Tax Day is not an occasion Americans celebrate with picnics, presents, or parades. Yet, we haven’t always had a Tax Day.
The income tax was foisted upon us in 1913 by the generation that passed the 16th amendment to the U.S. Constitution. The 16th amendment states, “The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.”
Prior to 1913, there was no direct taxation of the people. In fact, the Constitution forbade it. Let that sink in. American citizens of 1913 voluntarily subjected themselves to direct taxation by the federal government!
Four words in that amendment (“from whatever source derived”) and six words missing from that amendment (“… a maximum tax rate of —%”) enable the federal government to “lay and collect taxes” without restraint. Add to that constitutional “permission” a Congress that (1) fails to limit the national government to the enumerated and implied powers of the Constitution, and (2) approves budgets that exceed tax revenues (deficit spending), and you have our current $4.2 trillion budget and $19.5 trillion debt. That debt amounts to $165,564 per taxpayer!
Contrast that budget and debt with these figures for 1913: $11.7 billion in revenues and $11.7 billion spent (i.e., a modest balanced budget).
Why has there been this massive increase in the national budget? I surmise it is because Congress has unlimited funds to add government functions and programs.
Only seven executive departments predate the 16th amendment: State, Treasury, Interior, Justice, Agriculture, Commerce, and Labor. These functions of government were funded through excise taxes and tariffs. In the time span since ratification of the 16th amendment, eight more executive departments (and the agencies and programs associated with them) have been instituted: Defense, Health and Human Services, Housing and Urban Development, Transportation, Energy, Education, Veteran Affairs, and Homeland Security. Some of these departments are clearly unconstitutional.
Congress has also increased the rate of taxation dramatically. The Revenue Tax Act of 1913 imposed a graduated tax starting at 1% with a maximum rate of 7%. In contrast, the 2016 income tax rate ranges from a minimum of 10% to a whopping 39.6%. The 16th amendment also allows two additional direct federal taxes on income. Employees and employers each pay 6.2% for Social Security and 1.45% for Medicare. This jumps the individual tax rate to a 17.65% minimum and a 47.25% maximum!
The House of Representatives has the “power of the purse” through its constitutional authority to propose “All Bills for raising Revenue…” (Article I, Section 7). However, We the People can reduce the revenue source of the federal government by repealing the 16th amendment. Whether Congress passes this repeal or the states, via an Article V convention of states, initiate the 16th amendment repeal process doesn’t matter. Imposing fiscal restraint on the federal government is the duty of this generation.
Downsizing the federal government can, and should, begin while the repeal process is underway (16th amendment repeal could take years to accomplish). Steps that should be taken include the following:
- President Trump should direct his administration to review all existing departments, agencies, programs, grants, etc. and identify the article, section, and clause of the U.S. Constitution which authorizes that function of government. Any function of government of government that is unconstitutional should be removed from the current budget and abolished. Citizens can ask President Trump to do this by sending an email to https://www.whitehouse.gov/contact. Such a request would be consistent with the memo he circulated via email on April 12, 2017: “President Donald J. Trump believes our moral duty to the taxpayer requires us to make our government leaner and more accountable. Today’s announcement of his “Comprehensive Plan for Reforming the Federal Government and Reducing the Federal Civilian Workforce” returns the Federal government to its primary purpose, to provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty.”
- President Trump should sign an executive order requiring constitutional limitations on all future legislative actions. That order might read as follows: “Every bill which is proposed, voted upon, or passed by the House of Representatives and the Senate, and signed into law by the President, must indicate the article, section, and clause of the U.S. Constitution which authorizes the expenditure of funds or function of government specified in the bill.” Such an executive order would force Congress to consciously limit the federal government agencies (and funding for them) to only those enumerated or implied powers stated in the Constitution.
- The Congress should introduce and pass a constitutional amendment to Article 1, Section 7 which would incorporate the “constitutional limits” executive order (#2 above) intent into the U.S. Constitution.
- The federal government hiring freeze should be continued. In addition, positions vacated through attrition or retirement should not be filled, with exceptions for essential functions related to national security.
Taking these steps now will make the transition to smaller government that follows 16th amendment repeal less “painful.” We will already have shifted our mindset to what a constitutionally limited government looks like and purged unnecessary programs.
Does this need to happen? Yes. Our federal government has a spending addiction that has proven unhealthy for our economy and the continuation of our Republic.
Will 16th amendment repeal affect Social Security and Medicare (which are also direct taxes on income)? Yes – there would no longer be authorization to tax individual income. But I have a plan to phase out Social Security over 30 years; the concepts of this plan can also be applied to Medicare. That plan continues benefits for current recipients and pays out what contributors (and their employers) paid into the program — but no more (i.e., no coverage for “life”). The benefit to wage earners will be keeping 7.45% to plan for your own retirement. (Employers might even put the 7.45% they would previously have had to contribute to Social Security and Medicare toward your salary or 401k!)
I plan to submit this call for 16th amendment repeal to members of Congress and to the Convention of States Project (conventionofstates.com). The COS Project is a well-organized effort to convene a limited-topic convention of the states for the purpose of proposing amendments to the Constitution which establish term limits, impose fiscal restraint, or otherwise limit the size and scope of the federal government. Ten states have already passed a uniform application to convene this convention. This means of proposing 16th amendment repeal needs to be considered in case Congress refuses to restrain its own spending. Three-fourths of the states must ratify any proposal for repeal that is approved by either Congress or an Article V Convention of States.
We the People can devise the solutions to re-establish the balance of power in favor of the people and the states. Please participate in this process by contacting President Trump and your U.S. legislators, and sending me your thoughts about 16th amendment repeal via email at [email protected]Don't forget to Like Freedom Outpost on Facebook and Twitter, and follow our friends at RepublicanLegion.com on Instagram.