Common Sense in Government, the Federal Individual Income Tax

Americans have a love hate relationship with taxes. The government loves to tax, citizens hate to pay taxes. This dates to the earliest days of the nation. Perhaps best demonstrated by the Boston Tea Party. Our founding fathers were strongly set against granting the federal government the powers to tax individuals. This lasted until 1862, when an individual income tax was imposed to fund the Civil War. This tax (the Revenue Act of 1862) was repealed by Congress in 1872 (National Archives, 2022). A second attempt at individual income tax was included in the tariff bill of 1894 (ibid). This portion of the bill was ruled unconstitutional by the Supreme Court in a five-four decision (ibid). A third attempt at an individual income tax was proposed in 1909 as part of another tariff bill. As a compromise move, it was suggested that an amendment be made to the Constitution to allow the federal government to tax individuals. On February 25, 1913, this bill was ratified and became the sixteenth amendment to the Constitution (ibid). Thus, the nemesis of every American was created. Although the organization was established in 1861 as part of the original income tax bill. In true bureaucratic form, although the ability to tax individuals ended in 1872, the organization, then known as the Bureau of Internal Revenue, remains to this day but now known as the Internal Revenue Service. Having a name change to the Internal Revenue Service in 1953 by Treasury Decision 6038. Congress has been trying to get the US Tax Code right ever since. Many would say that it has not been right ever. The individual income tax generates over half of the revenue overseen by the IRS according to IRS records (approximately 3 trillion dollars) (Internal Revenue Service, 2023). Little known by most Americans is the fact that the IRS employs around 2100 Special Agents to conduct criminal investigations of tax crimes (Internal Revenue Service, 2023). These special agents are armed, have deadly force authority, have arrest powers, and have investigative powers. The fiscal year 2023 Annual Budget request was for 20.64 BILLION dollars (Internal Revenue Service, 2023) or a 25% increase over the FY23 budget request (ibid, p.3). The US Tax Code is two volumes at total of 2,652 pages (Tax Foundation, 2023).

Our founding fathers feared a too powerful central government with too much control over the citizens. They were right. President Regan was right; the American citizen can figure out how to spend their own money better than the government. It is time to eliminate the individual income tax from the federal government. As an alternative let’s try a national sales tax. Eliminates a lot of government waste and bureaucracy. A simple two cent sales tax on all goods and services except unprepared food, prescription medicine, and medical procedures. Everyone gets to pay their fair share. The rich buy more and more expensive items, the rich get to pay more than those less fortunate. Even criminals make legitimate purchases, so criminals get to pay. We don’t have to waste time and money doing tax returns. Income tax cheating goes away. Fewer crimes to investigate, criminals to prosecute, and prisoners to house. Saves money. By letting the states collect the sales tax in the state collections systems, even more efficiency and effectiveness can be realized. By letting the states keep 50% of the collected revenues, the states get a windfall and other federal funding to states could be reduced or even eliminated. Just a thought.

Works Cited

Internal Revenue Service. (2023, March 29). Criminal Investigation (CI) At-a-Glance. Retrieved January 7, 2024, from Internal Revenue Service: https://www.irs.gov/about-irs/criminal-investigation-ci-at-a-glance

Internal Revenue Service. (2023, October 13). Internal-Revenue-Service-FY-2024-CJ Publication 4450 Revision 2-2023. Retrieved January 7, 2024, from Internal Revenue Servicce: https://www.irs.gov/pub/irs-pdf/p4450.pdf

Internal Revenue Service. (2023, April 14). SOI Tax Stats - IRS Data Book. Retrieved January 7, 2024, from Internal Revenue Service: https://www.irs.gov/statistics/soi-tax-stats-irs-data-book

National Archives. (2022, September 13). 16th Amendment to the U.S. Constitution: Federal Income Tax (1913). Retrieved January 7, 2024, from 16th-amendment: https://www.archives.gov/milestone-documents/16th-amendment

Tax Foundation. (2023, December 1). How Many Words in the US Tax Code. Retrieved January 9, 2024, from US Tax Foundation: taxfoundation.org/blog/how-many-words-are-tax-code/