Tuesday, September 25, 2018

Senator Obama Declares War On Privacy; Republicans Shrug

by GreatMinds (writer), Huntsville, Alabama, May 16, 2007

The leading indicators on economic privacy took a hit last week when Senator Barack Obama (D. - Illinois) promised in a presidential campaign speech that he would roll back the "Bush tax cuts" and inc

Senator Obama justified the tax-and-spend tactic on the wealthy because, as he said, the wealthy do not need the money as much as middle class people do and can better afford to pay the higher taxes.

Federal tax policy has not historically developed around the wealthy's need for their money. In fact, the entire "pay their fair share" theory of graduated income taxation was never based on need; the fairness issue was rooted in comparative ability to pay. In 1895, the United States Supreme Court struck down a law that would have imposed a two percent annual income tax on personal incomes in excess of $4,000.00 because it was a "direct tax" in violation of the Constitution. The successful arguments of the victor in the 1895 case (a New York bank) were, in part, that the tax unfairly confiscated income from the wealthy. The Court's ultimate disposition of the case was most profoundly influenced by the idea that an income tax was an invasion of private property rights.

Income tax proponents, however, found their grounds to circumvent that idea: institute an income tax that would not be left in the "direct tax" cold by resorting to "ability to pay" rationale. That rationale, at the outset in reaction to the 1895 case, was simply to tax people at the level they could afford to pay. In 1913, the question was mooted by the adoption of the 16th Amendment that authorized Congress to levy an income tax. Against that new power, the "ability to pay" rationale was no longer needed, at least until after World War I took its toll on the nation's coffers, the burgeoning economy of the 1920's generated never-before seen revenue levels, and the post-war/booming growth era sharpened partisan politics about what to do with all that money that was rolling into Washington. Cuts in tax rates spurred even more revenue growth, but favored certain interest groups. Not to be outdone, opponents of the tax cuts strove to shape the tax code to favor their constituencies as well. By the late 1920's, revenues were decreasing. Treasury Secretary Andrew Mellon worked to mold the tax policy toward balanced budgets, so he resurrected the notion of "ability to pay" with an entirely new gloss: relative ease of financing the government's burdens.

The turn of the phrase's meaning was a watershed in tax policy. Income was to be viewed as a public resource instead of the fruit of private labors, and the government tap would thrust more deeply into the tree of private enterprise and would be drawn from lower income earners shallower, lower earning saplings in the form of the earned income tax credit. The foundation had been laid for a wholesale shift of policy by the time the Great Depression arrived.

President Franklin D. Roosevelt called wealthy higher-tax opponents "economic royalists", and lead the charge in the buildup of "Great Society" welfare programs that unapologetically pounded the tax tap even more deeply into the work products of the wealthy. From FDR's presidency to the present day, the typical American view of tax policy has centered on "ability to pay" with income as a public resource and subject to massaging in so many directions to silence the catcalls for those arguing for redistribution of wealth.

So, there was no Fox News Alert last week when Senator Obama proposed his tax policy framed on the idea of "need of the income producer". But, there should have been. A professor at the University of Richmond followed that with a statement last week that taxpayers should want to pay more taxes and that the business owner could not generate the income he enjoys without the "social contract" of our economy. According to the professor, one's income is really at the entire disposal of the society (he really means "the government") and that we should each simply be content with what we get to keep.

The ideas of Senator Obama and his academic kinsman are absurdly counter to any notion of privacy. Republicans have remained strangely quiet, as if they didn't notice. That is alarming in its own right. Perhaps they were sharpening their abortion/pro-life spears for the Fox News Republican Presidential debate; none were left unchucked. But, Republicans have, in fact, given up that ground by their reaction to another less recent development: their lament over the Supreme Court's opinion in Lawrence v. Texas, where Texas anti-sodomy laws were struck down as being too intrusive into personal privacy.

Lawrence held that Texas could not make sodomy illegal since people have a basic right of privacy in their bedrooms. Justice Scalia scorned the opinion so much that he read his dissent aloud from the bench when the case was announced, a rare occurrence. Mr. Scalia employed the slippery slope tactic: all morals legislation in every state would be cast in doubt as being unconstitutionally nosy. That has not been the case and Lawrence has been applied with much restraint by those closest to the democratic process -- state courts whose judges are elected by people who would never legalize sodomy (until police arrested them for it).

The conservative haste to govern the bedroom has given up the moral and logical ground to those who will help themselves to the wealth of anyone they choose. The bottom line is that privacy, whether economic or sexual, is on its last legs. The Patriot Act, for all of the fertilizer it has thrown on the tentacles of government power, is no match for the tax code or the sex police in terms of limiting privacy and growing government.

About the Writer

GreatMinds is a writer for BrooWaha. For more information, visit the writer's website.
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