Tuesday, September 6, 2011

"How, by the way, did we ever let ourselves..."

"How, by the way, did we ever let ourselves be talked into such a thing?  The income tax was first proposed for several reasons.  The tariff, from which the federal government received most of its funding, was for a variety of reasons bringing in a decreased revenue.  At the same time, federal expenditures were going up, thanks in part to an increase in the military budget. 

An alternative had to be found.  At the time, many Americans viewed the tariff as an unfair tax that burdened them as consumers and benefited big business by sheltering it from foreign competition.  A tax on incomes, the argument went, would at last force the rich to pay their share.  And that's just how the income tax was pitched to the people: tax relief for you, in the form of lower tariffs, and a tax increase for the rich.  Do not worry, people were told.  Only the richest of the rich will ever pay the income tax.

That phony promise didn't last long.  Within a few years, tax rates had shot through the roof, and classes of people who had thought they would never be taxed found themselves paying as well.  And by the 1920s the tariff was raised again anyway, so the people wound up getting the worst of both worlds." -Page 80 of The Revolution, A Manifesto

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