Income Tax and the Theft of the Our Love of Freedom

The Sixteenth Amendment to the Constitution of the United States: The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.

During the Civil War, the first direct tax on income was instituted under President Lincoln's tenure. In 1890, it was begun again. The courts then deemed the policy unconstitutional, which led to the passage of the sixteenth amendment. Since then, high income tax rates helped the United States through both world wars. The rates dropped below 50% only in the late twenties, before rising to unprecedented rates as Franklin Delano Roosevelt took office, ultimately reaching a high of 94% for top bracket income-earners in 1944 and 45. This rate was never lower than 70% until 1982, and since then it has dropped steadily so that today, the very richest in the United States are required to pay only 35% of their income to the federal government.

All these rates, of course, don't take into account the legion of exceptions, loopholes and deductions that apply to income taxes. In the past, however, these focused on families and business incentives for providing benefits to their workers. Now, one could hardly find an application for the word "focus."
Let's look at another decrease in the United States over the last few decades: the decrease of income equality. In the Organization for Economic Cooperation and Development (OECD), a group of thirty developed and developing nations that all promote democracy and free market economics, the United States has the third highest income inequality and poverty levels, only lower than Mexico and Turkey. The Gini coefficient measures wealth distribution: a coefficient of one signifies that a single individual holds all wealth; zero means that each individual has exactly the same amount of wealth. In 1929, the coefficient in the United States is estimated to have been .45. After FDR and up to 1970, the number stayed below .4. In 2006, it was .47 - the highest ever recorded.

The distribution of earnings in the United States has widened by 20% since the mid-1980's. In the OECD, the average amount of government spending on social programs - as a percentage of GDP - is 22%. In the United States it is 9%. The OECD further reports that government redistribution of income in the United States plays a minor role compared to the other nations of the organization; it has lower social mobility, and there is also this telling fact: In the United States, the richest 10% of the population controls 71% of the nation's net worth. The richest 10%, however, only receive 28% of the income. This statistic shows how important capital is in capitalism, and this in turn further emphasizes how truly wrong a system it is.

Wealth creates wealth; the richer you are, the richer you can become. This is a simple truth we see all the time: millionaires use their millions to get millions more; the poorest can hardly save money at all, and the growth of any such capital will be slow going - portions scraped off bit by bit from piddling paychecks - not quick returns from major investments. The virtue of being born of a wealthy family immediately provides one with substantial support and opportunity, whereas a poor background will leave one with a narrow road to financial success. Think of it - everything from nutrition to medical bills to education costs - every moment another where the few and the priveliged are set up to gather even more riches while the poor try to keep down jobs, pay bills, raise families and somehow come out even with the system.


There is no inherent superiority in a top CEO compared to one of his building's janitors. In the crapshoot of capitalism, the CEO has simply had more opportunity to advance themselves by the whim of the distribution of fortune and capital. Had the two had equal opportunity - equal freedom to better themselves - who knows where each would have ended up. This is where our minds have been warped. Somehow, people in this nation have been lead to believe that there is a freedom inherent in keeping government from appropriating personal wealth. Freedom has nothing to do with ownership. Freedom has to do with opportunity - it's what you can do with your life, how you can grow, how you can change the world. Unfortunately, the extent to which you can do things with your life is largely connected with how wealthy you are: think of all the possibilities the wealthy have before them - doing anything, being anything. Without wealth, you are strapped into the wage slavery of survival.

Many Americans are wrapped up in the idea that there is innate opportunity in this country - that any American dream can be fulfilled if one just works hard enough for it. Sadly enough, this is no reality. What if the people's representation - it's government - worked as other governments of the world do? What if it actually worked in order to better provide equal opportunity for all Americans? When you think of freedom being curtailed in this country, don't think of tax rates being raised on the wealthy. Think of all those who struggle in life because the rich bastards won't share the wealth.