«Liberté! Sauvons la liberté! La liberté sauvera le reste!» Victor Hugo.

21/08/2007

The Income Tax: Root of All Evil


The american political terrain, so to speak, is most favorable for a fight for freedom. The tradition of home rule, supported by the constitutional doctrine of States’ Bights, presents a formidable obstacle, if properly exploited, to the forces of collectivism. We have their own admission to that fact.

Early in the socialistic New Deal, its leaders recognized in the division of authority between state and federal governments a difficult impediment to their plans. They set their minds on overcoming it. They went so far as to draw up a blueprint for an arrangement that would circumvent, if not obliterate, the troublesome state lines. In 1940, Mr. Roosevelt’s National Resources Committee, in a report called Regional Factors in National Planning, proposed that the nation be divided into a dozen regional areas, as a basis for the coordination of federal administrative services. Recognizing that what they proposed was actually violative of the Constitution, they hastened to give assurance: the regional system, they said, "should not be considered a new form of sovereignty, not even in embryo." It would have been foolish to say anything else, since the consolidation of the states into a national unit requires, under the Constitution, the joint action of Congress and the state legislatures. Nevertheless, the report was a bid for a nationalized system, pure and simple. The committee insisted that so long as the "division of constitutional powers remained," the government is handicapped in handling "national problems." In those days the inspired propaganda insisted that the states were "finished."

Thus, the collectivists are on record as to their tactical campaign: the separate states must be wiped out or reduced to parish status. Later, they veered from a direct frontal attack on our traditional system, and went in for liquidation of state autonomy by bribery of state officials.

When you dig down to the psychology of our States’ Rights tradition you see the soundness of the collectivists’ tactics. The legal difficulties that the division of authority presents is not their main trouble; these can be circumvented by new laws, political deals, and judicial interpretations.1 The real obstacle is the psychological resistance to centralization that the States’ Rights tradition fosters. The citizen of divided allegiance cannot be reduced to subservience; if he is in the habit of serving two political gods he cannot be dominated by either one.

History supports the argument. No political authority ever achieved absolutism until the people were deprived of a choice of loyalties. It was because the early Christians put God above Caesar that they were persecuted, even though they paid homage and taxes to the established political establishment. Stalin’s liquidation of the religious and fraternal orders followed from his basic premise that the Soviet was the only deity. Mussolini was always bothered by the hold the Catholic Church had on the people, and Stalin would never have been Stalin if he had not brought the orthodox church to foot. And so, if the Californian thinks of himself as a Californian as well as an American and has two flags to support his contention, the central authority rests on shifting ground.

In no country where centralism got going did the regime have to contend with divided authority such as our Constitution provides. Long before Hitler came on the scene, Bismarck had liquidated the autonomous German states. Mussolini’s march on Rome would not have gotten started in the nineteenth century when Italy was an aggregation of independent units. And, of course, the Czars handed Lenin a thoroughly centralized government.

In this country, the advocates of centralism have had hard going because of our entrenched tradition of States Rights. It is a tradition that is older than the Constitution, older than the Revolution. It is a national birthmark.

The people of the recently liberated British colonies had had their fill of unlimited government. If they were going to have any national government at all it would have to be quite different from the one they had kicked out. They would put their trust in a government of neighbors, for that kind of establishment could be watched and handled. They were for Union, of course, for by Union they had done away with the foreign tyrant, and they wanted something that would correct the imperfections in the Union they had. They sent delegates to the Philadelphia Convention to correct these imperfections. But they did not want Union at the cost of government resembling in the least that which they had discarded.

When the Convention came out with a brand-new Constitution, not improved Articles of Confederation, as expected, the people were suspicious of it. Ratification of the Constitution came hard, and was not effected without some sharp political practices. In the antiratification literature of the day, long buried by federalist historians, the main theme was that the proposed government might intervene in local affairs and in their private affairs. Their touchiness on that point is reflected in the very composition of the Constitution. The Founding Fathers were very careful to make clear that the new federal government would have certain specified powers, and nothing more.3 Whatever powers were not enumerated in the Constitution would remain with the states. No other kind of Constitution could have got by.

One must go to pre-Revolutionary history for the legal origins of States’ Rights, but it is sufficient for the present argument to show that it is an essential Americanism, a bit of folklore learned at the nation’s cradles. Both the Founding Fathers and the opponents of the Constitution were agreed on the principle of divided authority as a safeguard of the rights of the individual. No one (except a few monarchists) questioned that. The only question was whether the separation was definite enough. It is unfortunate that the doctrine of States’ Rights has become sullied with sectionalism and racism, and its original meaning lost in the bitterness of other issues. Perhaps the name should be dropped in favor of "home rule"; but the essential point, that divided authority is the bulwark of freedom, is still sound Americanism, and ought to be exploited to the full. It can be invoked in a fight to repeal the Sixteenth Amendment.

But why is the case of freedom stronger when the autonomy of the states is inviolate? There is no vice in the national government that cannot be duplicated in the government of a subdivision; even county sheriffs have been known to take liberties with the rights of citizens. If we were living in forty-eight separate nations our lot, as individuals, might be worse; it probably would. Some people, using Switzerland as example, maintain that the smaller the nation the more freedom. But the Central American dictatorships refute that argument. The characteristic of the Swiss government that is often overlooked is the division of authority between the federal establishments and the cantons. That is the essential ingredient: only when the central authority is kept off balance by competition from autonomous subdivisions are the rights of citizens more secure.

Freedom is the absence of restraint. Government cannot give freedom, it can only take it away. The more power the government exercises the less freedom will the people enjoy. And when government has a monopoly of power the people have no freedom. That is the definition of absolutism-monopoly of power.

The object of monopoly, in any field, is to compel the customer to accept the services offered by the monopolist at his own terms. It is a take-it-or-leave-it arrangement. Competition, on the other hand, compels the servicer to meet the standards set by his competitors, with the customer the final judge as to proficiency. The beneficiary of competition is the buyer. In the matter of government services-which is the protection of life and property-the customer is the citizen.4 The government will serve him best only if it cannot set its own standards, when it does not enjoy a complete monopoly of power.

This brings up a contradiction. The theory is that government must have a monopoly of coercion to prevent us from using coercion indiscriminately on one another; we institute government, and endow it with sole police power, for the purpose of maintaining order. Nevertheless, experience has shown that the monopoly we give government can work for disorder; the power can be used to create disharmony and promote injustice. That, in fact is the record. Throughout history, those to whom the job of rulership has fallen, whether by heredity or popular selection, have shown a tendency to use their position to dominate, not serve, the ruled. Hence, unless the monopoly of power can be checkmated, freedom is always in danger.

Recognition of that fact gave rise to the idea of constitutional government, with limited powers. And as further restraint on government, popular suffrage was instituted. The vote is presumed to keep the government from getting out of hand; the threat of being turned out at the next election is supposed to hold down the arrogance and ambition of those in whom the power is vested. However, during its incumbency the elected government does enjoy a monopoly position, and it can use that position to solidify, enlarge upon, and perpetuate its power; it can even use the citizens’ tax money to "buy up" the next election, either by bribery or by propaganda.

Popular suffrage is in itself no guarantee of freedom. People can vote themselves into slavery. The only way, then, to prevent the monopoly of power from becoming absolute is to create a competitive market for government; to give the citizens, the customers, a choice of jurisdiction. That is exactly what our peculiar American system of divided authority, between states and federal government, accomplished. The Constitution, as originally conceived, set up independent nations within an independent nation-imperium in imperio-each with delimited powers. In that way, it was hoped, the polarization of power that undermines freedom would be prevented. The central government was given certain specified chores to do; it could not intervene in local affairs, unless the state governments were not able to maintain order. If the state government got rough with its customers, they could easily transfer their allegiance to another state.

This division of powers established the nearest thing to competition in government the world has ever known. As long as it held up, or until the federal government invaded the state lines (though the powers it acquired under the Sixteenth Amendment), the American citizen was as free as it is possible to be in organized society. Except with excise taxes, or during war, the central government never annoyed him. Sometimes the state governments went in for political innovations, including socialism, that violated his freedom. But they did not get far with these schemes, simply because the citizen could march off to a state more to his liking, or immigration from other states was discouraged; no government likes to lose taxpayers.

Thus, before the Prohibition Amendment, several states and localities went in for this kind of sumptuary legislation. This was indeed an invasion of individual rights, but it never amounted to much more than a nuisance. There was no monopoly of power behind it. The citizen could and did import liquor from contiguous territory, or manufactured his own. Until the prohibitory power was monopolized by the federal government, so that escape was fraught with danger, the individual’s right to make a drunken fool of himself was not effectively infringed by state laws.

From the very beginning the states had the power to impose income taxes and a number of them exercised it. None of these states ever went as far as the federal government has gone, and for obvious reasons. In the first place, the neighborly relations between local tax collectors and taxpayers made for evasion of this infringement of property rights; the state governments could not import "foreigners" from Washington to do the unpleasant work. Then, the local politician is more sensitive to the likelihood of retribution at the polls than is the national politician, and he knows that nothing will stir up the people more violently than excessive taxation. Most important is the fact that, other things being equal, capital, without which production is impossible, is attracted to areas where low tax rates obtain; it was regular practice, before the Sixteenth Amendment, for chambers of commerce to advertise the freedom from income taxes in their states as an enticement to industry, and it was not unusual for men of means to migrate to those states that did not tax inheritances. Running away from taxes is an ancient custom, and no state government wants to see its area depopulated. For these reasons some of the states dropped their income taxes, and none of them went in for oppressive rates.

Sometimes it is urged that we federalize our divorce laws, which would indeed be an invasion of our personal lives. So long as there are different legal jurisdictions covering divorce, the morality of it is left where it should be, in the conscience of the parties involved. A federal law would not prevent the breaking of conjugal ties, but if it were stringent enough it would certainly encourage the practice of living together out of wedlock, with a consequent increase of illegitimacy. Thus, immorality would be multiplied, as every law to eradicate it does. The more affluent would migrate to other countries to effect their purpose. More important, from the viewpoint of freedom, a federal law would put upon us another flock of enforcement agents, snoopers, and bribe takers.

Right now there is an urgency to have the federal government eradicate by forcible means the stupidity of racial and religious bigotry, particularly in employment practices. This is another example of the fatuous undertaking to make men "good" by law-the socialistic program. It cannot be done. A "fair employment practices" law can only result in intensifying bigotry, by concentrating attention on it. A New York State law of that kind has done nothing more than stimulate the ingenuity of employers and employment agencies to invent methods of evasion; discrimination is as prevalent as ever. But if the federal government is given the power of a "fair employment practices" act, we can expect an army or corruptible police swarming all over our national industry. That is not freedom.

As long as anything is left of our tradition of States’ Rights, the danger of absolutism in this country can be avoided. In fact, it is that tradition that must be depended upon in any effort to repeal the Sixteenth Amendment.

» Este texto faz parte do capítulo IX (Competition in Government) do livro que dá o título a este post, escrito por Frak Chodorov (lista de alguns de seus artigos).

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