Wednesday, October 22, 2008

1913: When Socialism Was Ratified

Since the GOP can't stop with this socialism nonsense, I thought I'd quote the 16th Amendment to the United States Constitution

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.

You can read about the amendment's history here. The jist has to do with Article I, Section 2 of the Constitution, which is primarily about the U.S. House of Representatives. It includes this language:
Representatives and direct Taxes shall be apportioned among the several States which may be included within this Union, according to their respective Numbers
If the income tax was a direct tax, then it had to be paid in proportion to states' populations. The 16th amendment allowed the feds to collect income taxes without regard to state populations. Insofar as the amendment does not declare a flat tax the only constitutional income tax, it also allows for progressive income taxation.

Indeed, here's what the U.S. Treasury's website says about the income tax enacted immediately after ratification:
By 1913, 36 States had ratified the 16th Amendment to the Constitution. In October, Congress passed a new income tax law with rates beginning at 1 percent and rising to 7 percent for taxpayers with income in excess of $500,000. Less than 1 percent of the population paid income tax at the time. Form 1040 was introduced as the standard tax reporting form and, though changed in many ways over the years, remains in use today.
In sum:
  1. The income tax has its own amendment to the U.S. Constitution.
  2. The Congress in office at the time enacted a system of progressive marginal income tax rates.
  3. Today's Republicans believe a progressive marginal income tax system is socialism.
  4. Therefore, today's Republicans must believe that the legislatures of 36 U.S. states and the U.S. Congress of the teens were.....SOCIALISTS!
It's that simple. 

1 comment:

Gerald said...

If socialism is merely defined as redistribution, then any tax system that does not follow Lindahl principles (benefit principle) is socialism. Even a flat tax could be socialism because if you assume the benefit of national defense goes to everyone equally, then Bill Gates shouldn't be paying more than Joe Six Pack. A flat tax has Gates pay more $. Note that this ignores the possibility that the redistribution in itself is a public good that benefits people and thereby would align with Lindahl principles.

If socialism is defined as government controlling the allocation of any resources, then we are there. But it really means nothing. It's just a matter of degree: how much of the resource allocation is government doing through tax, spending, and regulatory policies? It's always going to be greater than zero.