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    Taxation in the Constitution
    Competing Arguments
      Pay Less Taxes
      Pay More Taxes
      Pay No Taxes
    Candidates' Positions on Taxes

Tax is essentially the collection of a predetermined amount of revenue-share by a central authority (or its agents) from the total revenue generated by its participating members (individually or organizationally).

Taxes are collected from several points of revenue (or potential revenue), which includes:
  • Individual Wages
  • Company Profits
  • Capital Gains
  • Fees
  • Tariffs
  • Duties
  • Excise Taxes
  • Special Taxes
  • Special Incomes

Prior to the introduction of modern currencies, taxes were collected in various forms, which include, but are not limited to, agricultural products, livestock, precious stones, virginal maidens and firstborns. The practice of taxation has been in existence since the concept of a 'society' was invented in the Indus Valley a dozen millennia ago. In fact, for all the abhorrence most of us have felt and continue to feel towards taxes, it has featured prominently throughout our recorded history; the three major forms of societies that humanity has created - tribal, feudal and social/political nations - taxation plays an integral part in its construct.

And contrary to popular belief, taxation did not begin in the United States in 1913. In fact, direct federal income taxes first came into being on August 5, 1861, through the Revenue Act of 1861 (Section 49, Chapter 45, 12 Statute 292, 309). However, an even earlier form of taxation which indirectly taxed Americans came in the form of import tariffs, courtesy of the Tariff Act of 1789 (the Hamilton Tariff).

It appears that Benjamin Franklin was right after all.

"Our new Constitution is now established, and has an appearance that promises permanency; but in this world, nothing can be said to be certain, except death and taxes."

Benjamin Franklin, November 13, 1789; excerpts from a letter written to Jean Baptiste Le Roy (1720-1800, a French scientist, inventor, and Director of the Academie royale des Sciences de l'Institut de France)

Taxation in the Constitution
Article 1, Section 2, Clause 3:

"Representatives and direct taxes shall be apportioned among the several States which may be included within this Union, according to their respective Numbers, which shall be determined...

Article I, Section 8, Clause 1:

"The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States."

Article I, Section 9, Clause 4:

"No capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken."
(Subsequently refined by the 16th Amendment)

Sixteenth Amendment

"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."
(Ratified on February 3, 1913)

Competing Arguments

Pay Less Taxes
The position of tax cuts advocates is perhaps best argued using the Laffer Curve, named after famed conservative political scientist/economist, Arthur B. Laffer.

Laffer postulates that tax cuts would increase the potential for new business activities, job growth, and consequently, federal tax revenue. His theory contends that just as a 0% taxation rate generates no tax revenue for the federal government, increasing the rates will eventually reach a point of diminishing returns where businesses and high net worth individuals would be disincentivized from participating in any taxable economic activities, and instead, turn to better yields from capital gains returns and dividend incomes.

In addition, it is morally wrong for the federal government to take between a quarter and a third of the incomes of businesses and high net worth individuals to subsidize middle-class tax cuts. cuts. By unilaterally punishing the wealthy, it creates a culture of entitlement, discourages entrepreneurship, and encourages the federal government to continue with their incompetent, wasteful and ultimately, harmful spending habits.

It also goes against the principles of liberty and small government that many believe are the cornerstone of our republic.

Pay More Taxes
Advocates of a progressive taxation system argue that low tax rates will inevitably concentrate capital in the hands of 'old money', speculators and wealthy corporations, who would have no incentive to risk their capital in the open market, even as the economic pie progressively becomes smaller. Capital gains income, stock dividends, and property rental provide a safe harbor for these individuals and corporations.

Progressive taxation forces liquidity into the economy through the federal government, which in turn facilitates entrepreneurship, innovation and growth, while allowing a fairer distribution of the economic pie. Instead of depositing their capital in Wall Street, these businesses and high net worth individuals would direct their capital towards business and infrastructural spending.

Advocates further argue that tax cuts have never meaningfully spurred growth through trickle-down economics, and the two lowest period of tax rates this century coincided with its two worst economic depression - the Great Depression of the 1930s and 2007-2009. On the other hand, periods of high taxation were followed by the greatest periods of economic growth and job creation.

In addition, there is an argument to be made that corporations and higher net worth individuals consume a higher percentile of the nation's infrastructure and resources. Multi-billion dollar public infrastructures such as airports, highways, and an army of civil servants, benefit Americans in higher tax brackets at a proportionately higher level, and thus, a progressive tax rate is the only fair method of taxation.

The federal government is also obligated to continue producing the nation's most crucial economic asset: a healthy, educated, and sufficiently motivated workforce.

Pay No Taxes
Opponents of taxation believe that it is an immoral, illegitimate and unconstitutional act that goes against natural law. Although the debate over the immorality of taxation has been around for centuries, the most prominent and influential modern thinker on the subject is the anarchist, Lysander Spooner (1808-1887). His philosophy was latched and expanded upon by several 20th century philosophers, most notably, Robert Nozick (1938-2002) and Murray Rothbard (1926-1995). The thoughts of both men have subsequently shaped and molded the contemporary conservative libertarian dogma on the subject.

Nozick, in his powerful Anarchy, State and Utopia, believes that a socio-political entity could conceivably evolve into existence from anarchy, and shelter a voluntary group of clients (citizens and organizations). The clients within the entity could feasibly pay a voluntary fee (tax) to a mutually agreed-upon agency (government) to protect themselves from internal or external threats of force, fraud, and theft (and contract enforcements), and in the process, see to the logical creation of a minarchist state.

Such a scenario could justify the payment of the said tax, but anything more than that is immoral and a perversion of nature. The act of taxing a human to pay for the expenses of another is inconsistent with ideals of self-ownership and free will. Since your production is generated from your own labor, the act of taxation is essentially forced labor.

Rothbard took his argument a step further, in that, taxation is, for all intents and purposes, robbery. Both can be simplified to the same basic principles - using force or the threat of force to take a share of the revenue generated by your labor.

Both men fundamentally agree that taxation is no better than slavery.

There have been renaissance in recent years on this very subject among latter-day Libertarians, but as of now, the Sixteenth Amendment precludes any real possibility of this ever becoming a reality.

Tax Rate Statistics

Candidates' Positions on Taxes

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