Taxes in America
By Bob Barney
Here is my promised treatise on the way taxes ought to be raised by the federal, state and local governments. My ideas will shock many, and even more will think that they don't work, but ironically most of these ideas DID work in the past. Read my ideas and think about them... Please post your ideas.
A short history of taxes:
Egyptian Pharaohs, like modern leaders had tax collectors known as scribes. In the course of time, the scribes imposed a tax on cooking oil. To ensure that citizens were paying the cooking oil tax scribes would audit homes to ensure that proper quantities of cooking oil were consumed and that people were not using yeast and other leavenings generated by other cooking processes as a substitute for the taxed oil.
The earliest taxes in Rome were customs' duties on imports and exports. Caesar Augustus was considered by scholars to be the most clever tax strategist of the Roman Empire. During his reign, the earlier taxes were virtually eliminated. Augustus instead made the cities that were given the responsibility for collecting taxes. Augustus established an inheritance tax to provide retirement funds for the military. The tax was 5 percent on all inheritances except gifts to children and spouses. The English and Dutch referred to the inheritance tax of Augustus in developing their own inheritance taxes. During Julius Caesar's reign, a 1 percent sales tax was imposed. During the time of Caesar Augustus, the sales tax was 4 percent for slaves and 1 percent for everything else.
God had a simpler tax plan based on income. Everyone was ordered to pay a “tithe” or 10% of the increase of their wealth, be it in animals or anything of value. For example, if you had 100 sheep one year and next year had 150, then your increase was 50 sheep, in which 5 of them were to be given to the Temple or the priests as your tax. That paid for all social welfare and religious expenses. Kings often levied taxes on goods and services, as well as tariffs on imports. A governments greatest wealth was probably from the plunder of their enemies more than taxing their own population which was never popular!
The first income tax suggested in the United States was during the War of 1812. The tax was based on the British Tax Act of 1798 and applied progressive rates to income. The rates were .08% on income above £60 and 10 percent on income above £200. The tax was developed in 1814 but was never imposed because the treaty of Ghent was signed in 1815 ending hostilities and the need for additional revenue.
Property taxes were a hand down from England. In 1796 seven of the fifteen states levied uniform capitation taxes. Twelve taxed some or all livestock. Land was taxed in a variety of ways, but only four states taxed the mass of property by valuation. No state constitution required that taxation be by value or required that rates on all kinds of property be uniform. In 1818, Illinois adopted the first uniformity clause. Missouri followed in 1820, and in 1834 Tennessee replaced a provision requiring that land be taxed at a uniform amount per acre with a provision that land be taxed according to its value (ad valorem). By the end of the century thirty-three states had included uniformity clauses in new constitutions or had amended old ones to include the requirement that all property be taxed equally by value. A number of other states enacted uniformity statutes requiring that all property be taxed. Table 1 summarizes this history.
Table 1 Nineteenth-Century Uniformity Provisions
(first appearance in state constitutions)
*Indicates amendment or revised constitution.
1. The Tennessee constitution of 1796 included a unique provision requiring taxation of land to be uniform per 100 acres.
2. One thousand dollars of personal property and the products of the soil in the hands of the original producer were exempt in Tennessee.
3. The Michigan provision required that the legislature provide a uniform rule of taxation except for property paying specific taxes.
4. Except for taxes on slaves.
5. Nevada exempted mining claims.
6. One provision in Idaho requires uniformity as to class, another seems to prescribe uniform taxation.
Source: Fisher (1996) 57
God has the best tax plan in His coming theocracy, namely an income tax based on increased wealth. A flat income tax. Out of that, all monies are raised. Every several years a second “tithe” is also to be levied. I'll leave this for a later time. The United States is not a theocracy. We are a democratic republic, a fact most overlook or don't know. My ideas have some, but not mainly early American thought behind it. I believe that what you own is yours, and thus, except for God, can not be taxed by any secular government. After all, if you own it, then the government has no right to tax it! They can only tax the things you use that THEY own. And they own plenty. In fact, they own far more than any company or person could ever wish for.
Local and state governments:
Towns and cities should arrive their taxes as use taxes. They own the roads. Whatever they spend each year on roads should be levied equally among the townspeople. Any state roads, would be under the state control and they levee taxes either by tolls or an equally shared state road tax. In modern America, the simplest way to do both town and state tax would to have a gasoline (fuel) tax were all the monies needed are collected. The Federal government COULD NOT collect a gasoline tax. The tax rate would vary from year to year. Schools again can raise their tax money in 2 ways. Each student pay a tuition, and again a local and statewide tax school tax based on retail purchases (a sales tax). This state sales tax could fund everything that a state needed. Again the rate would vary from year to year. Income taxes would be abolished at the local, state and federal level.
The Federal Govt:
The USA should raise all the money that they need to operate on usage taxes, tariffs and fees collected from the states for the armed forces and national defense. All Federal highways should be taxed by the mile and by the axle. This could be done in 2 ways, decided by Congress. A national sales tax on gasoline (which I would not favor) or tolls on the highways using GPS data, or for those who want to protect their privacy, a yearly highway use tax at the maximum rate per vehicle. This means, if you don't want to itemize you mileage, the government will charge a very high flat fee to use their highways without proving your mileage. This would be similar to the standard, versus itemized deduction. The federal government should spend no money on welfare, schools or anything in which the states have the obligation to provide.
More money could be collected from tolls for using parks, public lands, public oil leases, the waterways and seaports. China would be paying a port tax on every ship they send over here.
I know there are flaws, and much more investigation is needed, but if we are to stay as the #1 powerhouse in the world, we have to reevaluate taxation, welfare, social security and medical coverage. If most taxes were abolished, the wealth of individuals in this country would go through the roof.
What's your ideas?