Individual Rights, Taxation and the Proper Role of Government

By C. Bradley Thompson

How shall government in a free society raise revenue to pay for its legitimate functions and services? This question has long vexed Americans, and their answer to it has changed dramatically over time.

How one thinks about taxes depends more fundamentally on how one thinks about the nature and purpose of government which in turn depends on how one thinks about the rights of individuals. Taxation is a social barometer measuring the degree to which a society is prosperous or poor, free or enslaved, good or evil.

In the 18th and 19th centuries, Americans had a very different conception of government than we do today. At the time of the American Revolution, the American people believed that the sole purpose of government was the protection of individual rights - the rights to life, liberty, property, and the pursuit of happiness. Various attempts by the British Parliament during the 1760s and '70s to tax the colonists without their consent provoked the Americans to revolt, to declare their independence from Great Britain, and to develop a radically new conception of government founded on the moral principle of man's rights.

American Revolutionaries understood "rights" to mean freedom from the arbitrary initiation of physical force, which means the right and the freedom to act in order to acquire, possess, use and trade property. The Founders thought it right that a man be free to choose and pursue the actions necessary to support his life; they thought it right that he keep the property that he has created to support his life, and they thought it right that he benefit from and enjoy the fruits of his labor.

Building on that moral foundation, America's Founding Fathers created a revolutionary political system that institutionalized the protection of each and every individual's rights as the only proper moral purpose of government. The Framers of the Constitution took great pains to create a government of limited powers, including if not most especially, limits on the government's power to tax. Not one Founding Father thought the federal government (or any government for that matter) should have the power to tax at will.

The Founders understood that the taxing power is one of government's most potentially abusive powers, and so they took steps to limit and control its reach. Most importantly, they set up constitutional controls over both taxing and spending. The primary control on excessive taxation came in the form of limitations on Congress's spending power. The proper functions of government created by the Constitution of 1787 were mostly limited to national defense, internal police, and a system of courts. Limited spending meant limited taxes.

In his First Inaugural Address, Thomas Jefferson summed up the Founders view of government and the basic political-economic principles of the American creed in these terms:

A wise and frugal government, which shall restrain men from injuring one another, which shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government.

Under the Founders' constitution, taxes were limited to duties on foreign imports and the occasional sales tax on things such as alcohol, carriages, sugar and tobacco. This view of the relationship between rights, limited government and taxes lasted for well over a hundred years.

The Founders' system of natural liberty allowed each man to choose his path in life, to run his life as he saw best fit, to reap what he sowed confident that the fruits of his labor would not be taken from him and given to someone else, and to rise as high as his ability would take him. Shockingly (at least to us in the 21st century), such men lived without government officers, inspectors, regulators and social workers. They lived without welfare, Medicare, Medicaid, social security, regulatory agencies such as the FDA, SEC, FCC and government schools, which means they lived virtually free of taxes.

The free society created by our Founding Fathers was dramatically altered in 1913 with the passage of the Sixteenth Amendment and the introduction of the progressive income tax.

At the heart of the progressive income tax is the Marxian moral principle, which says: "From each according to his ability, to each according to his need." In other words, the progressive income tax tells working Americans that they have a moral duty to work for those who don't.

In 2008, Americans stand at a great distance from those daring Revolutionaries who rebelled against Great Britain's tyranny of taxation. Our Federal Tax Code runs to 66,000 pages and Tax Freedom Day (the day in the year when one stops working for the government and gets to keep what is earned) has moved from January 22 in 1900 to April 23 in 2008. This means that most Americans spend almost four months a year working full-time for the government. Surely the Founding Fathers would have thought a progressive income tax the harbinger if not the very definition of tyranny and enslavement.

In this election year, we might ask our politicians to tell us why we should think them wiser and more just than Thomas Jefferson and John Adams.

C. Bradley Thompson is the Executive Director of the Clemson Institute for the Study of Capitalism, Professor of Political Science at Clemson University, and the author of the award-winning John Adams and the Spirit of Liberty.
 

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