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94 Years of Serfdom

By       Message paul roberts     Permalink
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This April 15 is the 94th year that Americans have had to file an income tax.  For most Americans, the day is a non-event.  The federal and state governments have already collected the taxes due by withholding from each paycheck over the course of the calendar year.  Most Americans never saw the money and have no real idea that they earned it.

Some Americans have their incomes over-withheld as a form of forced savings.  They look forward to tax time as it means they will receive a refund check from the government that they can use for a summer vacation, a big screen TV, a new appliance, or a down payment on a new car.

Few Americans realize that over the last 94 years they have been enserfed and have no more rights to their own labor than medieval serfs or 19th century slaves.

The 16th Amendment to the Constitution was ratified because the income tax was only for the rich.  Some states ratified the amendment because no one in the state had an income high enough to be subject to the tax.

According to the US Department of the Treasury’s history of the income tax, less than one percent of the US population was subject to the income tax.  A progressive structure was applied to this less than one percent of rich Americans, with rates ranging from 1 percent to 7 percent on incomes over $500,000, a great sum of money in those days.

In the first year of the income tax, the world’s richest person, John D. Rockefeller, paid $2 million in income tax, almost 3 percent of the total income tax collected.

People were happy.  They had finally gotten the rich.

And themselves as well.  Exemptions were reduced and tax rates were raised in rapid succession in 1916, 1917, and 1918.  Within five years the tax rates ranged from 6 percent to 77 percent, and people whose incomes were initially exempt now paid taxes at more than double the initial top rate that had applied to John D. Rockefeller.

In “free” America today, despite the Kennedy, Reagan, and Bush tax rate reductions, ordinary Americans have no more claim to their own labor than a medieval serf.  Most are content, however, with handing over 30 percent of their income as long as they can hope to tax the rich at 50 percent, the tax rate on 19th century slaves.

Some 19th century slaves, whose skills were worth more in towns than on plantations, were leased by their owners to businesses in towns.  The businesses would remit half of the slave’s wages to the owner.  Out of the remainder, slaves could save enough to purchase their freedom.

Today, we cannot purchase our freedom from the IRS.  The only free Americans today are those who can work off the books or who can live on public welfare.

People who reject my analogy can test the analogy by refusing the government’s claim on their labor.  They will find that the IRS can be just as ruthless as the worst feudal lord or slave owner.

For many Americans freedom is not as important as “fairness,” by which is meant a more equal distribution of income.  However, a number of studies indicate that a progressive income tax doesn’t achieve the kind of leveling that some desire. Moreover, rich and poor are not static groups. Studies have discovered that there is a great deal of movement between the income quintiles. Some people rise, some people fall, and some rise again. The same people do not inhabit the same quintile year after year. 

Government does not seem to be the answer.  Indeed, some of the largest incomes result from collusion with government, such as the Clinton/Bush financial deregulation that produced the world’s first annual incomes of $1 billion.

The desire to tax the rich has caused a concentration of less accountable power in the United States as national and global corporations took over from local businesses.  The estate tax, created in 1916, has forced family businesses, media, and farms into large corporate conglomerates.  The corporate media, animal, chicken, and egg farming, with its inhumane conditions, antibiotics, and waste concentrations that pollute the environment, and large scale chemical fertilizer farming that pollutes rivers and oceans are, in part, unintended consequences of taxation aimed at the rich.

Today the income tax serves our interest less than ever before.  The collapse of socialism and the rise of the high speed Internet have opened vast under-utilized foreign work forces to first world corporations.  The consequent loss of jobs and careers by Americans cannot be rectified through the corporate income tax. 

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http://www.paulcraigroberts.org/

Dr. Roberts was Assistant Secretary of the US Treasury for Economic Policy in the Reagan Administration. He was associate editor and columnist with the Wall Street Journal, columnist for Business Week and the Scripps Howard News Service. He is a contributing editor to Gerald Celente's Trends Journal. He has had numerous university appointments. His books, The Failure of Laissez Faire Capitalism and Economic Dissolution of the West is available (more...)
 

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