3. The traditional American philosophy of constitutionally limited government--Limited for Liberty--is hostile to any concept which would permit any unlimited power of taxation to exist to the peril of Man's unalienable rights. Potential danger, not merely present danger, is the crux of the matter and the reason for constitutional safeguards, which are designed to provide protection in the worst imaginable situations. This philosophy prescribes various limitations upon the taxing power of the Federal government, as expressed in the Constitution. For example, Article 1, Section 8, of the Constitution authorizes Congress to make only specified levies--within the bounds of certain specific limits as to uses of tax monies: "to pay the Debts and provide for the common Defence and general Welfare of the United States." It also authorizes taxes only to raise revenue to pay for the government's authorized activities, within the bounds of its limited powers and limited duties under the Constitution, as amended--for use directly and openly to accomplish the objects committed to its care and the trusts for which it is made responsible by the people under this basic law. This is according to the controlling intent of those who framed and ratified the Constitution in 1787-1788, and likewise as to each amendment.

Examples of What Is Not Authorized

4. A few examples of what is not authorized by the Constitution in this regard, therefore as impliedly prohibited, will be clarifying. In general, the power of taxation may not be used by the Federal government as a means of bringing about indirectly and subtly any governmental change, or any social or other type of reform, or to achieve indirectly in effect Federal control of anything or anybody, or to accomplish any other result whatever, which the people have not authorized by the Constitution to be accomplished directly and openly. Nor may the power of taxation be used in furtherance of any abuse of the limited powers granted to the Federal government, or in furtherance of activities due to usurpation of any power withheld from it, or denied or prohibited to it, expressly or impliedly, by the people through the Constitution, as amended.

It is especially noteworthy that Hamilton, as Secretary of the Treasury, in urging for the first time in 1791 that the Taxing Clause granted to the Federal government a separate and substantive power for the application of money, "within the limits of what would serve the general welfare," conceded that such power would "not carry a power to do any other thing not authorized in the Constitution, either expressly or by fair implication." (See Pars. 8-10 of Principle 5.)

Some specific examples are as follows. The power of taxation may not be used so as to prevent criticism of the Federal government by the Press; which would be exercising power over a field of activity withheld from this government by the original Constitution and expressly prohibited by the First Amendment. Nor may taxes be used to obtain funds to subsidize, and in effect to control, any field of activity denied to this government (excluded from its enumerated powers) and reserved to the States by the Constitution--so as in effect to "buy" submission to Federal usurpers: such as agriculture. Hamilton made it expressly clear, in The Federalist number 17, that this is a field of activity over which the Federal government had been given no power--a field over which it could never properly be given any power to control. Also, taxes may not be used to stifle, undermine, or destroy any part of the traditional American system's economic aspect of Liberty such as Individual Enterprise (individual, private, competitive, enterprise).

Equally repugnant and prohibited are taxes designed to put into effect the anti-private-property idea, or plan, of "leveling" of ownership of property (money or any other type) by attempting to make all people more "equal" as to property, or as to income, by taking from some to give to others--as a means of achieving social reform or any other purpose not directly and openly authorized by the people in the Constitution. For example, in 1768 a Resolution of the Massachusetts House of Representatives (drafted by James Otis, Samuel Adams et al) denounced such leveling as being "despotic and . . . unconstitutional." Two decades later The Federalist (number 10, by Madison) condemned it as "improper" and "wicked." Jefferson decried leveling as being unjust and violative of "the first principle of association"--meaning a people's associating for purposes of self-government.

The Examples Continued

5. Congress is not authorized to tax and spend as it pleases, for any and every purpose which it may choose to say, or actually thinks, will serve the "general welfare." Those who framed and ratified the Constitution in 1787-1788 intended the Taxing Clause's words: "general Welfare of the United States," to serve as a limitation on the taxing power. These words were designed to restrict taxing and spending to constitutionally authorized objectives, meaning in part only those which would serve the welfare of the United States as a whole and not merely of a locality, not of individual citizens. Congress does not possess unlimited, sovereign power to tax the people. (See Pars. 8-10 of Principle 5.) It does not even possess "general legislative authority, as Hamilton stated in The Federalist number 83.

Congress has, of course, been granted no power to exceed its constitutional authority or responsibilities by being benevolent, by making donations, of money or property at home or abroad at the expense of the American people's income, or other money or property. According to the controlling intent of those who framed and ratified the Constitution, the only words in the Taxing Clause which could possibly be said to sanction any donation to any foreign government, or people, are the words "national defense"--meaning direct and actual military defense of the American homeland. Any and all foreign donations by the Federal government are, therefore, clearly prohibited by inescapable implication unless, and except to the limited extent that any such donation in actuality helps directly and substantially, on a realistic military basis, to "provide for the common Defence . . . of the United States"--of the States composing the Union.

These few illustrations exemplify prohibited misuse of the limited taxing power as granted by the people to the Federal government under the Constitution, as amended.

Peril to Liberty--Multiplied

6. The traditional American philosophy recognizes that an unlimited power to tax involves the power to destroy--a truth long known. This becomes all the more evilly significant if, when and to the extent that the Federal government becomes guilty of wholesale usurpation of power to expand its activities, at home and abroad, in defiance of the limits on its power imposed by the sovereign people through the Constitution. The evil significance involved is greatly augmented when--in furtherance of such wholesale usurpation--any such official culprits: Federal usurpers, employ oppressive taxation so as in effect to finance their political schemes to keep themselves in power, in control of the government, by using vast sums of public monies to subsidize--in truth to bribe, corrupt and seduce--immense segments of the electorate through distribution of individual money "benefits", to win their votes. This aim and process are furthered by building up a vast governmental bureaucracy which helps to serve this objective but has no sensible relation to sound governmental operations serving constitutionally authorized purposes. Then, indeed, are Individual Liberty and sound self-government in America--also the integrity and safety of the Republic itself--placed in effect on the auction block. This potentially disastrous condition, of danger compounded, becomes almost unlimited in degree of peril for Free Man in America, for American Posterity, when this combination of usurpation and tax tyranny is employed--by such usurpers and their collaborators in all walks of life--to supplant the traditional American system of Man-over-Government with the system of Government-over-Man. The foregoing precepts reflect some aspects of The Founders' thinking in this connection. (Note especially the Jefferson quotation on page xx, ante, about taxing--spending--electing.) Any accomplishment of the prohibited objectives by gradual and deceptive steps--rather than directly and openly--highlights the importance of keeping ever in mind a maxim of which the sense was well-known to them and is expressable in verse form as follows:

Great Oaks and Great Tyrannies

Just as surely as "great oaks from little acorns grow,"

So do greatest tyrannies have smallest beginnings;

Yet the mind, uninstructed by knowledge or reason,

Cannot sense either oak or tyranny in the seed.

No Unlimited Income-Tax Power Under the Principle of Limited Government

7. The foregoing holds good even though the traditional American philosophy and system contemplate the Federal government's possessing, by grant of the people under the Constitution, "an unqualified power of taxation in the ordinary modes," as stated in The Federalist (number 31, by Alexander Hamilton)--for instance, a consumption tax on sales of goods. Such a tax cannot become dangerous to the people's liberties because it contains an automatic check on abuse by way of such taxation; if the amount of the tax offends them, they can simply refuse to buy the goods and thereby make the tax a failure, leading to its repeal. Even "an unqualified power of taxation" in some mode which was not ordinary in the days of The Founders and was not provided for by them in the Constitution--for instance, a graduated, "escalating" income tax, especially without expressly specifying a maximum rate or "ceiling"--would nevertheless have been considered by them to be impliedly limited in effect because subject to the following factors. First, the principles proclaimed in the Declaration of Independence--notably that governments are granted only "just powers," meaning limited powers, in order to make and keep secure the people's unalienable rights--forbid the existence in America of any system of government or governmental practices which could, in effect and in the unlimited discretion of public servants, impose tax-slavery upon the people through permitting these public, servants in peacetime to confiscate most, or all, of the income of the people to be spent as these public servants may please. This assuredly would have been considered by The Founders to be the very definition of tax-tyranny, which was one of the chief causes of the Revolution in 1776. Second, the system intended to be created by The Framers and Adopters of the Constitution--with only the few, limited powers enumerated being granted to the Federal government (for example, per The Federalist number 45 by Madison with Hamilton's silent concurrence)--likewise bars tax-tyranny because Congress is authorized to tax and spend only within the scope of its power-limits and its commensurately limited responsibilities; which must always be construed in keeping with that original, controlling intent of The Framers and Adopters, subject only to amendment by the people of the Constitution. Congress may not tax and spend in support of activities in furtherance of abuse of any granted power or in support of usurpation of power not granted.

The Founders would assuredly have stressed these implied limits upon any power to tax incomes of the people--if granted by and constitutional amendment--in the absence of an express, specific and clear mandate from the people to the contrary stated in any such amendment, for instance if it should expressly authorize confiscatory taxes for war needs. Just as they certainly would have condemned any generation of Americans as being unfaithful to the American heritage of Man-over-Government, as being defaulting trustees of Posterity's just heritage, because of any submission to oppressive taxation amounting to tax-tyranny. This applies equally to taxation of accumulated wealth (savings), or property, by way of inheritance, or estate. taxes (death taxes), which are equally subject to the above-mentioned principles and implied limits.

The basic American principles previously discussed: "Limited and Decentralized for Liberty" (per Principles 5 and 6) would therefore, have been declared by The Founders to be respected and protected in effect and impliedly by pertinent, controlling limitations despite any income-tax, or any death-tax, provision in any amendment to the Constitution not expressly fixing a maximum rate or "ceiling." They would have agreed that the above-mentioned implied limits would nevertheless be applicable, though not made express, so as to bar unlimited taxing-power opening the door to tax-tyranny, tax-slavery.

Benjamin Franklin's Example

8. When government takes a part of an Individual's earned income, this is the equivalent of government's commandeering, or confiscating, for its own purposes a corresponding portion of his working time; he is deprived of the benefit, of the fruit, of such work and time. A taxpayer's time is employed in the service, or support, of government to the extent that be must devote it to earning the money required to pay the taxes imposed by government. Benjamin Franklin suggested a specific standard or rule by which to judge the character of taxation, presumably in peacetime (not in a national crisis of war), as to whether or not it is oppressive and beyond which the burden of taxation would, in his opinion, presumably have been considered oppressive, if not tyrannous. It was stated by him in a 1758 writing:

"It would be thought a hard Government that should tax its People one tenth Part of their Time, to be employed in its Service." (Emphasis his.)

(Maximum income-tax rate was only seven per cent under [the] 1913 law--the first under the Sixteenth Amendment.)

Under the American philosophy and system of constitutionally limited government, there is and always must be some limit, express or implied, as a standard beyond which the people may properly, indeed should, consider peacetime taxation to amount to impermissible confiscation and therefore oppression and tax-tyranny. Otherwise a mockery is made of the fundamental American principle of limited government. One general test which is unchallengeable, under a system of constitutionally limited government, is this: any and every aspect of taxation which is designed to provide financial support for any governmental activity which involves abuse of granted power, or usurpation of ungranted power, merits condemnation as tax-tyranny.

The Conclusion

9. It is a cardinal principle of the traditional American philosophy that taxes must be limited to safeguard Individual Liberty--to make and keep secure Man's unalienable rights and Posterity's just heritage of Liberty: Freedom from Government-over-Man.

Enough Is Enough! Speak out Against Tax Increases

Published on June 18, 2010 Factsheet #60

www.Heritage.org

Spending Is the Problem

• The deficit will reach a stunning $1.5 trillion this year. Even after the recession ends, trillion-dollar deficits will persist, causing the national debt to double by 2020.
• Excessive spending—not low revenues—accounts for 92% of deficits by 2014 and 100% by 2017.
• Solutions that “split the difference” between tax hikes and spending cuts doesn’t really address the source of the problem: spending.
• Social Security, Medicare, Medicaid, and interest costs will surge by nearly $2 trillion by 2020. By comparison, the cost of extending the 2001 and 2003 tax cuts is 85% less at $404 billion.

Tax Increases Are Not the Solution

• Raising federal income taxes to pay for entitlement spending would require rates to double by 2050 and continue to rise thereafter.
• Balancing the budget with tax increases alone would increase the tax burden from an average of 18% of the economy to 30% by 2055.
• Layering on a value added tax (VAT)—a new national sales tax—would create a huge drag on the economy and family budgets.
• A VAT would cause the price of everything to rise by 15–20%. By 2019, 44 cents of every dollar would go to the federal government, compared to 15 cents today.

Tax Hikes Have Harmful Economic Consequences

• Tax increases take money from families and businesses, lowering savings and investment and killing jobs. This is especially harmful in the current economic climate.
• Future generations—who can’t yet vote—will be stuck paying the higher taxes and inheriting lower standards of living that go with it.
• Any new federal income taxes would be on top of state and local taxes, such as income, property, excise, fuel, and sales taxes.
• A VAT would become a cash cow for Congress to fund new spending and open the door for continued, stealthy rate increases.
• Twenty of 29 developed economies with a VAT have increased rates since passage. Denmark leads, having increased their VAT from 15 to 25% since it was enacted.

Congress has been mismanaging taxpayer dollars for decades. Can Washington really be trusted to use new revenues to close the deficit gap, or would they just spend the money on new programs?

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