It’s easy to see that it’s election time in America. Vice President Gore recently made a campaign swing around California where he handed out $185.4 million in federal grants while, at the same time, raising millions of dollars for Democratic candidates. A Gore political aid described it as “servicing the state.”
People have become so accustomed to public officials’ distributing federal grants that hardly anyone reflects on the process anymore. Where did the money come from that Gore distributed in California? It came from taxpayers all across the nation. The federal government taxes our incomes so that federal officials can then distribute the money to state and local officials in different parts of the country, especially in those areas where votes are important.
America’s tax system has become one in which everyone wages war against everyone else. Citizens in every state in the union use the federal taxing process to pick the pockets of their fellow citizens in every other state. In the words of the 19th-century, French, free-market legislator Frederic Bastiat, our government has become “the great fictitious entity by which everyone seeks to live at the expense of everyone else.”
At the same time, of course, everyone tries his best to protect his own earnings from being seized by the Internal Revenue Service and subsequently distributed to others in the form of federal grants. Every April 15, every taxpayer looks for every possible income-tax deduction and tax loophole to avoid sending his own hard-earned money to Washington.
Of course, federal grants don’t mean that people get their tax money back anyway. Grants are distributed to state and local public officials or to the politically privileged rather than to the people who actually paid the taxes. When the vice president announced that California would receive federal grants, that didn’t meant that California taxpayers were going to receive an income-tax refund check. It meant that the grant monies would be given to California politicians and bureaucrats. Californians might be pleased that their public officials, rather than officials in some other state, got the money. But one cannot help but wonder whether they would have celebrated more if they had never had their money taxed away in the first place.
Public officials point with great pride to the things that federal grants buy – public-housing projects, public libraries, government offices. And they always remind us that grants bring “jobs to your community.”
But what about all the things that did not come into existence because people were prevented from spending or investing their own money in their own way? What about the shoe store that lost out on extra sales? What about the travel agency that would have booked another vacation? What about the bookstore that would have sold more books? What about all the jobs that never came into existence in the private sector because of all the business that was never generated because people had their money taxed away from them?
Is all this what the Founding Fathers of this nation intended? Not likely. After all, our American ancestors lived without a national income tax for more than 100 years. In fact, until 1913, the U.S. Constitution did not even permit the federal government to have an income tax. The thought of using a national income tax to seize people’s earnings in order to distribute the money to others was not only considered politically immoral by 19th-century Americans. It was also considered absurd.
While Congress is debating whether to cut the national income tax, the American people should be debating whether to abolish it. The abolition of the national income tax would help to restore a sense of political morality and civility to our country. Americans would no longer be using the tax system to wage war against each other. And politicians would no longer be able to service us by purchasing our votes with our own money.