Who owns the fruits of your labor?

By C. Grady Drago
web posted November 1998

In 1763, the seeds of the American Revolution were cast by the British Parliament when they began the imposition of a series of taxes on what the colonists considered their productivity and personal property. The battles and debates that ensued were very similar to the debate that is occurring today.

Why has this level of outrage over taxes occurred? A glance at historical events and data bring our current tax and deficit picture in to focus. It took 164 years (until 1940) for the federal budget to reach the $10 billion level. In that same year, the federal debt was $51 billion and the GNP stood at $96 billion. It took only 30 more years (1970) for the budget to approach the $200 billion plateau and for the national debt to be run up to $381 billion. As bad a picture as these figures paint, things have actually worsened during the past 22 years.

The federal budget exceeds the astronomical level of $1.7 trillion; and while the deficit, before the last minute budget busting agreement showed an estimated $70 billion surplus for this year, and the national debt exceeds $3.7 trillion with a debt payment of $244 billion. This money drain, plus strangling regulatory burdens, are viruses that are sapping the nations businesses and individuals vitality, and are creating an ominous picture for the future.

Beginning in 1909, with the passage of a corporate excise tax, and 1913, with the enactment of the federal income tax, the U.S. Congress has generated just over 230 tax bills that have been signed into law. The overwhelming majority of these bills were to fund new programs or to "retire" the debt. Not a single instance can be found where the net result of a tax increase, by itself, has been a reduction in the national debt.

In spite of the occasional "tax rebellions", the liberals have been tenacious and creative in their insatiable appetite for the fruits of our labor so they can continue their favorite programs. The result of the Clinton tax bill, while liberals had control of Congress, is to place on the average American family the highest tax burden in the nation's history except for one year during WW II.

In November of 1994, the voters of this nation rebelled against big government and against the efforts of President Clinton and his liberal supporters to accelerate the centralization of power in Washington. The new Congressional Leadership took action on their own, because the President had no programs to implement the wishes of Americans. The result? He began embracing "conservative' programs and implementing his liberal agenda behind closed doors, through Executive Orders by-passing Congress, the American public, and the spotlight of public opinion.

The current condition of our tax code and the level of taxes is due to the centralization of power in Washington and to the continuance and expansion of the liberal programs that came out of the past fifty years. There should be a lesson here if we answer the question of why did the liberals' social programs fail.

This question was answered by Charles Murray in his book Losing Ground, a study of the Great Society Programs. As Murray pointed out, a major reason the programs failed was because once "…a minimum level of physical well being was met… among the many things that produce satisfaction, dignity, and happiness, few were purely economic." A federal welfare program was not an incubato of dignity, pride, and self respect.

Decentralizing power in Washington, decreasing and revising the tax code, and returning power to individuals and states (particularly in the area of education ) will provide opportunity and incentive, and allow us to reap the fruits of our labor. Doing so will provide the fuel for a return to a true free market economy, creating real jobs, and returning the freedom Americans fought for in 1876.

Drago is president of the Lincoln Heritage Institute. This piece recently appeared in the LHI's Lincoln Log, a fax only publication.

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