Congress shall have power to lay and collect taxes on incomes,
from whatever source derived, without apportionment among
the several States, and without regard to any census or enumeration.
~ Sixteenth Amendment
suffrage is in itself no guarantee of freedom. People can
vote themselves into slavery. ~ Frank Chodorov
reading Frank Chodorov’s wonderful book The
Income Tax: Root of all Evil, I have gained a better
understanding as to why America has devolved from a republic
to a social democracy (i.e., a nanny state). After all, a
nanny state cannot grow unless it is constantly fed the fruit
of our labor mostly in the form of personal income
taxes. As the state grows, one’s sense of self-ownership
is destroyed, liberty is traded for "security,"
the human spirit diminishes, rates of time preference increase,
and the citizenry increasingly thinks and behaves like dependent
children. Quite frankly, the evils of the income tax have
manifested themselves into the absurd collective belief that
everyone can live at the expense of everyone else (as if we
have an ownership stake in one another collectivized
slavery). Such an absurd mindset, unfortunately, results in
bizarre human behavior. To regain our senses, our humanity,
and our self-ownership, it is imperative that we repeal the
delve a little deeper as to how life in these United States
has become so absurd and surreal. No, I’m not seeing melting
clocks dangling from tree limbs. What I do see, wherever I
go, are people who have become disembodied. For instance,
many people who are obese claim no responsibility for their
own bodies. Those who lost money when the NASDAQ bubble burst,
aren’t responsible for their own losses so join a class-action
lawsuit against the big brokerage firms. Individuals, approaching
retirement age, express angst about Social Security’s problems
because they didn’t bother to save up and build a nest egg
of their own. When having conversations, I have found that
people (regardless of age) display their "enlightenment"
by having adopted politically-correct speech code. To me,
this is the sort of person who has taken about as much personal
responsibility for mental development as a ventriloquist’s
dummy. Metaphorically speaking, it is as if Americans have
become nothing more than characters in a video game. Someone
else is pushing the buttons, manipulating the joystick and
thus feeding "us" too many calories, causing us
to make foolish investments, preventing us from saving, and
feeding idiotic/PC words into "our" mouths. Something
pernicious has driven Americans to eschew personal responsibility,
to abdicate the right to self-ownership, and to lead such
hollow, disembodied, and surreal lives (lives which seem to
be made bearable by impulsive consumption and mindless entertainment).
As mentioned above, the culprit about which I speak is the
social-democratic nanny state as fed by income taxes.
nanny statism, America has become a society dominated by a
high-time-preference populace. What is meant by high time
preference is that a person prefers present satisfaction over
future satisfaction. For example, let’s say that two people
are interested in purchasing a $5,000 high-definition TV.
A person with a high rate of time preference would prefer
"present satisfaction" and purchase the TV using
a credit card and pay off the debt over time. A person with
a low rate of time preference would save the money over time
and purchase the TV once enough money had been saved. Hence,
a person who has a high rate of time preference is present
oriented while a person with a low rate of time preference
is future oriented and typically has a better personal financial
easy way to support the assertion, that high time preference
is a dominant characteristic of American society today, is
to look at the $50+ trillion of unfunded federal liabilities
being passed on to future generations. In other words, let’s
party today (via intergenerational, nanny-statist wealth redistribution)
and let the kids and grandkids suffer the financial hangover.
To shackle future generations, with such monstrous debt and
liabilities, is tantamount to selling them into tax slavery.
In my mind, this defines a populace with a high rate of time
preference which is consuming instead of producing
capital. Of course, this means that decivilization is
well under way.
Hans-Hermann Hoppe’s fabulous book Democracy:
The God That Failed, Dr. Hoppe describes what
happens to a populace living under nanny statism. He describes
how the decivilizing nature of social democracy
led to permanently rising taxes, debts, and public employment.
It has led to the destruction of the gold standard, unparalleled
paper-money inflation, and increased protectionism and migration
controls. Even the most fundamental private law provisions
have been perverted by an unabating flood of legislation
and regulation. Simultaneously, as regards civil society,
the institutions of marriage and family have been increasingly
weakened, the number of children has declined, and the rates
of divorce, illegitimacy, single parenthood, singledom,
and abortion have increased…In comparison to the nineteenth
century, the cognitive prowess of the political and intellectual
elites and the quality of public education have declined.
And the rates of crime, structural unemployment, welfare
dependency, parasitism, negligence, recklessness, incivility,
pyschopathy, and hedonism have increased.
would add to this list a rising propensity for Americans
to become obese. It stands to reason that an individual,
with a high rate of time preference, fails to correlate poor
eating and exercise habits with future health risks. Such
a person is not willing to invest the time necessary to learn
how to cook healthy meals nor to take the time needed to exercise
and burn off excess calories. In fact, the University of Munich’s
Department of Economics has published a discussion paper titled
and the Rate of Time Preference: Is there a Connection?
It makes for interesting reading. I would add that no matter
how much the nanny state implores for its subjects to lead
healthier lifestyles, the exact opposite will occur. After
all, nanny statism leads to nonself-ownership which often
results in one’s own physical neglect and thus higher incidences
of obesity. Indeed, I assert that there is a connection
between obesity and a high rate of time preference.
Hoppe (as quoted above) has hit on something quite important,
and that is taxes. It is the income tax (which feeds
America’s obese nanny state) that leads to high rates of time
preference. Murray Rothbard explains the connection, between
high rates of time preference and income taxes, in his magnum
Economy, and State. To wit:
is another, unheralded reason why an income tax will particularly
penalize saving and investment as against consumption. It
might be thought that since the income tax confiscates a
certain portion of a man’s income and leaves him free to
allocate the rest between consumption and investment, and
since time preference schedules remain given, the proportion
of consumption to saving will remain unchanged. But this
ignores the fact that the taxpayer’s real income and the
real value of his monetary assets have been lowered by paying
the tax. We have seen…that, given a man’s time-preference
schedule, the lower the level of his real monetary assets,
the higher his time-preference rate will be, and therefore
the higher the proportion of his consumption to investment.
magnificent analysis by Dr. Rothbard. It is axiomatic that
income taxes result in higher rates of time preference.
Moreover, he completely discredits those advocates of income
tax reform who want to change Uncle Sam’s tax code because
it currently favors consumption over savings. Income taxes
will always negatively impact savings (a future-oriented endeavor)
and thus favor consumption. To be sure, one could even state
that income taxes contribute to America’s obesity problem
another unforeseen consequence of the Sixteenth Amendment.
a free and productive society to reemerge, the Sixteenth Amendment
must be repealed thereby abolishing the income tax.
If we do not, then high-time-preference Americans will foolishly
continue to consume capital and will leave the nation impoverished.
Naturally, there will be naysayers claiming that we will descend
into chaos as centralized government is benevolent and uses
its power to give our lives, and hence society, structure.
This is patently untrue as, for many decades, American citizens
managed to save, to build productive capital, and to increase
standards of living without having to pay an income tax. Such
a society can arise again, under capitalism, in which liberty
is the mother of spontaneous, productive, and peaceful order.
by looking at the United States’ massive trade deficit, it
is crystal clear that we have become a nation dominated by
consumers, not producers. To a large extent, Americans have
lost interest in production-related jobs. So can we count
on our tax-bloated nanny state to cure our country’s production-deficit
disorder? Of course not. In The Income Tax: Root of all
Evil, Frank Chodorov argues, as follows, that continuing
to feed income taxes to our federal Leviathan is the road
to decivilization and ultimate ruin:
faced with this circumstance, does the State abdicate? It
does not. The general lack of interest in production threatens
its own existence, but it still cannot divest itself of
its inner urge for power. It turns to the use of force to
stimulate the production from which it derives taxes. It
confiscates and tries to run the entire economy by rules,
regulations, controls, and compulsion; the nation becomes
a slave-labor camp. But the output of an economy that rests
on force rather than on self-interest is meager. More important
than lack of production is the slave psychology that such
an environment induces. Men lose their capacity for self-improvement
along with their sense of individual dignity. Thus civilization
disintegrates and becomes an historical or archaeological
curio. The State, of course, collapses with the civilization.
enough, we mindlessly continue to waddle down the path of
decivilization thinking the state will always be there to
protect us undeniably, liberty and self-ownership have
been exchanged for "security." Ah, now it is clearer
as to the nature of our collective disembodiment. Americans
have become little more than characters in a surreal Hansel
and Gretel video game. Americans seek the security of
the gingerbread house, get fattened up by what appears to
be a kindly nanny, and then end up being sold into slavery
by what turns out to be an evil witch. It is amazing how destructive
the income tax is. So what shall we be; chattel or free? We
must choose soon.