Why the Federal Income Tax Should Be Abolished ASAP

Glenn Beck hates Woodrow Wilson with a passion… and I’m not very fond of him either. After all, the man who got us into World War I and signed the federal income tax into law was either so power-hungry or henpecked (take your pick) that he allowed his second wife Edith to serve as de facto President for the final 18 months of his second term while he languished in bed following a debilitating stroke. Despite being physically – and perhaps mentally – incapacitated, Wilson then had the audacity to seek a third term in office but thankfully, cooler heads in the Democrat Party prevailed and he was denied the nomination in 1920.

Wilson, the only President who lived as a subject of the Confederacy, was also an avowed racist who packed his cabinet with segregationists and defended that abhorrent practice as "a rational, scientific policy". In private, Wilson was also known to tell racist jokes about black Americans.

Sounds like a pretty despicable human being to me!

Let’s revisit Wilson’s support of a federal income tax for a moment and see how he – and his Progressive counterparts in both parties including Theodore Roosevelt and William Howard Taft – are largely responsible for setting in motion a policy of fiscal confiscation by the federal government that has since taken on a life of its own.

First, we must consider previous taxes levied against American citizens and before them, American colonists. (Disclaimer: if you want to be spared the historical details, just skip down to the passage of the 16th Amendment in 1913.)

The Molasses Act of 1733 imposed a tax of 6 pence per gallon (equal to £5.24 today) on foreign molasses imported into British colonies. The purpose of the Molasses Act was not to raise revenue, but rather to make foreign molasses so expensive that it effectively created a monopoly for molasses imported from the British West Indies.

Unfortunately for the Brits, the colonists – demonstrating the same independent streak that led to the American Revolution – circumvented the molasses tax by smuggling the product from other countries and by bribing British officials.

The Sugar Act of 1764 reduced the molasses tax to 3 pence per gallon (equal to £2.24 today) in the hope that the lower rate would increase compliance and thus increase the amount of tax collected. However, all it did was anger the colonists even more.

The final straw was the Stamp Act of 1765, which required a British stamp on everything from real estate deeds to law licenses. Playing cards (a shilling per deck), dice (10 shillings per set), and newspapers and pamphlets (a penny per page) were also taxed. The uproar against the Stamp Act – along with the Townshend Acts of 1767 and the Tea Act of 1773 – stoked the revolutionary fires that led to the Revolutionary War.

That brings us to the Revenue Act of 1861, which was designed to help fund the Civil War at a time when the United States was still recovering from the Panic of 1857, the result of which was a $40 million budget deficit. The bill’s three-prong approach included raising certain import tariffs, implementing a newly instituted property tax, and levying a 3% flat tax on annual incomes over $800 (the equivalent of $27,129 in 2023). It was signed into law by President Abraham Lincoln but a year later, Congress passed the Revenue Act of 1862 which repealed the 3% flat income tax and replaced it with a progressive income tax that started at 3% for annual incomes over $600 (the equivalent of $18,312 in 2023) and maxed out at 5% for annual incomes over $10,000 ($305,200 in 2023 dollars).

The Revenue Act of 1862 also called for excise taxes on “luxury and sin” items including, but not limited to liquor, tobacco, playing cards, gunpowder, feathers, telegrams, iron, leather, pianos, yachts, carriages, billiard tables, and jewelry. Other taxed items included patented medicines, newspaper advertisements, stamp taxes, inheritance taxes, taxes on licenses for all services and professions (with the exception of clergy), and value added taxes (VAT) on manufactured goods and processed meats.

Regrettably, the Revenue Act of 1862 also established the Office of the Commissioner of Internal Revenue, the predecessor of today’s IRS.

Either the Civil War was becoming more expensive or the federal government was getting (and liking) its first taste of a guaranteed funding source… or both. What is readily apparent however, is that Washington’s craving for more and more income to satisfy its insatiable bureaucratic appetite was just beginning.

Just two years later, Congress passed – and President Lincoln signed – the Revenue Act of 1864 which raised income tax rates to the following levels: 5% on annual incomes from $600 to $5,000; 7.5% from $5,000 to $10,000; and 10% on annual incomes of $10,000 or more. The act also imposed stamp taxes (yes, the same kind that led to the American Revolution) on such items as matches and photographs.

Do you see where this is going? It’s like a snowball rolling downhill, gathering up as much additional mass as possible until it obliterates everyone and everything in its path.

Because the public considered the Revenue Act of 1864 to be an emergency measure enacted during war-time, it was allowed to expire in 1873. However, buoyed by the Supreme Court’s 1881 ruling in Springer v. United States that upheld the constitutionality of a federal income tax, Congress passed the Revenue Act of 1894 (also known as the Wilson-Gorman Tariff Act), which slightly reduced tariff rates but imposed a 2% income tax on annual incomes over $4,000.

A year later, SCOTUS modified its Springer decision in Pollock v. Farmers’ Loan & Trust Company, striking down the Wilson-Gorman Act because it was an unapportioned direct tax that violated the Taxing Clause in Article I of the U.S. Constitution.

That remained the law of the land until, following the ratification of the 16th Amendment in February 1913, Congress pounced and quickly passed the Revenue Act of 1913 just eight months later… and the aforementioned President Wilson signed it into law.

And thus it has been and thus it shall ever be – unless and until Americans stand up and speak out about the tyranny of a progressive income tax and the prolific (and wasteful) spending it creates by overfeeding an already bloated federal government.

For the first 85 years of American history, our federal government was funded mainly by tariffs, which had the dual benefits of protecting U.S. business interests while limiting the size and power of a centralized government. However, once the Supreme Court signed off on the legality of a federal income tax with no restrictions, it was “Katie, bar the door”.

And that, my friends, is why I believe we need to abolish the federal income tax “tout de suite”, which is French for immediately. Or as they say in my home state of New Jersey, “a week ago Tuesday”.

Yes, I realize that the federal government needs a constant and reliable source of revenue to fund our military, maintain our infrastructure, and meet our contractual obligations to seniors. However, I am 100% convinced that Uncle Sam has become a gluttonous boor who needs to be put on a crash diet for his benefit and ours.

In that spirit, I am calling for abolishing the federal income tax and enacting a FAIR Tax (otherwise known as a consumption tax) that simply taxes citizens when they spend money and doesn’t tax them when they don’t. Logically, wealthy people will spend more and consequently, they will be taxed more heavily. To ensure that the “little guy” isn’t hurt by this new tax structure, we can exempt certain necessities such as groceries, basic transportation, and energy costs.

Buy a loaf of bread and there is no tax. Buy a luxury car, a yacht, an RV, or a vacation home and you owe Uncle Sam a percentage of the purchase price.

A second alternative would be a Flat Tax that would collect a set percentage of a person’s annual income. No exceptions and no exemptions. Because 10% of $500,000 is more than 10% of $50,000; people with higher incomes would pay substantially more.

Best of all, since there would be no deductions or refunds, there would be no need for the IRS to have 90,000 employees and a $15 billion budget. Just hire a few hundred people to process the money as it comes in… period.

I think our Founding Fathers would like that idea very much.