There is one section, though, that I wish everyone were familiar with. Some of its contents are familiar to anyone who's read The Fair Tax Book, but it's worth repeating here.
Despite our nation being founded out of a rebellion over taxes, with the cry, "Taxation without representation is tyranny," we've been saddled with more tyranny than what we threw off. England's taxation of the colonies was paltry compared to our current tax load.
When our nation was founded, the federal government spent the equivalent of about $3 million a year--about $1 per person. By 1910, after 120 years of operation, our federal government spent just over $600 million--about $6.75 per person. (There had been modest inflation in the intervening years.) But that's pocket change compared to today. By contrast, now the federal government spends $10 billion every day (almost $12, 000 per person per year). How did this come to pass?
Taxation with representation has turned into a nightmare. Government is the "senior partner" in every American business, and its tax burden is the largest item in every working man's budget. Americans pay more for "being governed" than for food, clothing, and shelter combined. In 1929--the last year before massive federal expansion under Franklin Delano Roosevelt--federal, state, and local taxes equaled about 10 percent of our GDP. Today, combined taxes are over 26 percent of the economic earnings, but because governments are running such huge deficits, there is another 12 percent of our economy that the government is spending, which is essentially "deferred taxes" imposed on the next generation of young Americans. Total "current" plus "deferred" taxes were about 38 percent of the economy in 2009.
Obama and other liberals would like you to believe that high-income earners in the United States are under-taxed and do not pay their "fair share." Obama's campaign promise was that he would increase taxes on couples earning more than $250, 000 per year and give tax breaks to those earning less. The reality is that the top 1 percent of taxpayers already pays almost 40 percent of all personal income taxes, and that share has nearly doubled over the last quarter-century. Meanwhile, the bottom 50 percent of taxpayers pay less than 5 percent of federal personal income taxes.
Shifting taxes to corporations is a fantasy. Businesses do not pay taxes; only people pay them. An increase in corporate income tax, for example, is paid by customers in the form of increased prices, employees in the form of lower wages and shareholders in decreased dividends. So we the people pay for the tax increase, but the politicians like it because the taxes are rendered less visible to us.
Consider the fiscal problems of European countries such as Greece, Britain, and Spain these days. They have massive and growing piles of government debt even larger than our own (although we are heading in that direction). Yet every European country has income and payroll taxes, as we do, plus a Value Added Tax (VAT) that rakes in even more cash for the government. The average VAT rate in Europe--20 percent!--means that every purchase a European citizen makes hands a chunk of change over to the government, making everything at least 20 percent more expensive. History confirms that high taxes don't solve a deficit problem; they just encourage politicians to spend more money.
As Brutus, the Anti-Federalist writing during the debates on ratifying the Constitution, warned:The power to tax, exercised without limitation, will introduce itself into every corner of the city, and country--it will enter the house of every gentleman, watch over his cellar, wait upon his cook in the kitchen, follow the servants into the parlor, preside over the table, and note down all he eats and drinks; it will take cognizance of the professional man in his office, or study; it will watch the merchant in the counting house, or any store; it will follow the mechanic to his shop, and in his work, and will haunt him in his family, and in his bed; it will be a constant companion of the industrious farmer in all his labor...it will penetrate into the most obscure cottage; and finally it will light upon the head of every person in the United States. To all these different classes of people, and in all these circumstances, in which it will attend them, the language in which it will address them, will be GIVE, GIVE.