The Ethics of the Income Tax

Without feeling any serious obligation to consider the ethics of what he wants, I have a commenter who insists upon spending other people’s money on his social causes. His name is  joesix. Since religious and moral choices undergird every political system, I have been trying to change is mind about that. When joesix made this comment, I decided to do a post on the ethics of taxation, in particular, the income tax.  In this case, instead of writing my own post, I decided to “reblog” one that I think does a good job, The Ethics of the Income Tax by sean.rosenthal. Consider how it begins.  😀

Perhaps the sentiments contained in the following pages, are not YET sufficiently fashionable to procure them general favour; a long habit of not thinking a thing WRONG, gives it a superficial appearance of being RIGHT, and raises at first a formidable outcry in defense of custom.

-Thomas Paine, Common Sense

Vocally opposed to raising the income tax, Tea Party supporters realize that Americans are already overtaxed and that present and future budget problems result from an overly large, inefficient, ineffective government rather than insufficiently high tax rates. Often criticizing “class warfare” and standing firmly against raising the top income tax rate above 35%, these angry Americans embrace liberty and limited government, at least with regards to economic affairs. (continued here)

Love that quote from Thomas Paine!

As the author of The Ethics of the Income Tax continues, he talks about some absurdly high income tax rates. Don’t laugh.  Instead check out 2013 – Top Federal Income Tax Rates, and check out the 1951 income tax rate on regular income. If you were already rich, and most of your income came your investments, you did not have to worry. If you wanted to get rich, however,……

Also, don’t forget to factor in inflation. What $200,000 once bought, it does not buy today.


460px-thomas_paine.jpgThere is no question that Thomas Paine was a brave man.  When he wrote Common Sense and The American Crisis, Paine earned the ire of the English government.  His publication of Part 1 of The Rights of Man aroused the anger of the English government once again.  His publication of Part 2 of The Rights of Man earned him a death sentence.  Fortunately for Paine, when the trial took place in England, he was in France and not available to be hung.

What is debatable is Paine’s wisdom.  It is a curious characteristic of men that until we are punished for our excesses we never seem to know when to stop.  When all is said and done, we are too much like the lower creatures over which we were given dominion.  We too must learn by trial and error.   Whereas success teaches us recklessness, failure teaches a necessary caution. 

Because it too much served the elites, at first Paine advocated a reduction in government powers.  Then, to ensure the prosperity of the poor, Paine advocated government welfare for the poor (See here, for example.).  Why?  It is instructive to read Paine’s introduction to Part II of The Rights of Man.  Paine honestly believed in the perfectibility of man and the power of human reason.

What Archimedes said of the mechanical powers, may be applied to Reason and Liberty. “Had we,” said he, “a place to stand upon, we might raise the world.”

The revolution of America presented in politics what was only theory in mechanics. So deeply rooted were all the governments of the old world, and so effectually had the tyranny and the antiquity of habit established itself over the mind, that no beginning could be made in Asia, Africa, or Europe, to reform the political condition of man. Freedom had been hunted round the globe; reason was considered as rebellion; and the slavery of fear had made men afraid to think.

But such is the irresistible nature of truth, that all it asks,- and all it wants,- is the liberty of appearing. The sun needs no inscription to distinguish him from darkness; and no sooner did the American governments display themselves to the world, than despotism felt a shock and man began to contemplate redress.

The independence of America, considered merely as a separation from England, would have been a matter but of little importance, had it not been accompanied by a revolution in the principles and practice of governments. She made a stand, not for herself only, but for the world, and looked beyond the advantages herself could receive. Even the Hessian, though hired to fight against her, may live to bless his defeat; and England, condemning the viciousness of its government, rejoice in its miscarriage.

As America was the only spot in the political world where the principle of universal reformation could begin, so also was it the best in the natural world. An assemblage of circumstances conspired, not only to give birth, but to add gigantic maturity to its principles. The scene which that country presents to the eye of a spectator, has something in it which generates and encourages great ideas. Nature appears to him in magnitude. The mighty objects he beholds, act upon his mind by enlarging it, and he partakes of the greatness he contemplates.- Its first settlers were emigrants from different European nations, and of diversified professions of religion, retiring from the governmental persecutions of the old world, and meeting in the new, not as enemies, but as brothers. The wants which necessarily accompany the cultivation of a wilderness produced among them a state of society, which countries long harassed by the quarrels and intrigues of governments, had neglected to cherish. In such a situation man becomes what he ought. He sees his species, not with the inhuman idea of a natural enemy, but as kindred; and the example shows to the artificial world, that man must go back to Nature for information.

From the rapid progress which America makes in every species of improvement, it is rational to conclude that, if the governments of Asia, Africa, and Europe had begun on a principle similar to that of America, or had not been very early corrupted therefrom, those countries must by this time have been in a far superior condition to what they are. Age after age has passed away, for no other purpose than to behold their wretchedness. Could we suppose a spectator who knew nothing of the world, and who was put into it merely to make his observations, he would take a great part of the old world to be new, just struggling with the difficulties and hardships of an infant settlement. He could not suppose that the hordes of miserable poor with which old countries abound could be any other than those who had not yet had time to provide for themselves. Little would he think they were the consequence of what in such countries they call government.

If, from the more wretched parts of the old world, we look at those which are in an advanced stage of improvement we still find the greedy hand of government thrusting itself into every corner and crevice of industry, and grasping the spoil of the multitude. Invention is continually exercised to furnish new pretences for revenue and taxation. It watches prosperity as its prey, and permits none to escape without a tribute.

As revolutions have begun (and as the probability is always greater against a thing beginning, than of proceeding after it has begun), it is natural to expect that other revolutions will follow. The amazing and still increasing expenses with which old governments are conducted, the numerous wars they engage in or provoke, the embarrassments they throw in the way of universal civilisation and commerce, and the oppression and usurpation acted at home, have wearied out the patience, and exhausted the property of the world. In such a situation, and with such examples already existing, revolutions are to be looked for. They are become subjects of universal conversation, and may be considered as the Order of the day.

If systems of government can be introduced less expensive and more productive of general happiness than those which have existed, all attempts to oppose their progress will in the end be fruitless. Reason, like time, will make its own way, and prejudice will fall in a combat with interest. If universal peace, civilisation, and commerce are ever to be the happy lot of man, it cannot be accomplished but by a revolution in the system of governments. All the monarchical governments are military. War is their trade, plunder and revenue their objects. While such governments continue, peace has not the absolute security of a day. What is the history of all monarchical governments but a disgustful picture of human wretchedness, and the accidental respite of a few years’ repose? Wearied with war, and tired with human butchery, they sat down to rest, and called it peace. This certainly is not the condition that heaven intended for man; and if this be monarchy, well might monarchy be reckoned among the sins of the Jews.

The revolutions which formerly took place in the world had nothing in them that interested the bulk of mankind. They extended only to a change of persons and measures, but not of principles, and rose or fell among the common transactions of the moment. What we now behold may not improperly be called a “counter-revolution.” Conquest and tyranny, at some earlier period, dispossessed man of his rights, and he is now recovering them. And as the tide of all human affairs has its ebb and flow in directions contrary to each other, so also is it in this. Government founded on a moral theory, on a system of universal peace, on the indefeasible hereditary Rights of Man, is now revolving from west to east by a stronger impulse than the government of the sword revolved from east to west. It interests not particular individuals, but nations in its progress, and promises a new era to the human race.

The danger to which the success of revolutions is most exposed is that of attempting them before the principles on which they proceed, and the advantages to result from them, are sufficiently seen and understood. Almost everything appertaining to the circumstances of a nation, has been absorbed and confounded under the general and mysterious word government. Though it avoids taking to its account the errors it commits, and the mischiefs it occasions, it fails not to arrogate to itself whatever has the appearance of prosperity. It robs industry of its honours, by pedantically making itself the cause of its effects; and purloins from the general character of man, the merits that appertain to him as a social being. It may therefore be of use in this day of revolutions to discriminate between those things which are the effect of government, and those which are not. This will best be done by taking a review of society and civilisation, and the consequences resulting therefrom, as things distinct from what are called governments. By beginning with this investigation, we shall be able to assign effects to their proper causes and analyse the mass of common errors.  (from here)

Paine thought he understood the nature of government.  He thought he understood the process of reform and the dangers.  So he ventured into France during the French Revolution, and he nearly found himself guillotined during the Reign of Terror.  As it is, Paine spent nearly a year imprisoned.  He escaped with his head only by chance. 

It took many more years than Paine had anticipated for anything like a republican government to take root in France.  And the experiment in government that Paine helped to start continues.

Just as Paine once found himself absorbed and confounded by that mysterious word “government”, we too are absorbed and confounded today.  Each of our elections is a debate over the meaning of “government”.  Each election is another step in our Great American Experiment — and CHANGE.  We must carefully try understand what each CHANGE is about and anticipate what it will do our way of life — and to our souls.   As Paine once learned only too well, it takes more than men and their systems of government to perfect man.


460px-thomas_paine.jpgWhen he arrived in America 1774, Thomas Paine was 37 years old.  He may have been at what have been the low point of his life.  The voyage had made him so terribly ill he was delirious when he was carried off the ship; he spent the next six weeks recovering.   Moreover, he had left behind a shattered life.  He and his wife had separated.  He had lost his job and his business had gone bankrupt. 

What had Paine done?  Paine had devoted himself to a hopeless cause.  Paine was an excise officer, that is, a taxman.  His fellows had asked him to document their case for higher wages.   Not only did Paine document their case, he spent two years away from his job and his business promoting their cause.   But this venture too failed.

In America, the Lord blessed Thomas Paine with a second chance.  Paine discovered his calling.  In Philadelphia, then America’s greatest city, Paine became a writer, a very controversial writer.  Early in this new career, Paine took up the most troubling issues of the day.  For example, Paine wrote about what would eventually become the object of great conflict.  Paine wrote about slavery.  Here is an excerpt from his article in the Pennsylvania Journal and the Weekly Advertiser (published March 8, 1775). 

The Managers the Trade themselves, and others testify, that many of these African nations inhabit fertile countries, are industrious farmers, enjoy plenty, and lived quietly, averse to war, before the Europeans debauched them with liquors, and bribing them against one another; and that these inoffensive people are brought into slavery, by stealing them, tempting Kings to sell subjects, which they can have no right to do, and hiring one tribe to war against another, in order to catch prisoners. By such wicked and inhuman ways the English are said to enslave towards one hundred thousand yearly; of which thirty thousand are supposed to die by barbarous treatment in the first year; besides all that are slain in the
unnatural ways excited to take them. So much innocent blood have the managers and supporters of this inhuman trade to answer for to the common Lord of all!

Many of these were not prisoners of war, and redeemed from savage conquerors, as some plead; and they who were such prisoners, the English, who promote the war for that very end, are the guilty authors of their being so; and if they were redeemed, as is alleged, they would owe nothing to the redeemer but what he paid for them.

They show as little reason as conscience who put the matter by with saying – “Men, in some cases, are lawfully made slaves, and why may not these?” So men, in some cases, are lawfully put to death, deprived of their goods, without their consent; may any man, therefore, be treated so, without any conviction of desert? Nor is this plea mended by adding- “They are set forth to us as slaves, and we buy them without farther inquiry, let the sellers see to it.” Such man may as well join with a known band of robbers, buy their ill-got goods, and help on the trade; ignorance is no more pleadable in one case than the other; the sellers plainly own how they obtain them. But none can lawfully buy without evidence that they are not concurring with Men-Stealers; and as the true owner has a right to reclaim his goods that were stolen, and sold; so the slave, who is proper owner of his freedom, has a right to reclaim it, however often sold.  (from here)

In an era when Kings ruled, Paine spoke his mind and preached the gospel of reason.  In his own way and just as devout Christians do, Paine convicted the consciouses of his fellow men.  He left them no out, and many hated him for that. 

Such hatred is why there is a price to be paid for an honest heart.  So long as his target was the faraway King of England, Paine received the plaudits of his fellow Americans.  It is pleasant to contemplate the sins of others, particularly those who have sinned against us.  To examine our own conduct and our own beliefs gives much less pleasure.  So it is that when his targets became the beliefs of his fellow Americans, even Christianity in his last great work, the Age of Reason, the people who had once lauded Paine spurned him. 

In time, Paine’s fame be infamy.  After the end of his life, Paine’s few remaining friends buried him quietly.  On June 8, 1809, six people attended Thomas Paine’s funeral.  Two of them were black and probably freedmen.

Note that much of the above material was extracted from Thomas Paine: Enlightenment, Revolution, and the Birth of Modern Nations by Nelson, Craig.


460px-thomas_paine.jpgWe usually think of Paine’s contemporaries as our nation’s Founding Fathers. However, as Paine was born in Great Britain, I suspect he would have also included many Englishmen as contemporaries.

So it is that some time ago, I wrote a post that extracted a portion of Thomas Paine‘s “Rights of Man.” In this extract Paine provided his opinion on the obligations we to owe to dictates from the past (see here). Paine sought to counter Edmund Burke‘s Reflections on the Revolution in France. Burke, unlike Paine, was no fan of the French Revolution. Burke feared this revolution, and he wrote a long discourse (see here for a description) explaining his concerns.

Burke in turn was responding at least in part to preachings on the French Revolution by Doctor Richard Price, who favored it. At the time of the French Revolution, a king still ruled over Great Britain. Burke differed with Price’s opinion as to what justified the rule of the King of Great Britain.

What does justifies the power of a king? Paine would have nothing to do with kings, but Burke had a differing opinion.

BUT I may say of our preacher (Doctor Richard Price) “utinam nugis tota illa dedisset tempora saevitiae”. — All things in this his fulminating bull are not of so innoxious a tendency. His doctrines affect our constitution in its vital parts. He tells the Revolution Society (a club in London that approved of the French Revolution) in this political sermon that his Majesty “is almost the only lawful king in the world because the only one who owes his crown to the choice of his people.” As to the kings of the world, all of whom (except one) this archpontiff of the rights of men, with all the plenitude and with more than the boldness of the papal deposing power in its meridian fervor of the twelfth century, puts into one sweeping clause of ban and anathema and proclaims usurpers by circles of longitude and latitude, over the whole globe, it behooves them to consider how they admit into their territories these apostolic missionaries who are to tell their subjects they are not lawful kings. That is their concern. It is ours, as a domestic interest of some moment, seriously to consider the solidity of the only principle upon which these gentlemen acknowledge a king of Great Britain to be entitled to their allegiance.

This doctrine, as applied to the prince now on the British throne, either is nonsense and therefore neither true nor false, or it affirms a most unfounded, dangerous, illegal, and unconstitutional position. According to this spiritual doctor of politics, if his Majesty does not owe his crown to the choice of his people, he is no lawful king. Now nothing can be more untrue than that the crown of this kingdom is so held by his Majesty. Therefore, if you follow their rule, the king of Great Britain, who most certainly does not owe his high office to any form of popular election, is in no respect better than the rest of the gang of usurpers who reign, or rather rob, all over the face of this our miserable world without any sort of right or title to the allegiance of their people. The policy of this general doctrine, so qualified, is evident enough. The propagators of this political gospel are in hopes that their abstract principle (their principle that a popular choice is necessary to the legal existence of the sovereign magistracy) would be overlooked, whilst the king of Great Britain was not affected by it. In the meantime the ears of their congregations would be gradually habituated to it, as if it were a first principle admitted without dispute. For the present it would only operate as a theory, pickled in the preserving juices of pulpit eloquence, and laid by for future use. Condo et compono quae mox depromere possim. By this policy, whilst our government is soothed with a reservation in its favor, to which it has no claim, the security which it has in common with all governments, so far as opinion is security, is taken away.

Thus these politicians proceed whilst little notice is taken of their doctrines; but when they come to be examined upon the plain meaning of their words and the direct tendency of their doctrines, then equivocations and slippery constructions come into play. When they say the king owes his crown to the choice of his people and is therefore the only lawful sovereign in the world, they will perhaps tell us they mean to say no more than that some of the king’s predecessors have been called to the throne by some sort of choice, and therefore he owes his crown to the choice of his people. Thus, by a miserable subterfuge, they hope to render their proposition safe by rendering it nugatory. They are welcome to the asylum they seek for their offense, since they take refuge in their folly. For if you admit this interpretation, how does their idea of election differ from our idea of inheritance?

And how does the settlement of the crown in the Brunswick line derived from James the First come to legalize our monarchy rather than that of any of the neighboring countries? At some time or other, to be sure, all the beginners of dynasties were chosen by those who called them to govern. There is ground enough for the opinion that all the kingdoms of Europe were, at a remote period, elective, with more or fewer limitations in the objects of choice. But whatever kings might have been here or elsewhere a thousand years ago, or in whatever manner the ruling dynasties of England or France may have begun, the king of Great Britain is, at this day, king by a fixed rule of succession according to the laws of his country; and whilst the legal conditions of the compact of sovereignty are performed by him (as they are performed), he holds his crown in contempt of the choice of the Revolution Society, who have not a single vote for a king amongst them, either individually or collectively, though I make no doubt they would soon erect themselves into an electoral college if things were ripe to give effect to their claim. His Majesty’s heirs and successors, each in his time and order, will come to the crown with the same contempt of their choice with which his Majesty has succeeded to that he wears.

Whatever may be the success of evasion in explaining away the gross error of fact, which supposes that his Majesty (though he holds it in concurrence with the wishes) owes his crown to the choice of his people, yet nothing can evade their full explicit declaration concerning the principle of a right in the people to choose; which right is directly maintained and tenaciously adhered to. All the oblique insinuations concerning election bottom in this proposition and are referable to it. Lest the foundation of the king’s exclusive legal title should pass for a mere rant of adulatory freedom, the political divine proceeds dogmatically to assert[4] that, by the principles of the Revolution, the people of England have acquired three fundamental rights, all which, with him, compose one system and lie together in one short sentence, namely, that we have acquired a right:

  • (1) to choose our own governors.
  • (2) to cashier them for misconduct.
  • (3) to frame a government for ourselves.

This new and hitherto unheard-of bill of rights, though made in the name of the whole people, belongs to those gentlemen and their faction only. The body of the people of England have no share in it. They utterly disclaim it. They will resist the practical assertion of it with their lives and fortunes. They are bound to do so by the laws of their country made at the time of that very Revolution which is appealed to in favor of the fictitious rights claimed by the Society which abuses its name.

As his discoursed continued, Burke argued vehemently against this “unheard-of bill of rights.” Was Burke unreasonable? Before you judge too quickly, do not forget what happened in France. When the French too hastily divested themselves of all their traditions, the French Revolution became the French Reign of Terror.