defining mark, not of the capitalist,
but of the state. Ingenious rulers have found a thousand
ways, from slavery to debasing money to tariffs to
exacting tribute, of appropriating others' wealth. At the
same time, they fail to foresee how their own oppression
will breed tax resistance.
Adams finds abundant records for this. In fact, many
important archeological discoveries have been of tax
inventories. The fabled Rosetta stone is essentially a
tax record. "A large percentage of all ancient documents
are tax records of one kind or another," he writes. "The
day may come when historians will recognize that tax
records tell the real story behind civilized life....
They are basic clues to the way a society behaves." After
reading his swift review of history, you can hardly doubt
it.
Taxation has always been big business, the biggest
business of government. Hebrew complaints about the
"oppression" of the Egyptian pharaohs seem to have been
chiefly about the taxes imposed on them, which often
amounted to, and were hard to separate from, slavery.
(The Egyptians were cruel taxers, even sending scribes
into every home to make sure people weren't preparing
their food with untaxed cooking oil!) Sometimes we hear
of taxation so casually that we hardly notice it, as in
the Gospel accounts of Joseph and Mary going to Bethlehem
to submit to a great Roman tax census.
As Adams sees it, history is largely the story of
men's constant efforts to get the wealth produced by
other men, with politics and the state as the main means
of acquisition. It's amazing that this ever-present
dimension has been so slighted in most history books. Men
have fought for power for many reasons, but the strongest
has always been their own enrichment. It's hardly too
much to say that the story of taxation is the story of
mankind.
Adams sees Old Testament history as the constant
struggle of the weak Jews against powerful predatory
neighbors, Egyptian, Babylonian, Persian, Assyrian,
Greek, and Roman. Losing a war, or avoiding one, meant
paying tribute. (We tend to read words like "tribute"
without grasping their concrete meaning.)
In the often deadly game of politics, tax exemptions
and immunities as well as taxes were key weapons.
Exemptions were irresistible privileges and definers of
social class; Islam owed much of its original appeal to
its offer of tax immunity to converts. This sufficed to
lure the great majority of Christians and Jews in the
Middle East, still heavily taxed by the dying Roman
Empire, to the Muslim faith. But in time, Muslim rulers,
having run out of taxable infidels, became eager taxers
of their own people, and Islam lost its zeal even in its
own domains. "Islam ceased to spread when converts were
not offered a tax break." Conversion had become a tax
"loophole" that worked only too well.
In the Middle Ages, struggles between Church and
state were usually over taxes and the authority to tax.
Stern moral limitations inhibited taxation, especially
new and "unheard of" taxes ("exactio inaudita"). Rulers
who raised taxes were widely regarded as wicked tyrants
who "incurred sin and would be punished by God." But
churchmen sometimes had greater taxing powers than
secular rulers.
Like Rome, argues Adams, the mighty Spanish Empire
finally broke down because it taxed too many too much and
was unable to enforce its demands on a resentful
population. But one of his most original chapters says
that Aztec Mexico fell to the tiny forces of Cortes
because of its own short-sighted greed in taxing its
provinces.
Adams likewise sees taxation, not chattel slavery,
as the issue that precipitated the American War Between
the States. His sharp reading of Lincoln's first
inaugural address confirms this. (He has developed the
argument further in another book.)
Only one country, as Adams tells it, has gotten it
right: Switzerland. The Swiss have kept their government
under control pretty well, in great part because they
have had the wisdom to keep the taxing power and the
spending power under separate agencies. He says this
practice also preserved English liberty for a long time,
but the vaunted American constitutional separation of
powers overlooked this crucial distinction. The U.S.
Congress taxes *and* spends. So we lack checks and
balances where we most need them. Moreover, the Swiss
federal government can't raise taxes without a popular
majority, which is usually denied. The Swiss taxpayer,
unlike the American, has learned to defend himself.
According to Adams, America's downfall may come
gradually through its failure to control and limit the
taxing power. A nominally "federal" system is in vain
when the spending and taxing powers are combined and
centralized. It's at least a provocative idea; but if his
book teaches anything, it's that Swiss wisdom isn't
contagious.
A version of this piece was presented as a
speech to the Oklahoma Council of Public
Affairs (www.ocpathink.org) in September 2003.
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