Growls

Burt Fulsom, a history professor at Hillsdale College in Michigan, writes in the May 2011 issue of “The Freeman,” published by the Foundation for Economic Education, that the early Progressives  (essentially the liberals of that day) “disliked consumption taxes as the major source for revenue. They were too small, too cumbersome to collect, and sometimes too regressive—wealth never properly redistributed itself through consumption taxes.”

The entire essay, titled "The Progressive Income Tax and the Joy of Spending Other People's Money," is just over two pages, and is worth reading in its entirety. He begins this way:

“On August 31, 1910, Teddy Roosevelt traveled to Kansas to make a stirring speech in support of a federal income tax. “The really big fortune,” Roosevelt said, “the swollen fortune by the mere fact of its size, acquires qualities which differentiate it in kind as well as in degree from what is possessed by men of relatively small means. Therefore, I believe in a graduated income tax on big fortunes.”

“Those two sentences helped focus the Progressive worldview. First, the United States needed an income tax to capture large chunks of revenue. Second, someone who had a large fortune, “by the mere fact of its size,” had to be treated differently from other wealth holders. Property rights became variable. One group would be treated one way, other groups would be treated another way. Third, the nation needed a “graduated income tax” to redistribute wealth from the haves to the have-nots. The new tax slogan would be “ability to pay.”

“Author Delos Kinsman, writing while Roosevelt was president, said, “Individuals should contribute to the support of the government according to ability.” And “income is the most just measure of that ability.” Enlightened leaders like Teddy Roosevelt would redistribute wealth in the national interest.

“Roosevelt’s thinking was a profound change from the views of the Founders. To them, government existed to protect property, not redistribute it. Americans had a right to pursue life, liberty, and property, not an entitlement to it. Thus the Founders never considered raising revenue through an income tax, least of all a graduated one . . . .”

Fulsom makes one other especially astute observation when he writes:

“Progressives easily sold this tax plan to the voters. Fewer than one American family in 100 paid anything, but politicians could promise audiences that they might receive benefits from the revenue. And who would dare to suggest that billionaire John D. Rockefeller did not have the ability to pay 7 percent of his huge income to the government?”

Is there any wonder why liberals aren’t keen about a flat tax, the FairTax, or returning to an “originalist” view of the U.S. Constitution?