What do we mean when we use the word "progressive: with taxes. It is generally understood that the more you make, the more taxes that you pay. This definition is inadequate, because under a flat tax system, if you made more, you would pay more than someone who made less. What we have are a series of steps that increase at arbitrary levels. So, up to a certain level, you pay 10%, then 15% and so on to a maximum rate of 35% for the top earners. Now the $64,000 question: Why?
If the purpose of taxes is to fund the necessary organs of government, why do we have a graduated tax rate? You could do the same thing with a flat tax. Remove all of the deductions, and charge everyone the same 22.5% of all income, and you could fund the government at nearly the same rate that it is today. The advantage to this method is that everyone would have a stake in the efficiency of the government, because everyone would be paying the same rate. Wouldn't matter if you were working as a burger flipper or were the CEO of a corporation, everyone would bear the same burden.
Tie this in with "Tax Freedom Day," the day when you stop working to pay taxes, and start working to provide for your basic needs, and a chance to get ahead and make something more with your life. For all tax payers, it would come on the same day. At 22.5%, assuming 2000 hours per year of work, that time would come at 450 hours, or roughly eleven and a 1\4 weeks, sometime near the end of March, in other words. Everything else for the remainder of the year would be yours, except for those taxes for the state and local governments of course.
But some taxpayers pay nothing in federal income tax (yes, I know that Social Security is a tax, but we are talking about income tax, not payroll tax, so please stick to the topic at hand, we can discuss the morality of the payroll tax at a later date), so their tax freedom day is January 1st. If you throw in the Earned Income Tax Credit, they could almost say that their Tax Freedom Day was sometime in the previous December. For those paying at the 10% rate, their tax freedom day would come at 200 hours, or sometime in the beginning of February. This pattern would continue until the 35% rate, where their federal income tax "Freedom Day" would come at 700 hours, or right around the Middle of May. Obama's plan would push this out to 900 hours, the middle of June. So, the upshot is that if you are in the highest tax rate, you will slave for the government for nearly half of every year.
Which leads me to the third element of the title, the 13th Amendment to the Constitution, which says:
Section 1. Neither slavery nor involuntary servitude, except as a punishment for crime where of the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.Why do I bring this in? Think about it, everyone of us is considered to be equal before the law. But when it comes to involuntary servitude, some are more equal than others. Ah, you say, but you don't have to make that much money, and therefore, you would have less involuntary servitude. But wouldn't that just promote and reward sloth and laziness? If you are talented, intelligent and hard working, wouldn't the present scheme make it counterproductive to fully maximize your talents, intelligence and hard work? By doing so, aren't you depriving the general society of new inventions, procedures or techniques that could be generally beneficial as a whole?
Section 2. Congress shall have the power to enforce this article by appropriate legislation.
But working is not the same as involuntary servitude is it? No, not if we all shared the same burden. But under the present and proposed tax schemes, if you have to work twice as long to pay your tax burden as someone else, is that not involuntary servitude? Sure, no one is making you work hard, but the fact that you have to work longer to begin earning anything for yourself is not much better than working as a sharecropper.
And think about not paying your taxes and what would happen. While in the days of slavery, the overseer with his dogs chasing you through the swamps was certainly terrifying, is it that much less terrifying to receive the letter from the IRS saying that you were being audited? And while the overseer had no legal constrictions on what to do to an escaped slave, if the slave made it to a free state, until Dred Scott, many states would offer sanctuary. Today, we have the IRS with their investigators, prosecutors, judges, courts and jails, so I suppose it is marginally better. Although the end result of a captured slave, or a tax resister is going to be the end of their freedom. If you don't think that the IRS is fully capable of using every form of legal coercion available to it, you have never had to deal with them, have you?
The framers of the Constitution recognized that the right to property was an essential element to the development of the human condition. As a result of that cognizance, they prohibited income taxes, which only came about after the introduction of the XVIth Amendment. The fear of the framers was that if the general populace could vote themselves largesse from the treasury, there would no longer be any reason to have and hold private property, since the government could simply take it from you to satisfy the populist braying of those who have less.
Seems that that day has arrived.
UPDATE: This is illuminating: