Monthly Archives: October 2020

Another One-sided Piece of History to Tax your Thinking

Seems like I can’t get away from hearing the terms white privilege, social justice and systemic racism. I can’t even use sports as an escape. So why am I mentioning the same terms on a taxpayer site? Sorry to say that without the federal tax code, what we’re seeing could not be happening.

That’s quite a claim, so I better put up or shut up. I’ll lay it out for you with no holds barred, and explain my claims in a latter piece. If you go on to read the detail, perhaps you’ll see new avenues for action – actions that can actually make a difference without breaking windows or burning down buildings.

I’ll start out with Privilege. A privilege has to be granted by someone or somebody with authority. Only the State has both the authority and the ability to enforce what gets granted. Read the tax code!

Social justice deals with the fairness of privileges and opportunities within a society. If you can work your way through seventy thousand pages of the code, the revenue rulings and the case law, you can make your own decision on this one. Read the tax code!!

Systemic means it lives inside the system. By now you’ve gotten the point. Read the tax code!!!

When the 16th Amendment was adopted, it freed Congress to use the tax code to accomplish social engineering. Only a fool would fail to see the mischief that would come about when Congress discovered how easily votes could be purchased with favorable tax regulations, not to mention the lucrative campaign contributions that would start to flow.* It only took three years and a World War to open the flood gates.

*See Brushaber v. Union Pacific R. R. Co. where 8 of 9 Supreme Court Justices failed to acknowledge the potential for mischief. The 9th Justice abstained.

With no lack of respect for the learning and for the foresight of the jurists now occupying the bench, we are constrained to repeat that an answer has not been brought forward to the objection that a graduated income tax enactment sets up a classification purely arbitrary, and does violence to that principle of equality before the law upon which the safety of our institutions depends.
Yale Law Journal, Vol XXV, April 1916

Am I saying that all our problems have been caused by what’s in the code? While those provisions are illustrative, what makes taxes so instrumental is that they provide the money to keep the system going. You see, at the outset, the Constitution limited the power to tax. Direct taxes were fair game. These included tariffs and duties, along with taxes on certain types of property. A tax on income was considered to be indirect, and had to meet the test of being proportionate to each of the states.

There were a couple of occasions when Congress taxed income using a graduated method. These occasions were used to finance wars, and even those were not always successful when challenged in court. The 16th Amendment did away with the test. Our elected representatives now have a clear pathway to your wallet and mine, and can finance almost anything with no personal liability or responsibility.

Conclusion: If you want to deal with Social Justice, White Privilege and Systemic Racism, look no farther than the tax code. In the process, don’t overlook the states.