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Hockessin Community News
  • Income Tax: a century of class warfare

  • When you drop that envelope in the mailbox, think of how the income tax has made solving Washington's problems so much harder.
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  • Monday isn't just any income tax deadline. It ends a century of income taxes in the United States. Think of it as putting the bracket on a parenthesis that ends the first chapter of a never-ending experiment in class warfare.
    If that doesn't make you feel happier as you drop that envelope in the mailbox or hit the send button, nothing will.
    You're certainly not likely to be smiling at the thought that the more than $2 trillion the government will collect today won't come close to covering what it spends. Nor are you likely to skip to the mailbox knowing the process of filing your return was easy.
    The tax code now includes about 4 million words, and Americans annually take more than 6 billion hours, combined, to do the paperwork.
    The only possible reason to brighten up tomorrow may be the realization that the automatic budget cuts known as "sequestration" have hit the IRS just as hard as other government agencies.
    But then, that probably won't reduce your chances of being audited. It's more likely to lengthen the time it takes to receive your refund.
    Is this what those esteemed politicians of 1913 had in mind?
    I don't know, but they should have known what they were getting into.
    The income tax has always been about taxing the rich. When the Lincoln administration first got Congress to impose one to cover the expenses of the Civil War, it had started with a top rate of 3 percent. Within two years, that rate was at 10 percent. One can almost imagine the calls for the wealthy to pay their fair share. That tax disappeared in 1872, which says a lot about 19th century sensibilities, but it was never far from mind, returning in 1894 until the Supreme Court found it unconstitutional.
    I spent about an hour this week with the mayor of Mesa, Ariz., Scott Smith. He came to the Deseret News editorial board as head of a group called Fix the Debt, which is urging a bipartisan solution to the nation's mounting fiscal crisis. The group is championed by Alan Simpson and Erskine Bowles, co-chairs of the group President Obama commissioned, then ignored, during his first term.
    As we talked, it became clear to me that two mountainous obstacles stand in the way of politicians in Washington getting something meaningful done.
    One is that the nation is becoming increasingly polarized. Only a small percentage of congressional elections each year are competitive. Most are dominated by one party or the other, meaning that the people elected tend to represent the extreme voices in their parties.
    The other is the tremendous pressure put on Washington by special-interest groups, and often these are tied to one or another of the many deductions, credits or breaks provided for in the income tax.
    Page 2 of 2 - Smith told of how Mesa had to deal with huge deficits when he assumed office at the height of the great recession. He and his city council were able to decide on a path forward, setting politics aside, in part because they didn't face pressures from those interests.
    As with other officials I've spoken with lately, he and the Utah politicians with him said everyone in politics knows what must be done to save the nation fiscally, but it will take political courage no one seems to possess.
    And part of what is needed is real tax reform.
    Back in 1913, the Wall Street Journal carried a headline that said, "Confusion over income tax is now worse confounded," as lawmakers argued over what ought to be considered income and whether certain things should be deductible.
    If they only knew.
    While defenders of the income tax are correct to note the world has yet to invent a popular tax, and while it is possible Washington would have made overspending a habit even without the 16th Amendment, it seems evident that Washington's problems, and its ability to solve those problems, are a lot more complicated because of it. The income tax has divided us by salary and wealth in ways difficult to overcome.
    That's a lot to consider as you seal up that envelope.%3Cimg%20src%3D%22http%3A//beacon.deseretconnect.com/beacon.gif%3Fcid%3D68745%26pid%3D46%22%20/%3E
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