We also taxed heavily via tariff. Tell me where all the tariffs are that will make up for lack of income tax? Tariffs plummeted to nothing after 1916 and there is no way to reconstitute them under the current global trading system. Inflation will be rampant.

"Yes, but until the 16th amendment, it was unconstitutional. SCOTUS made that declaration in 1895."

A 20 year anomaly in a system where otherwise there was nothing objectionable to the income tax.

@ Putin33

Or we could cut the federal government down to its pre-1913 size. My whole objective behind supporting the repeal of the Sixteenth is that it would force the federal government to shrink to a constitutional size. I imagine that eliminating the federal social safety net and withdrawing all US troops from foreign soil would be sufficient, accompanied by a modest increase in tariffs, particularly on countries with which we have a trade deficit.

Also, I would insert a clause to allow both federal income taxes and a budget deficit for the duration of a declared war.

Population in the US was less than 1/3 the size it is now, then. Also, I don't think income tax became a main source of revenue until after WWII. I think in the 30s it was still a fairly trivial amount. What are you going to do with all the people who paid into Medicare & Social Security their entire lives? Take away their checks? These are pay as you go services.

that's just going to encourage a state of perpetual declared war...

The only way to have revenues at all without an income tax in a free trade world where we're under treaty obligations via the WTO is via something like a national sales tax or something alone those lines. I haven't looked at those kinds of proposals seriously but there might be a workable idea in there. I think it'd still be rather inflationary but at this point, inflation is not my concern.

While an income tax regime is fairly odious (at least to me and libertarian-minded thinkers like me) from a philosophical standpoint, it's also probably the best way to fund government services. Sales taxes are more inflationary than income taxes unless you spend every cent of the money you would receive from reduced income taxes on goods subject to the sales tax (and no one does this).

No, I don't think getting rid of income taxes is a good thing, Gunfighter. It's a band-aid on a gunshot wound from the angle you're taking on the issue (removing income taxes in order to stifle government spending/growth). Unless you have a meaningful philosophical shift among lawmakers away from growing government spending and toward shrinking it, no alterations in revenue mechanics are going to solve the problem.

The main flaw is that in a fiat currency system revenue is not at all connected to spending. Governments do not raise revenue in order to spend it (see very good book written by Beardsley Ruml on this in 1946). Governments raise revenues in order to reduce the amount of spending in the economy (to guard against inflation/support the dollar). So the 'starving-the-beast' strategy doesn't/can't work unless the currency moved back to a gold standard, which is a non-starter.

@Putin - Federal income tax was only from 1862 to 1872, so then there was 20 years with no income tax, an attempt to put it in place that was shot down by SCOTUS, and another 20 years with no income tax. That was effectively a 40 year moratorium on income taxes.

Also income tax during the civil war was 3% for the typical wage earner. A far cry from our current much higher rates.

"But I would imagine that most of the bigotted Libtards around here would be more than happy to see him fired..."

Happy, sure. But nobody here is claiming that's what should happen.

Just pointing out that the fed had the 'power' to enact income taxes prior to the constitutional amendment. Whether that power was used or not is not really my concern. I admit that it's rather pedantic point.

They had the power until that power was challenged and then they were told "you never had it to begin with".

"Population in the US was less than 1/3 the size it is now, then."

So? The population grew dramatically between 1789 and 1913, and the United States *still* became a serious world power without a federal income tax.

"What are you going to do with all the people who paid into Medicare & Social Security their entire lives? Take away their checks? These are pay as you go services."

I'd immediately empty the SS fund by paying back the paid amount to as many people as possible, with a first-in, first-to-get-your-money-back arrangement. When the fund runs dry, the SSA gets relegated to its rightful place atop the ash heap of history. As for Medicare, same thing. I'd freeze all new spending and collections, and reimburse (i.e. un-steal) the money using the same method. Medicaid at the federal level would simply end. Welfare and food stamps would disappear too.

The federal social safety net is grossly unconstitutional, and if it were up to me, I'd dismantle it in its entirety and with extreme prejudice.

The United States of America is simply a loose alliance of 50 semi-sovereign nation-states who unite to conduct business when it is beneficial to all parties, such as when we are attacked. It's despicable to think that a Texan should have to pay a single hard-earned dollar to educate a Californian, or a citizen of South Carolina have to pay to care for a New Yorker. The federal income tax is legalized highway robbery.

"So? The population grew dramatically between 1789 and 1913, and the United States *still* became a serious world power without a federal income tax."

We could have been a world power sooner had we not bound ourselves with absurd 18th century documents that stunted our development. And really we didn't fulfill our potential until WWII, in any case.

"Welfare and food stamps would disappear too."

And if tens of millions become unemployed thanks to your deflationary/Hooverian policies again, tough? No assistance whatsoever? If companies simply shut down and move overseas, what then? Any remedy is 'theft'?

"The federal social safety net is grossly unconstitutional"

Why should millions of unemployed and/or hungry people give a damn about what is or is not constitutional? Does laws being constitutional make them less hungry and/or and/or sick and/or unemployed? Your strict constitutionalism is just glorified social darwinism.

"The United States of America is simply a loose alliance of 50 semi-sovereign nation-states who unite to conduct business when it is beneficial to all parties, such as when we are attacked"

I don't get this fetishizing of state government. Why is state government automatically fantastic and wonderful? Do they have some great track record of achievement that I'm not aware of?

"It's despicable to think that a Texan should have to pay a single hard-earned dollar to educate a Californian"

Why must we have to replicate everything 50 times? It creates economies of scale to share resources and redistribute. Plus it makes it much easier to redistribute to areas that are, say, hit by disaster and whose people cannot fund the relief themselves. It'd despicable that millions have to suffer through your social darwinian nightmare just because of your adoration for a piece of paper written by extremely fallible 18th century men.

And Texans aren't paying for Californians. And South Carolinians sure as heck aren't paying for anything in New York. That much is obvious. The states which whine the loudest about the federal government are the net gainers of federal dollars. And furthermore the very fact that Texans aren't paying to educate anybody else, let alone Californians is probably why our education system is so unequal.

"The United States of America is simply a loose alliance of 50 semi-sovereign nation-states who unite to conduct business when it is beneficial to all parties, such as when we are attacked."

-Gunfighter, 2014

"There was a time when none denied [state's sovereignty]. I hope the time may come again, when a better comprehension of the theory of our government, and the inalienable rights of the people of the States, will prevent any one from denying that each state is a sovereign, and thus may reclaim the grants which it has made to any agent whomsoever."

-Jefferson Davis, 1861

I have one problem with your proposed pay out on SSI. I have contributed *more* in my life than most baby boomers and way more than anyone over age 75 ever did. Why should I be one of the last on the list to receive a payout. It should be by contribution not yet paid so those with the most still invested get paid first just like in a bankruptcy.

Why are you guys discussing a social security refund that is never going to happen?

I don't think comparing GF to Jeff Davis is going to have any effect on him. He'll probably agree.

@Gunfighter

Explain to me, what's the fundamental difference between a federal government redistributing wealth from one state to another and a state government redistributing it from one city to another?

I'm not gun, but I can explain it from my view. States aren't a union of cities. But the fed is a union of independent states. It would be like saying "What's the difference between the EU redistributing wealth across member countries and countries redistributing wealth across member cities." The US is more akin to the EU or the old USSR in it's over all structure. Each state is almost a country unto itself and has sovereignty. Cities do not have sovereignty like states (or in the case of the EU and the old USSR - countries) have sovereignty.

Sounds completely arbitrary.

Yeah, Draugnar, I know the difference between a federation, a state and a city. My question is that given that wealth gets redistributed from one geographical area to another in either case, what difference does it make whether such happens at the state rather than at the federal level?

And btw, in the EU wealth is being redistributed between nations too, even though it's not even a federation. It has more to do with compassion than with sovereignty in my opinion.

I meant, what fundamental difference does it make? Obviously it makes a practical/scale difference.

Why should city taxpayers have to pay for rural Ohio? They already leech off our jobs and infrastructure.

Decentralized governments are, at least theoretically, more accountable to the citizens of those governments than centralized governments are. Centralized governments have significant diseconomies of scale that make them less responsive to the people they allegedly represent compared to decentralized governments, so in that respect at least, decentralized governments provide a significant advantage over centralized ones.

Yeah, that's mostly theoretical PE. You can easily argue that due to the much larger media coverage the central government is both better know and more accountable to the citizens.