Given the recent focus on taxation in our political circles, I thought it an opportune time to offer a different perspective on the whole notion of taxation: that of our founding fathers. However, before we can understand how the founders viewed the principles of taxation, we must first understand how the founders looked at the right to property. So, let me start by citing something Thomas Jefferson once said:
“He who is permitted by law to have no property of his own, can with difficulty conceive that property is founded in anything but force.”
John Adams said it even more forcefully:
“The moment the idea is admitted into society that property is not as sacred as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence. If `Thou shalt not covet’ and `Thou shalt not steal’ were not commandments of Heaven, they must be made inviolable precepts in every society before it can be civilized or made free.”
In fact, the founders were clear: one of the primary reasons people agree to enter into civil government at all is to secure the right to property. So, any act by that civil government that would undermine or threaten this right to property would then be a violation of the agreement between every individual within a free and self-governing society, thus rendering that agreement null and void. This means, if a government rejects the terms of the social contract which formed it and tramples the rights of its citizens, it places itself in a state of war with its own people. In fact, this is exactly where our founding fathers found themselves with England, and largely over the issue of unjust taxation.
Not surprisingly, our founders where very sensitive to the problems of how to raise sufficient revenues to govern the nation while, at the same time, protect private property rights. One of the first principles of just taxation – at least as our founders saw it – was to ensure that our taxes were not affixed to our property. The reason for this can be found in another quote from Thomas Jefferson:
“The right to use a thing comprehends a right to the means necessary to its use, and without which it would be useless.”
In so far as this sentiment applies to taxation, it means that any system of taxing a person that provides for the confiscation of personal property must be seen as unjust. At first glance, it might seem necessary to connect a person’s property to the taxes they owe: how else to insure someone pays their taxes. But note: if you can lose a $100,000 home for want of a few hundred dollars owed in taxes, then you cannot be said to truly own that home. At best, you are renting the right to control it for a period of time and under certain conditions. In this case, so long as your taxes are paid. Therefore, any system of taxation that is attached to a person’s property would violate natural law and, therefore, it must be viewed as unjust. If you look, you will see that our State and Federal governments now use this sort of attaching of property to tax liability because they can confiscate property worth far more than the taxes that are actually owed. What’s more, our governments frequently do this without any form of due process – a further violation of natural law and the social contract.
“Each individual of the society has a right to be protected by it in the enjoyment of his life, liberty, and property, according to standing laws. He is obliged, consequently, to contribute his share to the expense of this protection; and to give his personal service, or an equivalent, when necessary. But no part of the property of any individual can, with justice, be taken from him, or applied to public uses, without his own consent, or that of the representative body of the people. In fine, the people of this commonwealth are not controllable by any other laws than those to which their constitutional representative body have given their consent.”
–John Adams, Thoughts on Government, 1776
There is something of great importance we should also take from Adams. Notice how he does not excuse those who are considered to be poor from paying taxes. He clearly indicates that, since all men benefit from the government, all men are obliged to pay their share of its cost – and this includes personal service.
Now, in addition to the protection from the attachment of property to taxation, the founders were against the notion of unequal tax policy:
“The apportionment of taxes on the various descriptions of property is an act which seems to require the most exact impartiality; yet there is, perhaps, no legislative act in which greater opportunity and temptation are given to a predominant party to trample on the rules of justice. Every shilling which they overburden the inferior number is a shilling saved to their own pockets.”
–James Madison, Federalist No. 10, November 23, 1787
But the founders’ concern over unequal taxation did not extend merely between the majority and minority political Parties, but to different social classes and even to different types of property as well:
“A just security to property is not afforded by that government, under which unequal taxes oppress one species of property and reward another species.”
–James Madison, Essay on Property, March 29, 1792
Finally, the founders recognized the problems associated with excessive taxation, and the harm it does to the economy:
“If duties are too high, they lessen the consumption; the collection is eluded; and the product to the treasury is not so great as when they are confined within proper and moderate bounds. This forms a complete barrier against any material oppression of the citizens by taxes of this class, and is itself a natural limitation of the power of imposing them. “
–Alexander Hamilton, Federalist No. 21, 1787
Which leaves us to wonder: exactly what did the founders think was the best and “fairest” form of taxation? Well, it’s a funny thing – what one learns when one actually reads what the founders said the Constitution means and how it was intended to be applied. Take the extensive use of quotes from the Federalist Papers in this post as an example, and then consider one more:
“It is a singular advantage of taxes on articles of consumption that they contain in their own nature a security against excess. They prescribe their own limit, which cannot be exceeded without defeating the end purposed — that is, an extension of the revenue.”
–Alexander Hamilton, Federalist No. 21
But then, the founders believed in something else that negates everything I just explained because we have rejected it, too: fiscal responsibility. Our founders lived within their means and, when the need exceeded that means, they asked the people to raise the additional monies, or they did without. Today, however, we just decide what we want to spend and then worry about finding a need for that amount of monies and, finally, how to raise it. It seems to me that the structure of our modern tax policy amounts to little more than plunder of the masses by the ruling classes. By attaching the common person’s right to property to his or her tax burden while using that same tax policy to exempt themselves from similar exposure, the ruling elite are making the rest of us into nothing more than modern serfs. And I think that will be the subject of my next post: how the ruling class is preserving its lineage by manipulating the tax code to prevent anyone in the common class from being able accumulate enough wealth to join their ranks.