Introductory Comments

Some of the People may think Taxes are part of the War on Terror, but actually it is a separate issue. A candid look at taxation in America, however, can be terrorizing. It is frightening how far astray we have allowed our government to go. They are taking money from the People like never before and at a much steeper rate than the colonies ever suffered under King George III. Furthermore, our government is working diligently to make the People totally dependant on the structure of government they are erecting, creating what some wags call the "nanny state". This is a condition where People cannot do things on their own. Instead the People wait for the government to provide for them. All the while, the ruling elite consolidates power, enslaves the People by making them dependent, and increases taxes, causing We, the People to finance our own dependency.

(Brief) History of Taxes 

Our Federal Government has not always relied on the income tax as its principle source of revenues. In fact, for over half of our nation's life, other taxes were used to finance government, mainly tariffs on imported goods. This was a far less oppressive method of taxation. Consumers who purchased the imported goods ultimately paid for the taxes since they were factored into the final price for the item. This had a side benefit of encouraging American manufacturing and led the nation to become the premier industrial nation in the world.

The first income tax was initiated during the Civil War as a means of repaying the debt incurred to finance the conflict. The tax was 3% on all income over $800, which exempted most wage-earners of the time. A year later, the law was modified to exempt incomes of $600 or less, assess 3% on incomes between $600 and $10,000, and collect 5% on incomes over $10,000. In 1872, Congress allowed this income tax to expire and the country returned to tariffs as the main mechanism to finance Federal Government.

The Revenue Act of 1894 reestablished a Federal income tax. This measure assessed a tax of 2% on annual incomes exceeding $4,000. To put this in perspective, according to 1880 census data, the average annual wage earned in manufacturing was $484 -- that's right, that's per year. So the majority of Americans were not impacted by the income tax, and those that were certainly were not concerned over 2%. The next year, the income tax was declared unconstitutional anyway (Pollock vs Farm Loan and Trust Co), although this decision was repudiated by later Supreme Court decisions.

In 1913, with the ratification of the 16th Amendment, another Revenue Act was passed establishing the income tax. In 1913, the original Federal Income Tax (under the 16th Amendment) was imposed at these rates:

• $3,000 to $20,000 in earnings 1% Income Tax
• $20,000 to $50,000 in earnings 2% Income Tax
• $50,000 to $75,000 in earnings 3% Income Tax
• $75,000 to $100,000 in earnings 4% Income Tax
• $100,000 to $250,000 in earnings 5% Income Tax
• $250,000 to $500,000 in earnings 6% Income Tax
• Over $500,000 in earnings 7% Income Tax

(Remember, the average family income in 1913 was only $500 per year.)

The income tax was originally intended to tax only the wealthy, those who could afford the tax and who enjoyed the most obvious financial benefits from living in a free society. Gradually, this idea eroded as the Federal bureaucracy grew and permeated every aspect of life. Now the tax is assessed on incomes at rates starting at 10% and climbing to 35% after a complicated set of deductions to earned income are allowed. The mechanism for calculating the tax has become so complex that 61.2%(1) of the returns filed for 2005 were prepared by someone other than the taxpayer (up from 38% in 1980).

Following is a table that further underscores the complexity of the Income Tax Code:

Form 1040 - Form and Instructions

This is but a token of the evidence that our tax structure is in serious need of revamping. A major overhaul of our entire tax system is essential. It is badly broken; out of control. It is increasingly incomprehensible. There is a better way and, We, the People need to pursue that way. Fundamental reform is critical. A major overhaul is mandatory. A sense of urgency is required.

Fairness of the Tax System

The current tax system is inherently burdensome. Consequently it patently unfair. It is not designed to be unfair. The system purports to be fair, tries to be fair, and wants to be fair. It is not. Too many loopholes are created for special interest groups. The original tax system was intended to be financed by those most able to pay for government. Two centuries ago, the leaders felt it was the civic duty of those who were blessed with resources to bear the brunt of government financing. Then greed took over. Special interests came to view government as a vehicle to benefit the privileged. Now they dole out welfare, currently calling it "entitlement". These entitlement programs serve to keep people within defined boundaries. The wealthy get richer while the poor are kept in their place for fear of losing basic necessities of life.

There are better ways, much better ways to eliminate the burdensome bureaucracy while generating taxes to cover needed (and Constitutional) government services with a tax system that is fair to all.

Honest citizens are willing to pay taxes. We, the People want efficient, effective government in return. We want government that enables an environment where people can grow, achieve, and enjoy the blessings of freedom. The current tax system and entitlement programs have hampered growth, frustrated achievement, and created dissatisfaction while seriously threatening our freedoms.

It's time to change the system.

There are several viable and valid proposals on the table. Both the flat tax and fair tax proposals have merit, are workable, and are eminently more fair than the current system. What is lacking is leadership within our elected government who will step out courageously and fashion tax reform to provide a fair tax system and allow the People to keep more of their hard-earned money.

To accomplish this, the People must act, get involved, and send one of the People to Washington. It is time, past time, for serious change in our government.

Burden of Taxation

Today Americans are working well into May each year just to pay their taxes and finance a government and a bureaucracy that is no longer responsive to the People. This burden oppresses the People and causes frustration. Tax dollars both directly and indirectly fund organizations that are working to change the very system of government and further oppress the people.

Wake up, America. You are not getting the government you are paying for. Unless you arise and support real change, the tax burden will grow greater. It is time for serious change.

Let's send a message. Let's make history. Let's choose one of the people and throw off the shackles of taxation that are burdening us down. There is a better way. Let's take it.

Concluding remarks

Ronald Reagan told us, "Government is not the solution to the problem, government is the problem." It is time to address this problem. Revamping the tax system to make it more fair and equitable is a major step toward improving things for each American individually.

America is about opportunity. We pride ourselves in our ability to make something out of our lives and make things better for our children. We can choose almost everything in our lives … where we live, where we work, where send our children to college, are just a few examples. All this goes out the window with a tax system that enslaves the population and makes them dependent on government handouts, euphemistically called "entitlements".  The American People, We the People, are smarter than this. We deserve better, much better that we are currently getting.

Let's send them a message. Send Mr. Smith to Washington. Wake up, America! The taxes you save will be your own.

-- Richard Michael Smith

May, 2006

(1) Through March 17, 2006; figure calculated from the revised March 17, 2006 Taxpayer Usage Study report of the IRS.

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