The Patriot Post - Alexander's Column 8-9-2017

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The Patriot Post - Alexander's Column 8-9-2017
From The Federalist Patriot
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Yes, all with no income tax.

According to Heritage Foundation economist Stephen Moore, “The nine no-income tax states (including Tennessee) have had almost three times the job rate increase that the states with income taxes have had. There is a clear migration of businesses, factories and jobs to these states that have no income tax, and I’m just mystified that more states have not moved into that column.”

Of course, Moore isn’t really “mystified.”

He knows well that the only power politicians have is directly correlated with their ability to tax, regulate and spend. Thus, taxation and regulation is the fuel that powers the Democrats’ socialist machine. As such, it is their best assurance of re-election.

In 1961, Ronald Reagan, in his famously prophetic remarks about the path to socialism, said, “One of the easiest first steps in imposing socialism on a people has been government-paid medicine. It is the easiest to present as a humanitarian project. No one wants to oppose care for the sick.” That was 50 years before Democrats passed Barack Obama’s14 so-called “Affordable Care Act15,” which is now on life support23.

Reagan also condemned progressive taxation, warning, “None of these extensions of socialism can be effected without money.” He noted, “Once we were told the income tax would never be greater than 2%, and that only from the rich.” But that was a ruse, and Reagan declared, “There can be no moral justification of the progressive tax.” He spoke about the economic implications: “We have a tax machine that, in direct contravention of the Constitution, is not designed to solely raise revenue but is used, openly and admittedly, to control and direct the economy and to equalize the earnings of our people.”

(Reagan further refined his economic principles in his most famous 1960s speech, “A Time for Choosing24.)

The danger of direct taxation is precisely why our Founders objected to it, and enumerated their objection in our Constitution’s25 Article I, Section 8, Clause 1, a proscription against such taxes — which, as noted previously, lasted until Woodrow Wilson overturned their wisdom in 1913.

In 1962, Reagan’s tax-cutting supply-side views were echoed by an unlikely ally, the Democrats’ favorite son, John F. Kennedy. Arguing for passage of his tax-reduction bill, Kennedy proclaimed: "Our true choice is not between tax reduction, on the one hand, and the avoidance of large Federal deficits on the other. It is increasingly clear that no matter what party is in power … an economy hampered by restrictive tax rates will never produce enough revenues to balance our budget just as it will never produce enough jobs or enough profits. … In short, it is a paradoxical truth that tax rates are too high today and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rates now.”

Similarly, in 1963 Kennedy insisted: “A tax cut means higher family income and higher business profits and a balanced federal budget. Every tax payer and his family will have more money left over after taxes for a new car, a new home, new conveniences, education and investment. Every businessman can keep a higher percentage of his profits in his cash register or put it to work expanding or improving his business, and as the national income grows, the federal government will ultimately end up with more revenues.”

Kennedy concluded: “A rising tide lifts all boats.”

And he was right — tax reductions did increase tax revenues, just as they did after President Reagan cut taxes 20 years later.

According to Treasury records, as tax rates dropped, profits increased — and so did tax revenues from those profits, most notably on the wealthiest Americans. The total income tax burden paid by the top 10% of earners increased from 48.0% in 1981 to 57.2% in 1988. Even more notable is the fact that the top 1% of income earners saw their share of total income taxes rise from 17.6% in 1981 to 27.5% in 1988.

Apparently, Reagan’s “trickle-down” supply-side tax reduction principle not only works but works well — which explains why the Democrats loath it! Again, Tennessee is the model for those principles today.

Regarding the complexity of the tax code, Reagan also offered this warning about the burden of tax complexity in 1961: “In my lifetime, this law has grown from 31 words to more than 440,000 words.”

Today, the federal tax code26 and its supporting documentation, rules and regulations, has grown to more than 10 million words. That includes more than 100 pages of instructions for the “simple” Form 1040!

To put that into perspective, our Constitution, the enumeration of Rule of Law27 that binds our Republic, is only 4,543 words.

Another overwhelming consequence of the unmitigated and oppressive growth in the central government’s behemoth tax scheme is the preparation and compliance costs borne by taxpayers and corporations. That cost is now estimated at almost $1 TRILLION28. And the Tax Foundation29 estimates that Americans will have to devote more than 8.9 billion hours annually to ensure compliance with the tax code and Federal Register.

Once asked about completing his tax return, Albert Einstein replied, “This is a question too difficult for a mathematician. It should be asked of a philosopher. … The hardest thing in the world to understand is the income tax.”

As humorist Will Rogers lamented, “The income tax has made more liars out of the American people than golf.” Novelist Herman Wouk wrote, “Income tax returns are the most imaginative fiction being written today.”

Now, against what will be the endless Democrat onslaught of class warfare rhetoric amplified by their mainstream media propaganda machine30, what’s the GOP to do?

First, when the Republicans’ tax reduction and simplification proposal is swamped with the Demos’ classist rhetoric, remind them that, in the words of Ronald Reagan, “You can’t be for big government, big taxes and big bureaucracy and still be for the little guy.” (Reagan aptly summed up the Democrats’ policies: “If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”)

Second, Trump and the GOP should also remind their Democrat opponents in every public forum that the origins of American Liberty31 are rooted in a tax revolt. That trenchant observation will certainly resonate with Trump’s patriotic supporters.

As James Madison wrote, “The people of the U.S. owe their Independence and their Liberty, to the wisdom of descrying in the minute tax of 3 pence on tea, the magnitude of the evil comprised in the precedent,” which led to the Boston Tea Party of 1773.

Semper Vigilans Fortis Paratus et Fidelis
Pro Deo et Libertate — 1776