17 April 2006    |    PatriotPost.US    |    Patriot No. 06-16

THE FOUNDATION

"To take from one, because it is thought his own industry and that of his fathers has acquired too much, in order to spare to others, who, or whose fathers, have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, the guarantee to everyone the free exercise of his industry and the fruits acquired by it." —Thomas Jefferson

PUBLISHER'S NOTE

Your taxes are due today—like we need remind you. On this day in history, the unsinkable Titanic sank in the North Atlantic. The year was 1912. A year later, the Sixteenth Amendment to our Constitution was, allegedly, ratified by the states, and it would become the basis for levying a direct income tax on U.S. citizens. It was not an iceberg, but the "unsinkable" U.S. economy is swamped with taxes.

Please sign The Patriot's petition for a Balanced Budget Amendment.

The Patriot obtains research on taxation from many sources, but the best single source on taxation is The Heritage Foundation. Our colleague Dan Mitchell writes that politicians are "spending taxpayer money like drunken sailors," and "it's difficult to improve the tax code when government spending is growing three times faster than inflation." He has written a good essay on fixing the tax code.

About $8,000 on Social Security and Medicare; $4,700 on defense; $3,600 on programs for the poor; nearly $2,000 on interest payments: These are the major items on which the government will spend the $20,044 that it collects per household, on average. Is your family getting its money's worth for all that spending? See Brian Riedl's breakdown of where your taxes are being spent.

There are three other organizations which provide good data on tax issues. The National Taxpayers Union is dedicated to lower taxes, reduced spending, and the principles of rational and limited government. NTU is a primary advocate for a bipartisan Balanced Budget Amendment. Americans for Tax Reform opposes all tax increases as a matter of principle and advocates a tax system that is simpler, fairer, flatter and more visible. ATR has also sponsored the Taxpayer Protection Pledge (federal and state) since 1986. The Tax Foundation calculates Tax Freedom Day, noting that in 2006, Americans will work 77 days to afford their federal taxes and 39 more days to afford state and local taxes. That makes taxation a bigger financial burden than housing and household operation (62 days), health and medical care (52 days), food (30 days), transportation (30 days), recreation (22 days), or clothing and accessories (14 days).

INSIGHT

"The collection of taxes which are not absolutely required, which do not beyond reasonable doubt contribute to the public welfare, is only a species of legalized larceny. The wise and correct course to follow in taxation is not to destroy those who have already secured success, but to create conditions under which everyone will have a better chance to be successful." —Calvin Coolidge

 

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IChThUS IMPRIMIS

"The moment the idea is admitted into society that property is not as sacred as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence. If 'Thou shalt not covet' and 'Thou shalt not steal' were not commandments of Heaven, they must be made inviolable precepts in every society before it can be civilized or made free." —John Adams

TAX HISTORY

"Throughout most of American history, taxes were levied principally on consumption, rather than income... In the Federalist Papers, Alexander Hamilton had this to say, 'It is a signal advantage of taxes on articles of consumption that they contain in their own nature a security against excess... If duties are too high, they lessen the consumption; the collection is eluded; and the product to the Treasury is not so great as when they are confined within proper and moderate bounds.' Hamilton was thinking here about direct taxes on consumption, such as the sales taxes levied by most state governments. He was right in thinking that there is a limit to such taxes. Experience shows that general sales tax rates much above 10 percent are very hard to collect. They encourage smuggling, black markets, evasion, production for personal use, substitution for untaxed commodities and other activities that erode the tax base." —Bruce Bartlett

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CULTURE

"Liberals love to divide us by economic class, and discuss policies in terms of which class will benefit or suffer by their passage. The problem is that class is a moving target. What are the magical income levels that define poor, middle, and rich? Further, Democrats assume that no one has the ability to rise above the economic situation into which they were born. People climb up the income ladder everyday when they work at it." —Herman Cain

LIBERTY

A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, followed always by a dictatorship. The average age of the world's greatest civilizations has been 200 years. —Alexander Fraser Tytler

THE GIPPER

"Extreme taxation, excessive controls, oppressive government competition with business...frustrated minorities and forgotten Americans are not the products of free enterprise. They are the residue of centralized bureaucracy, of government by a self-anointed elite." —Ronald Reagan

GOVERNMENT

"But I am of the opinion that a centralized administration is fit only to enervate the nations in which it exists, by incessantly diminishing their local spirit. Although such an administration can bring together at a given moment, on a given point, all the disposable resources of a people, it injures the renewal of those resources." —Alexis de Tocqueville

RE: THE LEFT

"The latest jobless rate—4.7 percent—is at a five-year low. Yet, despite this and other good economic news, the Left is frantic to repeal the Bush administration's tax cuts. In fact, even if every single economic indicator were better than at any time in American history, the Left would still want to repeal the tax cuts. The reason is that the essence of the Left is ever bigger government for the purpose of controlling ever more of the economic and social life of society. That America is so much more economically efficient than the major socialist countries of Europe, such as France and Germany, is of no concern to Democrats and others on the Left... [L]iberals want high taxes not in order to improve the economy, but in order to expand government and reduce economic inequality. Therefore, the obvious economic benefits of lower taxes do not much interest liberals... One wonders if ever before in history such a large number of people had such a clear view of the consequences of their policies, and despite the failure of those policies, continued to devote their lives to enacting them. And the Left thinks religious Americans are irrational. That is why the language of liberal condemnation of tax cuts is that they are 'tax cuts for the rich' rather than that they are 'bad for the economy.' It is resentment of the wealthier—and most productive—sector of America that animates liberal opposition to tax cuts, not concern about unemployment... [T]hose on the left need to cheer the unemployment data. But they can't do that until they love the low unemployment figures even more than they hate George Bush and his tax cuts." —Dennis Prager

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POLITICAL FUTURES

"The 15 percent tax rate for individual capital gains has been a stunning policy success since it went into action in 2003, so why is the corporate capital-gains tax rate still a whopping 35 percent? The empirically proven arguments for low capital-gains tax rates apply at least as well for corporations as they do for individuals; it is time to slash the corporate cap-gains tax rate... Cutting the cap-gains tax is the ultimate supply-side win-win. While the corporate cap-gains tax is idling, the individual cap-gains tax is headed in the wrong direction—under current law a hike is scheduled to occur in less than three years. Both of these situations amount to public-policy malpractice. Congress should act immediately to establish a permanent 15 percent cap-gains tax rate for both individuals and corporations, a win-win policy that will promote economic growth and prosperity while at the same increasing federal revenue." —Phil Kerpen

FOR THE RECORD

A rising tide lifts all boats!

(John F. Kennedy addressing the Economic Club of New York, 14 December 1962)

"I know you share my conviction that proud as we are of its progress, this nation's economy can and must do even better than it has done in the last five years. Our choice, therefore, boils down to one of doing nothing and thereby risking a widening gap between our actual and potential growth... or taking action at the federal level to raise our entire economy to a new and higher level of business activity...

"The most direct and significant kind of federal action aiding economic growth is to make possible an increase in private consumption and investment demand—to cut the fetters which hold back private spending. In the past, this could be done... by increasing federal expenditures more rapidly than necessary—but such a course would soon demoralize both the government and our economy. If government is to retain the confidence of the people, it must not spend more than can be justified on grounds of national need or spent with maximum efficiency, and I shall say more on this in a moment.

"The final and best means of strengthening demand among consumers and business is to reduce the burden on private income and the deterrents to private initiative which are imposed by our present tax system—and this administration pledged itself last summer to an across-the-board, top to bottom cut in personal and corporate income taxes...

"I am not talking about a 'quickie' or temporary tax cut. Nor am I talking about giving the economy a mere shot in the arm, to ease some temporary complaint. I am talking about the accumulated evidence of the last five years that our present tax system... exerts too heavy a drag on growth in peacetime—that it siphons out of the private economy too large a share of personal and business purchasing power—that it reduces the financial incentives for personal effort, investment and risk taking.

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"[We should reduce taxes] by a sufficiently early date and a sufficiently large amount to do the job required. Early action could give us extra leverage, added results and important insurance against recession. Too large a tax cut, of course, could result in inflation and insufficient future revenues—but the greater danger is a tax cut too little or too late to be effective.

"I do not underestimate the obstacles which the Congress will face in enacting such legislation. No one will be satisfied. Everyone will have his own approach, his own bill, his own reductions. A high order of restraint and determination will be required if the possible is not to wait on the perfect.

"This nation can afford to reduce taxes... but we cannot afford to do nothing. For on the strength of our free economy rests the hope of all free nations."

SELECT READER COMMENTS

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"Thank you for the significant exposition of the Easter story in Patriot No. 06-15: Resurrection Day 2006—Hidden Liberty. Such an offer of a radically new way of living empowered by a single source needs to be published to all who will read and heed! I joyously attest to its validity. Praise God that we live in a country where you can write an article with such conviction, I can read it with the same conviction, and neither of us will be persecuted for it. Pray that that will ever be true." —Houston, Texas

"There are a growing number of us who believe that service to mammon has had the effect of religious orders 'kowtowing' to government. Do we care so much now for a tax deduction that we are afraid to speak the truth in church for fear of its loss? You state, 'What about the tax-exempt status, or free-speech protections, of religious institutions that advance teachings contrary to the new regime?' I say, damn the deduction, full speed ahead. Speak the truth in love and speak it loudly, care not for the gracious gift of tax deduction by your master, the state. For those who do, let its 'jack boot' rest upon your neck, but 'as for me and my house, we will serve the Lord'." —Baltimore, Maryland

Editor's Reply: Indeed, tailoring speech to protect tax status suggests one's master is the government. We not only support tax exemption for Churches, but would take that one step further and support full First Amendment Rights for Churches. One more constitutional constructionist on the High Court, and a test case would turn the suppression of free speech in places of worship on its ear. If a pastor wants to preach about the politics of abortion or homosexuality, for example, let him do just that. The Pope regularly chastises Catholic politicians for supporting positions, which do not comport with church teachings—without fear for his church exemption. Maybe what we need is a little more courage in Protestant pulpits and pews!

"Your insight into the glories of our salvation in Christ through faith and that alone, not of ourselves, but a gift from God, is indeed refreshing. Our rest is in His finished work on Calvary, leaving us free to embrace the steps that He has foreordained for us: transforming our world through spiritual, moral, family, perseverance, integrity, work ethic, honest business and government, all for the greater glory of God and His Christ!!" —Boston, Massachusetts

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THE LAST WORD

"I don't mind paying taxes for a civilized society. It's paying for the uncivilized part that grates on me. And I'm happy for the existence of our government, but, goodness, why does its existence have to be so big? Here is a telling quotation from Frederick the Great, an 18th-century Prussian king: 'No government can exist without taxation. This money must necessarily be levied on the people; and the grand art consists of levying so as not to oppress.' Yes, Freddy, levying without oppressing is a grand art—much the way it is an art for a loan shark, while collecting interest, to break all five fingers without harming the wrist... Our tax code is the hardest thing in the world to understand. It was made that way because our representatives, seeking favor and dough, slipped in gobs of loopholes for their buddies. Our government calls this 'tax reform,' and it is the reason our tax code now runs, according to the Cato Institute, 61,000 pages in length and takes the average American nearly 30 hours to comply with." —Tom Purcell

Lex et Libertas—Semper Vigilo, Paratus, et Fidelis! Mark Alexander, Publisher, for the editors and staff. (Please pray for our Patriot Armed Forces standing in harm's way around the world in defense of our liberty, and for the families awaiting their safe return.)