Available Now! (click cover)

America's Counter-Revolution
The Constitution Revisited

From the back cover:

This book challenges the assumption that the Constitution was a landmark in the struggle for liberty. Instead, Sheldon Richman argues, it was the product of a counter-revolution, a setback for the radicalism represented by America’s break with the British empire. Drawing on careful, credible historical scholarship and contemporary political analysis, Richman suggests that this counter-revolution was the work of conservatives who sought a nation of “power, consequence, and grandeur.” America’s Counter-Revolution makes a persuasive case that the Constitution was a victory not for liberty but for the agendas and interests of a militaristic, aristocratic, privilege-seeking ruling class.

Friday, June 23, 2006

Is the Income Tax Unconstitutional?

Wishful thinking, always a temptation, is hazardous. Example: An awful lot of people think the income tax as it applies to private-sector wage earners is illegal -- even unconstitutional -- and they assume that if they can only come up with the right legal arguments, judges will strike down the tax and make America a free society once more. Many such people are in prison today.

It would be nice if their wish came true. But it's not going to happen, for reasons I will discuss here. This is another example of Richman's Maxim: There's no shortcut to a free society.
Read the rest of my latest TGIF column at the Foundation for Economic Education website.

Cross-posted at Liberty & Power.


Jim Lippard said...

Good job. I've always been amazed by the anti-tax activists who seem to have a magical view of the law--that if they utter the right incantation about typos in some states' versions of the 16th Amendment or some legal case, that the courts will be powerless to affect them. Unfortunately, the way the world works, *even if* their arguments were correct, it wouldn't make any difference--the courts today don't interpret the Constitution the way that Randy Barnett does in _Restoring the Lost Constitution_.

A while back I read Richard Yancey's _Confessions of a Tax Collector: One Man's Tour of Duty Inside the IRS_, which anybody thinking of taking the anti-tax arguments seriously should read.

The tax avoiders/evaders who do actually get away with it are a different group of people--they're discussed in David Cay Johnston's _Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich--and Cheat Everybody Else_.

Anonymous said...

Jim, I'm always amazed at the court intellectual argument that "the people" are cheated by the state getting less of someone's money. It's like a teacher's aide in a reform school trying to convince a class of students that Johnny's efforts to escape corporal punishment isn't fair to everyone else.

Incidentally, the book "Perfectly Legal" was plugged on an episode of Six Feet Under, being read by James Cromwell. In fact when he put the book down on the dinner table he said something like "The slow death of the middle class...".
I've noticed it with a couple of other titles on that show: Stiffed and Confessions of an Economic Hitman. Anyway, that's just trivia.


Sheldon Richman said...

The arguments I allude to get really ridiculous. Peter Hendrickson, in Cracking the Code, bases his entire case on his unjustified (and unjustifiable) assertion that the word "includes" in the tax code really means "is limited to." Unbelievable. So, for example, where the code says, "For the purposes of this chapter, the United States includes the District of Columbia, Puerto Rico, Guam, and American Samoa," Hendrickson takes it to mean that wages earned in the 50 states are not subject to the income tax. I kid not you.

Jim Lippard said...


My Amazon.com review of Johnston's book begins with a paragraph containing these sentences: "The author seems to hold a viewpoint in which if you avoid paying a tax--even legally--you have gained income, rather than merely avoided an expense. The author seems to hold the view there is a fixed amount of tax that is the right amount to collected, and if one person or entity reduces its tax burden, it thereby increases the burden on everyone else, cheating them. This is a judgment without any regard to the other side of the coin, government spending."

He still points out a lot of inequities in the tax system, though.

Anonymous said...

Yea, don't people who make over 80k a year pay less a proportion of their income toward social security? I remember hearing that sometime. Even Michael Medved, the radio neo-con thought that was unfair.


Jim Lippard said...

Employees and employers each give 6.2% of each paycheck to Social Security (the employer contribution is a tax invisible to the employee, but part of the cost to the employer) on the first $94,200 of income. The cap goes up each year with an inflation adjustment--last year it was $90,000.

Sheldon Richman said...

Regarding the payroll tax, it is unclear how much the employer actually pays. Some or all of the money he sends to Washington might have been paid in wages if there were no tax. It depends on the elasticity of demand for particular kinds of labor. But it is conceivable that in some cases, a worker really pays 100 percent of the tax. It is a myth that the government can accurately target a tax. What the law says and what actually happens can be two entirely different things.