No Federal Taxation of Individuals, Speech Example

What we the people give, we the people can take away. We the people gave ourselves a constitutional amendment. We can take it away. We did it once before, in 1933, with the 21^st amendment. Its sole virtue was that it rescinded the 18^thamendment, which established Prohibition. Voters change their minds sometimes. We can do it again. Let’s get started.

Seven years before America’s failed “noble experiment” with Prohibition, Americans decided to tax themselves at the federal level. They passed the 16^th amendment. Perhaps they were drunk. From that moment on, life became less free. For starters, now a lack of action could make you a criminal. You now had to take the time to learn the details of tax law under duress of fines or imprisonment. Although at first the tax applied only to a relatively few people, that situation didn’t last long. The people found that their government had a voracious appetite for spending. And that’s because the people themselves had a voracious appetite for getting. Their me-first philosophy became Don’t tax you, don’t tax me, tax the fellow behind the tree. That tree still stands. But now there are fewer and fewer fellows behind it. According to a CNNMoney story, 43% of working Americans are not required to pay federal income taxes (CNNMoney).

The American people decided to tax themselves for the same reason they decided to ban booze: nobody thought the law would apply to them inconveniently. But the anti-booze Volstead Act changed all that. It didn’t need to be ratified by the states. Americans woke up to find themselves in a kind of fun-house nightmare. That process took a bit longer for federal taxes. But it happened, minus the fun. Substantial changes to the tax code did not have to be ratified by the states. Instead, they morphed within the Capitol’s corridors of power, which were soon flooded with lobbyists with pocket money to spend. More and more people found that they had to file and pay. Even if they didn’t have to pay, they had to take the time and effort to file.

The infrastructure of business changed. Business owners realized that tax strategy often had to be as big a part of their business plan as their business itself. Tax shelters appeared. An army of tax auditors and tax accountants sprang up like dragons’ teeth. Today, the yellow-brick road is studded with them. Legal entities of all kinds have no interest in tax reform per se. They just want a tax-break — their own tax break. So does everybody — so everybody gets one.

Many solutions have been proposed over the years. The challenge is that major reforms have to be vetted politically. Many people and businesses oppose reform because it might threaten their tax breaks they have managed to get written into law. The Bleak House-worthy archive of deductions and exemptions is so tangled that “reform” just seems part of the problem.

Realistically, what can be done? Or what should be done? There have been many tax-reform bills introduced into both houses of Congress and there have no doubt been many plans to eliminate the electoral college. The Washington Post recently reported on yet another: the National Popular Vote Interstate Compact. It would award electoral votes to the presidential candidate who receives the majority of the popular vote (Blake). It’s based on Article II, Section 1 of the U.S. Constitution, which gives to each state the right to decide how to appoint its own electors. Ten states and the District of Columbia have signed on. In any case, the link between the electoral college and tax reform is to directly elect the President of the United States, increasing the political power of cities at the same time. How? Because most Americans live in cities and so cities are where the money is. With direct election, cities would determine elections, not states. That’s the key point: the electoral college short-circuits cities’ political power.

And what does that have to do with eliminating the IRS? I think it would fire a revolution from below: people living in underpopulated areas would demand to know why they should have to pay federal taxes when they have been effectively disenfranchised in presidential elections. It would be a fair question to ask and it would have to be answered. That answer might be for a much-simplified IRS to just tax the states directly, using a formula based on each state’s gross domestic product and how many electoral-college votes a given state would have had if indirect elections were still taking place. The electoral college would exist, but now for tax purposes only. States in turn would collect those federal taxes through their own tax agencies, and pass the required percentage to Washington. In short, the tax would be apportioned among the states. The result of the direct election of the President would tend to be higher tax-rates for cities (although affluent rural-dwellers would of course pay as well). This would have the effect of increasing city power, because, paying the piper, cities would increasingly call the tune.

I think this whole process would be beneficial to everyone. Taxation would be increasingly local, and primarily based on city revenues. As the late urbanologist Jane Jacobs pointed out in her book Cities and the Wealth of Nations, cities generate capital, technology, jobs, markets, and city/rural employment (Jacobs). Even in remote, resource-rich places, it is city-generated capital and city-generated industries around the world that use the resource in large quantities — whether it is gold, natural gas, or oil. Or sun. Or wind. They even use sand.

Let the feds tax the states. Let states tax their residents and businesses most where most of them are. America’s revolutionary cry was No taxation without representation. Direct election would represent the most the best. Power brings responsibility. Can’t have one without the other.

Works Cited

Blake, Aaron. “The National Popular Vote effort, explained.” The Washington Post 25 July 2013. Newspaper.

CNNMoney. 29 August 2013. Webpage. 25 April 2014.

Jacobs, Jane. Cities and the Wealth of Nations. New York: Vintage, 1984. Book.