Income Tax: A creature of war
An income tax (from the Latin taxo) is a mandatory financial charge imposed upon an individual’s personal annual income by a governmental organization in order to fund various public expenditures.
Income tax was invented and used for the first time in recorded history by the Greek Empire. In times of war the Athenians imposed a tax referred to as eisphora. No one was exempt from the tax which was used to pay for special wartime expenditures. The Greeks are one of the few societies that were able to rescind the tax once the emergency was over. When additional resources were gained by the war effort the resources were used to refund the tax.
Athenians imposed a monthly poll tax on foreigners, people who did not have both an Athenian Mother and Father, of one drachma (the basic monetary unit of Greece until the introduction of the euro) for men and a half drachma for women. The tax was referred to as metoikion.
Around three millennia later and in order to help pay for its war effort in the American Civil War, Congress imposed its first personal income tax in 1861. It was part of the Revenue Act of 1861 (3% of all incomes over US $800).
The Tax Act of 1862 was passed and signed by President Lincoln July 1 1862. The rates were 3% on income above $600 and 5% on income above $10,000. The rent or rental value of your home could be deducted from income in determining the tax liability. The Commissioner of Revenue stated “The people of this country have accepted it with cheerfulness, to meet a temporary exigency, and it has excited no serious complaint in its administration.” This acceptance was primarily due to the need for revenue to finance the Civil War.
It should be noted that the Tax Act of 1864 was challenged several times. The Supreme Court unanimously supported the tax. After the war the tax was declared unconstitutional by the same court because it represented direct taxation on the citizenry which was not allowed under the constitution.
During the 1930’s federal individual income taxes were never more than 1.4 percent of GNP. Corporate taxes were never more than 1.6 percent of GNP. In 1990 those same taxes as a percent of GNP were 8.77 and 1.99 respectively.
The U.S has come a long way, of course, since those humbly low income tax rates. According to taxfoundation.org: Every year, the IRS adjusts more than 40 tax provisions for inflation. This is done to prevent what is called “bracket creep.” This is the phenomenon by which people are pushed into higher income tax brackets or have reduced value from credits or deductions due to inflation, instead of any increase in real income.
In 2017, the income limits for all tax brackets and all filers will be adjusted for inflation. The top marginal income tax rate of 39.6 percent will hit taxpayers with taxable income of $418,400 and higher for single filers and $470,700 and higher for married couples filing jointly.
Income taxes came into this world as creatures of war, but these vile creatures were conditioned to disappear with the passing of each war. In this day and age, however, people became accustomed to these taxes as the “way of life.” It has been perpetuated by the biblical doctrine where it’s written: “For he is God’s minister, an avenger to execute wrath on him who practices evil. Therefore you must be subject, not only because of wrath but also for conscience’ sake. For because of this you also pay taxes, for they are God’s ministers attending continually to this very thing. Render therefore to all their due; taxes to whom taxes are due, customs to whom customs, fear to whom fear, honor to whom honor.” — The Holy Bible, New King James Version.
People of the world seem to have forgotten that the way of life can be free and beautiful and governments will still be able to operate without these income taxes, just like the way they used to.
Humanity has witnessed in the past century death and destruction around the world on a massive scale like nothing seen before due to the enormous amounts of money pouring into weaponry development to make weapons of mass destruction that are ever more destructive and lethal.
Global defense spending in on the rise, according to the latest report by the Stockholm International Peace Research Institute (SIPRI). In total, countries around the world splurged $1.686 trillion on arms in 2016, a 0.4 percent increase on 2015.
The United States remains at the top of the military spending league with $611 billion spent last year. That’s 36 percent of the global total and over three times the amount spent by second-placed China. Russia upped its outlay 5.9 percent to $69.2 billion, third overall, according to the Swedish think tank.
“Of all the enemies to public liberty war is, perhaps, the most to be dreaded because it comprises and develops the germ of every other. War is the parent of armies; from these proceed debts and taxes … known instruments for bringing the many under the domination of the few.… No nation could preserve its freedom in the midst of continual warfare.”
— James Madison (4th U.S. President), Political Observations, 1795
There will not be another war if all nation-states of the world didn’t have the money they need to fund it.
War is expensive. When you stop funding it, it will naturally disappear.