"THE POWER TO TAX," wrote Chief Justice John Marshall in McCulloch vs. Maryland, a famous 1819 Supreme Court case, "involves the power to destroy."
It is an ageless axiom. The oldest fragments of human writing -- cuneiform tablets from the fourth millenium BC -- describe the tax collectors of Sumeria as more fearsome than their kings. A tax assessor under Ivan the Terrible, one of the ruthless oprichniki, recorded in his diary: "I did no harm to anyone today; I was resting." With cruel and confiscatory taxes, Hitler set the Final Solution in motion.
Taxes can destroy. If it was true of the simple banking tax that Maryland tried to levy upon the federal Bank of the United States -- the root of the McCulloch case in 1819 -- how much more so is it true of the massive sledgehammer of payroll and income taxes with which the United States now batters its citizens.
Today, federal taxes consume 28 percent of the median family's household budget -- more than medical care, food, and clothing combined. State and local taxes eat up another 12 percent, which means the typical two-earner family sacrifices 40 percent of its income to taxes.
Forty percent! That is more than ancient kings demanded in tribute. More than the tithe commanded in the Bible. More than serfs gave up to their lords. "The average American family head will be forced to do 20 years' labor just to pay taxes in his or her lifetime," observes James Bovard in his 1994 book Lost Rights: The Destruction of American Liberty. The tax system "has turned individuals into sharecroppers of their own lives."
Federal taxes destroy time, as many of us, struggling to complete convoluted tax returns, were reminded in recent days. In 1985, Arthur D. Little Co. calculated that compliance with the federal tax code -- record-keeping, form-filling, regulation-studying, accountant-consulting -- devoured 5.4 billion man-hours. What a grotesque waste of human industry.
That's only the start. Taxes destroy business. They destroy the value of work. They destroy jobs. They destroy incentive and success. They destroy prosperity, peace of mind, domestic harmony.
Above all, taxes destroy liberty.
No agency of the federal government is as tyrannical and arbitrary as the Internal Revenue Service. It lashes taxpayers with more than 150 penalties, often for trivial violations -- or for no violation at all. Of the more than 30 million penalty notices the IRS sends out each year, it is estimated that almost half are erroneous. "If a private bill-collection agency sent out millions of unjustified demands for payment," writes Bovard, "it would almost certainly be prosecuted for attempted extortion."
But not the feds. The IRS can seize bank accounts and paychecks with no evidence of wrongdoing. Each year it makes more than 10,000 seizures of personal property, including homes and cars. In millions of other cases, the IRS extorts money by merely threatening a seizure. With no due process, without having to prove guilt first, on the strength of nothing more than a menacing form letter, the IRS coerces countless taxpayers into surrendering their property -- or spending tens of thousands of dollars to prove they're entitled to keep it.
When IRS agents abuse their power, there is virtually no recourse. They have created false tax returns and maliciously altered taxpayers' records. They have posed as accountants to lure taxpayers into breaking tax laws. They have employed what the late Senator John Heinz called "loan shark tactics" -- appearing at a person's home to warn him that if he didn't pay up, "something very unpleasant" would happen.
As the Big Bully of the federal establishment, the IRS has often engaged in political knee-breaking. Richard Nixon used the agency -- as John Dean revealed -- "to screw our political enemies." So did John Kennedy. According to taxation scholar Charles Adams, the IRS has leaked private financial information to wound its critics on the bench. Among its victims were Supreme Court Justices William O. Douglas, who faced an impeachment threat, and Abe Fortas, who was forced to resign. Their crime: dissenting from rulings giving the IRS more power.
Documented examples of IRS mercilessness are legion:
- Rohm & Haas, a chemical manufacturer, was penalized $46,806.37 for a tax payment the IRS claimed was 10 cents short.
- When Donna Todd, a Montana taxpayer, added the comment, "Signed involuntarily under penalty of statutory punishment," to her tax return, the IRS retaliated with a $500 penalty and a tax lien on her bank account and property.
- For not filling out his IRS forms on a 10-pitch typewriter -- he only had a 12-pitch -- a businessman in El Dorado, Ark., was hit with $10,000 in fines.
- To collect $14,000 in claimed back taxes from the Engleworld Day Care Center in Michigan, IRS agents held the children hostage. Parents weren't allowed to pick up their kids until they agreed to pay money to the IRS. "It was like something," one parent said, "out of a police state."
A government that can take 40 percent of your earnings is a government that can take anything it likes. The power to tax involves the power to destroy. Your freedom is more threatened than you think.
(Jeff Jacoby is a columnist for The Boston Globe).
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