THE INCOME TAX ABOMINATION
by John Q. Pridger

Nobody likes income tax, and Pridger is a typical American when it comes to this sentiment. Income tax is unconstitutional on its face – except than Congress did go the extra mile in 1913 – to make it constitutional by a constitutional amendment.

The reason it is unconstitutional isn't simply because the income tax amendment may not have been properly ratified (which is the contention of a lot of tax protesters), but because it did two major things that fly in the face of the "original intent" of the founders. Those two things are (1) That the United States government was to be a "limited" government, by consent of the governed, and (2) That "income" has come to mean "the wages of labor."

In the first instance, it is pretty clear that an income tax that taxes labor (i.e., all gainfully employed people in the nation), is incompatible with any concept of limited government. Limited government, by consent of the governed, was effectively repealed by the income tax amendment. Congress did not have a constitutional right, or a moral right, to do that. Of course, the sales point that carried the day in the halls of Congress was the notion that the income tax would only impact the rich. There would have been revolution in the streets, and even the brain trust in Washington would have balked, had anybody suspected that labor would end up paying a tax on the sweat if its brow.

A government that literally has its hands in the pocket of every citizen is, by definition, and unlimited government. And unlimited government was not what the Constitution of the United States was about. Unlimited government is, by definition, and inevitably a tyranny.

In the second instance, "income" has come to mean wages earned by the sweat of the brow of labor, and the tax code has been fashioned to accommodate the rich and powerful who profit from labor and always have the ear of Congress. "Income" is, or should be construed, as "unearned income," i.e., "profits" above what might be considered a "fair wage" for labor. There is no "profit" income in labor, unless labor is rewarded out of all reasonable proportion to its physical input in time and work. To the average person working for wages, those wages are an even exchange or "trade" in the marketplace. So many dollars for so many hours of work. Tax on an even exchange is tyranny, and would be considered impossible in a reasonable system.

To demonstrate, imagine tendering a ten dollar bill for two fives, and being taxed on the transaction. It would be ludicrous. Imagine trading a toaster for a mixer – both being worth the same thing to both parties, except they have decided to barter one for the other. One party has bought a mixer with a toaster, and the other has bought a toaster with a mixer.

The wages of labor are no different. The employer pays labor for his time and work. The employer has purchased work from the employee, and the worker has bought an hour's worth of money from the employer with his labor. The idea that a taxable transaction has taken place is as ludicrous as in the case of purchasing two fives for a ten.

But, we've got used to being taxed on our labor. It happened by both jumps and stealth. The jumps came in the name of war and national emergency – but the "fiscal" emergency never goes away. The stealth is the slower processes of monetary inflation and tax "bracket creep." We have been like the poor frog placed in a pan of water. He was perfectly comfortable in the pan of cold water. He didn't notice when the fire was lighted under the pan – the water was still cool. As the water began to warm, he felt even more comfortable. In time he became uncomfortably warm. Then, without ever realizing what had happened, he was a boiled frog.

We're in the uncomfortably warm stage at present. – taxed not only on our income, but just about everything we do. Taxes have not become prohibitive. Double digit inflation was the big fire of the seventies, propelling workers into serious tax brackets. Inflation cooled off during the Reagan administration, and the fire under the pan is intentionally kept low.

Many of us have developed a philosophical way of looking at the income tax. We like the warmth taxation seems to bring – the security and benefits, and the satisfaction that comes to us knowing that we're paying our fair share. We have the feeling that government will take care of us. The way Pridger looks at it is that he simply doesn't make the wages that have been taxed away. The $20.00 an hour job actually only pays $15.00 an hour, and that's okay if Pridger can live comfortably on $15.00 an hour.

What really disturbs him is not so much the amount he pays (though he figures that he shouldn't have to pay it), but that at the end of the year he has to file an income tax return in order to determine whether or not he has paid too much or too little in taxes. Of course, he doesn't have to file – it's strictly a "voluntary" act. But if he doesn't file, he can expect future trouble.

Not filing means one of two things. He's either overpaid his taxes and made the government a gift of some of the money he's earned, or he's cheated the government and might at some future date have to pay up with additional interest and penalties. Either way, the tax bureaucrats will get suspicious and be out for blood.

What is so frustrating is that Congress has taken what could be a relatively simple system of a graduated income tax system and built an Internal Revenue Code that is so complicated and ponderous that just trying to figure out how much income tax is owed is almost impossible. Most people probably over-pay.

John Q. Pridger
Tax Day, Every Year