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Back to the Beginning - In our tax code, we've lost the Founding vision.
NRO ^ | July 3, 2002 | Eric V. Schlecht

Posted on 07/03/2002 10:42:55 AM PDT by gubamyster

July 3, 2002, 8:45 a.m.

By Eric V. Schlecht

It's 4th of July week and Americans all across the country are celebrating our independence from Britain, the Founding Fathers, and their vision of democracy and limited government. If the Founders were alive today, however, it's doubtful that they would recognize, or approve of, the scope and size of the federal government. The utter disregard for the 10th Amendment to the Constitution and the ratification of the 16th Amendment are largely to blame for this phenomenon.

Judging by their writings, and the Constitution they crafted, it's fairly clear the Founding Fathers wanted a limited federal government. As George Washington noted, "The habits of thinking in a free country should inspire caution in those entrusted with its administration to confine themselves within their respective constitutional spheres…" While Thomas Jefferson once observed, "My reading of history convinces me that most bad government results from too much government."

The Fathers ingrained this thinking into our Constitution. In fact, Article I of the U.S. Constitution limits the federal government to 17 specific powers — such as coining money, maintaining armed forces, and facilitating commerce through patent and bankruptcy regulation. The 10th Amendment reaffirmed that "the powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States, respectively, or the people." This principle, the "Enumerated Powers Doctrine," guided the scope and size of the federal government until the 1930s, when court decisions centered around the New Deal eroded its effectiveness.

The 10th Amendment was meant to check the powers and scope of the federal government, limiting it to the modest duties outlined in the Enumerated Powers. Unfortunately for the Founders and taxpayers, modern-day courts have invented laughable loopholes in the 10th Amendment. They've applied the Commerce Clause (which asserts federal primacy over interstate finances) to any and all types of federal spending while simultaneously applying the Equal Protection clause and other parts of the Constitution to claim a bigger role for Washington.

But what if the federal courts actually upheld the 10th Amendment? What would our federal government look like? In an effort to answer this question, I conducted a study for the National Taxpayers Union (NTU) listing what we believe to be the federal spending consistent with the Enumerated Powers of the Constitution. Below is a listing of the generic area of spending, its function number in the federal budget, and the amount the government spent in that area in Fiscal Year 2001:

Area of Spending Function # Dollars (in billions)

National Defense 50 308.5
International Affairs 150 16.6
Bureau of Indian Affairs 300 1.9
Advancement of Commerce 370 6.2
Postal Service 372 2.4
Transportation 400 33.9
Federal Pensions 600 54.3
Veterans Benefits 700 45.8
Administrative Justice 750 30.4
General Government 800 10.2

Total Federal Spending Under Constitution in FY 01 $510.2 Billion (73% reduction in current spending)

Total Spending Plus Net Interest Payments of Current Debt $716.3 Billion (62% reduction in current spending)

Total Amount Government Actually Spent in FY 01 $1.86 Trillion

Includes only capital spending on federal highway outlays, and air and water transportation spending.

Number reduced by approximately 1/3 to reflect the fewer number of federal employees were the federal government to limit its spending priorities to the above programs and department.

About the same time the federal government began ignoring the 10th Amendment, it passed the 16th Amendment to the Constitution. Adopted by Congress on July 12, 1909 and ratified in February of 1913, it fundamentally transformed the balance of power between the federal government and the people. Prior to its ratification, federal income taxes had been declared unconstitutional because Article I, Section 9 of the Constitution clearly states that no direct tax "shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken."

In other words, the Founding Fathers didn't want a federal income tax. They realized that granting the federal government the gift of income taxation would give it the means to extend all of its powers far beyond what they had envisioned, and with disastrous consequences.

At first, the threat to most seemed small. The original income tax passed by Congress applied to just two percent of the labor force and the top marginal rate was a fairly reasonable seven percent. But that soon changed. In 1916, the federal government collected approximately $68 million in individual income taxes. However, Washington's hunger for more revenue soon became voracious. By 1929, federal income-tax revenues had grown to nearly $1.1 billion. This year the personal income tax will rake in about $950 billion.

It didn't take Washington long to realize that its new-found wealth gave it the opportunity to expand its power and influence through the growth of government. Elected officials began expanding the role of the federal government almost immediately. As a result, legislative activity in Congress began to skyrocket. For example, between April of 1911 and March of 1913, Congress passed a total of 457 acts. Less than two decades later, that number had exploded. Between December of 1927 and March of 1929, a total of 1,037 acts were passed by Congress.

The predictable, and unfortunate, result of Washington's new activist persona was a dramatic increase in federal spending. For example, in 1913 the federal government spent a total of $714 million. By 1929, the feds were spending more than $3.1 billion a year. Meanwhile, the number of federal employees grew from 396,494 in 1913 to 601,319 by 1930. Federal employment ballooned to 1,042,420 persons by 1940 following FDR's implementation of the New Deal, and to nearly 3 million persons by 1970 after Johnson imposed his Great Society.

Last year the federal government collected $1.99 trillion in total receipts, had $1.86 trillion in total outlays, employed nearly 3 million people and involved itself in every issue in America from A to Z.

There are many reasons to celebrate our nation's birthday this year, but adherence to the Founders' vision of a limited federal government is not one of them, and that's too bad.

— Eric V. Schlecht is director of congressional relations for the National Taxpayers Union.


TOPICS: Editorial; Government; News/Current Events
KEYWORDS: taxes; taxreform
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1 posted on 07/03/2002 10:42:55 AM PDT by gubamyster
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To: gubamyster
In our tax code, we've lost the Founding vision.

No!!!!

2 posted on 07/03/2002 10:47:50 AM PDT by 69ConvertibleFirebird
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To: gubamyster
People could vote out the income tax anytime they wish. They simply choose not to.
3 posted on 07/03/2002 10:53:23 AM PDT by A Ruckus of Dogs
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To: *Taxreform
Index Bump
4 posted on 07/03/2002 10:53:28 AM PDT by Free the USA
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To: A Ruckus of Dogs
We've long since hit the point where our form of government doesn't work as designed because it has become a bank for doling out money to special interest groups and redistributing income. People vote to influence the way the money is distributed not to reduce the government's ability to redistribute it.
5 posted on 07/03/2002 11:01:45 AM PDT by johniegrad
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To: A Ruckus of Dogs
"People could vote out the income tax anytime they wish. They simply choose not to."

I have never seen the income tax come up on any ballot. It would take a repeal of the 16th Amendment to eliminate the Income Tax, and I don't think ANY of our elected officials are going to do anything to allow that to happen.

6 posted on 07/03/2002 11:14:43 AM PDT by dixierat22
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To: dixierat22
I have never seen the income tax come up on any ballot. It would take a repeal of the 16th Amendment to eliminate the Income Tax, and I don't think ANY of our elected officials are going to do anything to allow that to happen.

The Sixteenth Amendment authorizes, but doesn't require, an income tax. Congress could repeal the income tax anytime it wants to.

7 posted on 07/03/2002 11:32:30 AM PDT by Lurking Libertarian
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To: dixierat22
I have never seen the income tax come up on any ballot. It would take a repeal of the 16th Amendment to eliminate the Income Tax, and I don't think ANY of our elected officials are going to do anything to allow that to happen.

People elected the officials. If People made the income tax an issue, it would be on the ballot. I think only the Libertarian Party is promising to remove this beast.

8 posted on 07/03/2002 11:39:20 AM PDT by A Ruckus of Dogs
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To: A Ruckus of Dogs
I think the Constitution Party promises as well. Though what are the odds of winning enough power in either party.
9 posted on 07/03/2002 11:49:11 AM PDT by CyberCowboy777
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To: A Ruckus of Dogs
Taxes

The Constitution, in Article I, Section 8, gives Congress the power "to lay and collect Taxes, Duties, Imposts, and Excises, to pay the Debts and provide for the common Defense and general Welfare of the United States."

In Article I, Section 9, the original document made clear that "no Capitation, or other direct Tax shall be laid, unless in Proportion to the Census of Enumeration herein before directed to be taken." It is moreover established that "No Tax or Duty shall be laid on Articles exported from any State."

Since 1913, our Constitutional rights to life, liberty, and property have been abridged and diminished by the assumption of direct taxing authority on each of us by the federal government.

We will propose legislation to abolish the Internal Revenue Service, and will veto any authorization, appropriation, or continuing resolution which contains any funding whatsoever for that illicit and unconstitutional agency. We are opposed to the flat-rate tax proposals that are being promoted as an improvement to the current tax system. The Sixteenth Amendment does not provide authority for an unapportioned direct tax.

Moreover, it is our intention to replace entirely the current tax system of the U.S. government (including income taxes, Social Security taxes, estate taxes, and inheritance taxes).

To the degree that tariffs on foreign products are insufficient to cover the legitimate Constitutional costs of the federal government, we will offer an apportioned "state-rate tax" in which the responsibility for covering the cost of unmet obligations will be divided among the several states in accordance with their proportion of the total population of the United States, excluding the District of Columbia. Thus, if a state contains 10 percent of the nation’s citizens, it will be responsible for assuming payment of 10 percent of the annual deficit.

The effect of this "state-rate tax" will be to encourage politicians to argue for less, rather than more, federal spending, and less state spending as well.

We endorse ratification of the Liberty Amendment, which would repeal the Sixteenth Amendment.

*****

10 posted on 07/03/2002 11:50:50 AM PDT by CyberCowboy777
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To: CyberCowboy777
Convinced me. I'm voting for ever libertarian/Constitutional Party candidate I can find
11 posted on 07/03/2002 12:16:06 PM PDT by steve50
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To: steve50
I vote CP and LP (I do have a few issues with LP though) whenever I can - Except when a real Conservative is running under GOP flags.

It does still happen, I am working on Joe Zarelli's 3rd Congressional District bid in Washington State. A true Conservative, even with the big R after his name.

12 posted on 07/03/2002 12:43:36 PM PDT by CyberCowboy777
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Comment #13 Removed by Moderator

To: CyberCowboy777
My options are gun grabbing RINOs and/or neo-conservatives. Not many LP or Constitutional Party candidates run here. Write in or leave em blank is about all I can do, I'm done with this lesser of two evils crap.
14 posted on 07/03/2002 12:53:19 PM PDT by steve50
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Comment #15 Removed by Moderator

To: steve50
neo-conservatives? Just wondering what you definition was?
16 posted on 07/03/2002 12:57:19 PM PDT by CyberCowboy777
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To: CyberCowboy777
Good question, never really got a clear definition on that one myself. Best I can figure is it's a term they use for Republicans who increase size/powers of fedgov and decrease states rights.
17 posted on 07/03/2002 1:04:17 PM PDT by steve50
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To: Lurking Libertarian
"The Sixteenth Amendment authorizes, but doesn't require, an income tax. Congress could repeal the income tax anytime it wants to."

And that's the rub! The Congress Critturs ain't about to pull the plug on the feed trough! Anyone who believes otherwise is dreaming!

18 posted on 07/03/2002 1:28:02 PM PDT by dixierat22
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To: steve50
I was wondering because I have heard it used to describe both ends of the spectrum. Strict Constitutionalist\Right Wingers and Liberal Republicans. So now I ask, 'cause I never know how it was intended.

Neo - 1. New; recent: Neolithic. 2. a. New and different: neoimpressionism. b. New and abnormal: neoplasm.

19 posted on 07/03/2002 1:32:07 PM PDT by CyberCowboy777
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To: A Ruckus of Dogs
"People elected the officials. If People made the income tax an issue, it would be on the ballot. I think only the Libertarian Party is promising to remove this beast."

Correct, but the Libertarians haven't enough power to take over a single seat in Congress that I know of. The Dems and Repubs will do all they can to keep the Libertarians out of office. The feed trough will continue to be filled with OUR money and the Ds & Rs are smart enough to know that.

20 posted on 07/03/2002 1:32:40 PM PDT by dixierat22
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