Taxes and Property in the ‘Real’ America

Taxesby Jon N. Hall    8/4/14
Disturbing as it is, the IRS scandal should be throwing a light on a larger issue than the targeting of conservative groups. Lois Lerner, you see, was head of the Exempt Organizations department at the IRS; she was in charge of deciding which nonprofit organizations are exempt from paying taxes. That so many Americans find nothing wrong with giving unelected bureaucrats the power and discretion to choose who has to pay taxes and who is exempt from doing so is disturbing.

In the real America, Lois Lerner, an attorney, would have to busy herself chasing ambulances or fixing parking tickets. That’s because in the real America, none of these nonprofit organizations would be taxed. Heck, I don’t even believe in taxing for-profit organizations. Corporations don’t pay income taxes unless they turn a profit. So what exactly is being assessed when government taxes nonprofits? It is donations; gifts.

In the real America, individuals wouldn’t be taxed for their gifts to nonprofit organizations. Nor would they be taxed for making gifts to anything else. The individuals working for nonprofits pay taxes on their salaries, don’t they? Government flunkies should have no say in how we use our money; they’re neither smart enough (nor moral enough) to do that.

The deal is: Most of the federal government’s tax revenue comes from the taxing of individuals. In fiscal 2012, corporate income taxes accounted for only 10 percent of all federal tax revenue, the same portion as in fiscal 2000. (To verify, see PDF page 101 for 2012, and for 2000 see PDF page 122.)

One bottom line question folks should be asking here is how much money the IRS would be getting from taxing these groups if none of them were exempt. Would the taxes collected even pay for the running of the Exempt Organizations branch? So here we are, paying people at the IRS to monitor organizations so that they don’t have to pay the taxes that would pay for their salaries. It’s absurd. Of course, there would be no need for the Exempt Organizations branch if there were no exemptions being awarded.

The reason that Congress taxes nonprofit organizations is not because they need the revenue; it’s because incumbent politicians want to control political speech. They want to have the power to determine how much political speech you can have. It’s hideously un-American. If these nonprofit groups are so hateful to Congress, they should just ban them, rather than further complicating the Tax Code with yet more exemptions.

I’ve been advocating for years that the income tax, both individual and corporate, be stripped of all exemptions. So it is especially sweet that the IRS is in trouble for administering … exemptions.

But folks should be concerned not just about the alleged criminality; they should also be vexed by what the IRS is doing when it is operating entirely within the law. Congress has decided that it can treat different Americans differently, that is, unequally. Some individuals and organizations are taxed, and others are not taxed. Even if Lois Lerner was as law-abiding as all get out, the law she was enforcing is intolerable.

Progressives like to paint conservatives as being ogres obsessed with taxes; they say our solution to everything is to cut taxes. There’s some truth in that, we do tend to stew about taxes. But that’s because one of the main places where government and the individual intersect is where the government is taxing or otherwise taking.

Recently, I wrote an article about amending the Constitution to at long last put some limits on government’s power to tax. One limit I suggested is a cap on how much the IRS can take in individual income taxes (I even suggested a top rate beyond which the IRS could not go). But another limit that such an amendment should stipulate is a cap on how much can be taken by all levels of government (federal, state, and local) and by all types of taxes. Even individuals with billion-dollar incomes should have a right to keep (at least) half of what they earn in yearly income.

Perhaps the reason that there are so few limitations on the power of government to take one’s money through taxation is because government doesn’t seem to regard money as property. The Takings Clause of the Fifth Amendment is supposed to protect our property from government seizure. But the right to property, the right to “own,” is steadily being eroded away by government.

Contemporary Americans have lost sight of the central role that property plays in our great republic. We’ve become a nation of sheep, complacently allowing the government to regularly shear us.

On July 20, National Review ran a terrific article by Kevin D. Williamson headlined “Property and Peace.” The teaser line is “The irreplaceable basis for a prosperous and decent society is property.” Williamson’s short essay is a must-read reminder of a forgotten feature of our Founding. When the “parasites take half, and use it mainly to buy political support from an increasingly ovine and dependent electorate,” the real America is in the rearview mirror. The outrageous part of it is that government can take more than half. Do yourself a favor and read Williamson’s fine article. (I’ve read the thing three times mydamnself.)

Conservatives can be skittish about amending the Constitution. They might consider the fact that some of our most precious rights are affirmed by certain, you know, amendments, like the first ten.

In addition to an amendment to limit taxation, we need an amendment to restore private property rights. (Mark Levin has already proposed such an amendment.) Such an amendment would take dead aim at asset forfeiture and eminent domain abuses. It would also limit the amount that a citizen can be fined. Some of the fines leveled by the feds are outrageous and are a direct threat to private property rights. Case in point: the fines heaped on Hobby Lobby, which came to $1.3M a day. Unelected bureaucrats should not have the power to impose such fines. If Congress agrees with monster fines, let Congress impose them, and then let members run for reelection after having done so.

Other affronts to private property rights come from the EPA and the Bureau of Land Management; they often restrict what an owner can do with his property. Such agencies also impose huge fines. And then there is the double whammy to ownership, the property tax.

Yes, the property tax was defended by some of the Founders, such as Franklin. But it rankles. How can one justify taxing ownership when the property owned doesn’t present any cost to government, nor to society? Even the owning of art can subject one to the property tax. Again, there are no limits on what the government can tax.

When it’s protected, private property is a bulwark against predatory politicians. But for those who don’t own any property, concerns about having it taken away by government won’t arise. In today’s America, some folks may have resigned themselves to never acquiring property; they don’t worry about having their art collections and farms taxed away. They have given up on themselves, perhaps even given up on America; they are part of the long-term unemployed. They are America’s growing underclass.

To restore the real America, the America of hope and opportunity, we need a better class of people in government.

Jon N. Hall is a programmer/analyst from Kansas City. • (1701 views)

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10 Responses to Taxes and Property in the ‘Real’ America

  1. Maesy says:

    La propriété, c’est le vol

  2. Timothy Lane says:

    Eminent domain reform is desirable, but one must realize that the Fifth Amendment already is supposed to protect us from abuse. Can one be confident that another amendment would do any better? But banning the peculiar asset forfeiture, by which the police seize property that they claim must have been used for (or be the proceeds from) criminal activities and the victim must sue to get it back (and faces the burden of proof). That one is (or should already be) a gross violation of constitutional rights. Again, one has to wonder if an amendment could actually succeed in defanging corrupt, irresponsible, tyrannical government.

    As for taxes, I will note that Andrew Mellon wanted ultimately to reduce the income tax’s top rate to 10%. After all, why should Uncle Sam claim more than God does? I suspect that something like such a limit could be expressed in an amendment, along with all the other needed fiscal reforms. But, again, there’s the question: Can such means control our government anymore?

    • Glenn Fairman says:

      the Muslim zakat– equal to 2.5 percent of one’s earnings, is more preferable for the upkeep of tyrants and their brood.

  3. Brad Nelson Brad Nelson says:

    That’s a terrific article, Jon. Thanks for sharing it with us.


    You’ve got some good ideas here, Jon. I will suggest, though, that limitations on Congress’s power to spend must go hand-in-hand with limitations on its power to tax, else we will have even larger deficits than we do today. Other considerations regarding the taxing power should be fairness, preventing progressivity (with the goal of obstructing attempts at income redistribution), and preventing any citizen from being in a position to vote for taxes on others he won’t have to pay himself, which is our current situation.

    The simplicity of the income tax has its appeal, but after long consideration I have come to believe that as long as there is an income tax, the Left will use it to redistribute incomes, although a flat tax (mandated Constitutionally) would make this more difficult. Banning any income tax would make it hard for the Left to redistribute incomes.

  5. Rosalys says:

    “The reason that Congress taxes nonprofit organizations is not because they need the revenue; it’s because incumbent politicians want to control political speech.”

    The government doesn’t need to collect taxes from anybody or anything because that is not where they get their money. They get all the “money” they need from the Federal Reserve which creates it out of thin air so to speak, by loaning nonexistent wealth and creating debt. So why do they tax? It’s not just about controlling political speech, but controlling everybody and everything. Also, if they stopped taxing then folks might just look around wondering, “What’s up?” and may discover a few things that the anointed ones don’t want you to know.

    Read The Creature From Jekyll Island.

  6. Anniel says:

    Your article and Williamson’s should be required reading for every citizen in America. I have long believed that most of the job of the IRS is to collect information on us. A postcard to send in a flat or fair tax wouldn’t give them much.

  7. R E says:

    Man, your last sentence really says it all! Only where will we find this better class? Any time you can steal your livelihood and wealth from someone else and call it tax, isn’t that utopia?

  8. SkepticalCynic SkepticalCynic says:

    I certainly think along those same lines, Jon. A few of the things that gripe me to no end about government are: How much money you or I make or have is none of anyone else’s business. Property taxes ought to be against some law. To make a person pay what amounts to rent on his own property that has been paid for along with the taxes upon buying it is simply wrong. That government can evict me from my own house due to being unable to pay them the property taxes is so wrong a dead man would understand it.
    Am I the only one that has noticed this? In nearly 99 and 47/100ths of the times that money changes hands, some portion of it goes to one form of government or another. How can government spend the kind of money that they take in? AND, constantly want more.

    On a different note. A friend and I were talking today and he was saying that Medicare had to pay for those two drugs to keep men virile, yet would not pay a cent for eye glasses, hearing aids or dental care.

    In as much as this article along with the comments of every one are making very good points, these are small potatoes when you look at the size of the mess this country is in. I ask myself, who is doing anything fix any of it. No one ! That seems to be the correct answer. So, it is worse today than yesterday and will continue to be so.

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