View RSS Feed

Anti Federalist

Why we are taxed so much

Rate this Entry
Quote Originally Posted by Anti Federalist View Post
Some interesting history.

Beardsley Ruml is the man who came up with the idea of income tax withholding during WW2 as a "temporary" wartime measure.

It worked so well in fleecing the people, and AmeriKunts, being idiots for the most part, were happy to see big fat "refund" checks show up every April, so there was, and has been, no real effort to repeal or remove income withholding policies after the end of the war.

I have said for years, that if you repealed income withholding and forced idiot AmeriKa to cut a check every month to Uncle Sucker, you may finally stir them from their torpor and lassitude into doing something about the situation of servitude and serfdom we are in, here in the land of the Free.

Ruml went on to become Chairman of the NY branch of the Federal Reserve.

In an article he wrote for the publication American Affairs, he writes how taxation is obsolete as a revenue generator, since the government and Federal Reserve can now print whatever money they need, and that taxation, especially under the policy of income withholding, should be instead instead for social engineering and wealth redistribution.

The United States is a national state which has a central banking system, the Federal Reserve System, and whose currency, for domestic purposes, is not convertible into any commodity. It follows that our Federal Government has final freedom from the money market in meeting its financial requirements. Accordingly, the inevitable social and economic consequences of any and all taxes have now become the prime consideration in the imposition of taxes. In general, it may be said that since all taxes have consequences of a social and economic character, the government should look to these consequences in formulating its tax policy. All federal taxes must meet the test of public policy and practical effect. The public purpose which is served should never be obscured in a tax program under the mask of raising revenue.

What Taxes Are Really For

Federal taxes can be made to serve four principal purposes of a social and economic character. These purposes are:

1. As an instrument of fiscal policy to help stabilize the purchasing power of the dollar;

2. To express public policy in the distribution of wealth and of income, as in the case of the progressive income and estate taxes;

3. To express public policy in subsidizing or in penalizing various industries and economic groups;

4. To isolate and assess directly the costs of certain national benefits, such as highways and social security.

Ruml used a "bait and switch" argument, convincing taxpayers that they were, in effect, going to get a one year tax holiday under his withholding plan.

But all that really was going is switching the timing of the payments.

Beardsley Ruml, however, emerged to challenge the Treasury. Chairman of the New York Federal Reserve Bank and treasurer of R.H. Macy and Company, Ruml had for several years been championing a wholesale shift to current collection, a "simple" change of the basis of tax to be paid from the past year to the current one. The effect would be a full year's tax forgiveness but an uninterrupted flow of funds into the Treasury: In Ruml's view, a fine result. What would happen, he asked in his pamphlet on the issue, if Americans "just started paying income tax, but on this year instead of on last year?"
After lengthy delay, the conference deadlock ended when Ways and Means Chair Robert Doughton changed his vote, allowing a compromise bill to emerge. The final version of the bill included a substantial tax forgiveness -- less than Ruml had sought, but considerably more than Treasury was willing to embrace. The Current Tax Payment Act of 1943, as passed by both houses and signed by Roosevelt on June 9, 1943, provided for current payment of all individual income tax liabilities and the cancellation of 75 percent of one year's existing taxes (the lower of either the 1942 or 1943 tax liability). Unforgiven liabilities were payable in two installments, one on March 15, 1944, and the other on March 15, 1945.

Historically, the acceptance of withholding and the debate over the Ruml plan are significant for two reasons. First, they reveal the extent to which Roosevelt and his administration used the tax system as a tool for social justice. Some historians insist that Roosevelt's efforts to use the tax system in this way were purely symbolic. The legislative and institutional history which surrounds the Ruml plan, however, demonstrates that Roosevelt and his tax specialists consistently opposed complete forgiveness because it would provide a windfall to the nation's wealthy while unfairly burdening the nation's poor.

Second, the withholding system that the Current Tax Payment Act of 1943 instituted "revolutionized the income tax." It made income taxation more responsive and flexible, and facilitated the conversion of the income tax system into a powerful fiscal policymaking tool. Moreover, as one legal historian has pointed out, it helped create a taxpaying culture, getting Americans "used to" regular deductions from their paychecks. In short, the introduction of withholding "ensured the status of the income tax as a major and massive revenue source."

And now you know a good deal about why you taxed so much, who was responsible, and how, between property taxation and income withholding taxation, you are no better off than a medieval serf, bound to tribute payments sent directly to your Lords and Masters before you even see the fruits of your labor, or manifesting itself in outrageous rents to the Shire Reeves on what you thought was your own land.