Everybody
loves to hate taxes. As the old saying implies, taxes are right up there with
death among humanity’s least favorite things. Yet they are as old as
civilization itself; tax records have been found from as far back as the Ur III
dynasty of 2,000 BC, and possibly older. And we can be sure that its residents
paid them grudgingly. Tax resistance is a perennial theme in history, dating
back to Jesus, at least, and his alleged “forbidding us to pay taxes to Caesar”
(Luke 23:2). Lady Godiva’s mythic ride through Coventry was allegedly on behalf
of excessive taxes. Dozens of wars, revolts, and uprisings in the sixteenth,
seventeenth, and eighteenth centuries occurred over taxation. We all know of
the infamous “no taxation without representation” and the Boston Tea Party,
leading to the American Revolution. Thoreau was briefly jailed in 1846 over a
failure to pay taxes, in an act of civil disobedience against the
Mexican-American War. Among the American public, there was significant
resistance to tax increases during both World Wars and the Vietnam War. Even
today, scarcely a month goes by without some anti-tax action making the news
somewhere in the world.
And yet,
everyone except pure anarchists wants some level of service from their
government, and thus we all more or less accept the inevitable. Everyone has
their favorite governmental program that they want funded; but they always want
someone else to pay for it. We all would love to get something for nothing from
the feds. But most of us realize that government cannot function without
revenue, and that it cannot simply create money out of thin air—at least, not
indefinitely. And so we pay.
Most
galling of all, I suppose, is income tax: government “tribute” taken directly
from our paychecks, before we see a single penny. Long hard hours put in, the
daily grind, dealing with obnoxious bosses and coworkers, moronic customers,
deadlines, 60-hour weeks…and then the government steps in and takes its “fair
share.” We can sometimes get tricky and defer payment until Tax Day, but
eventually the bill comes due; and we pay. In the US, the average worker pays
20–25 percent of income to the federal government, and another 5 percent to
state or local governments: upwards of a third of our income, gone, lost,
squandered.
But what
if we—most of us, anyway—didn’t have to pay any income tax? What if we could
have all the same governmental services that we do today, but surrender nothing
from our hard-earned paychecks? It may surprise the reader to know that, for
most of the history of the USA, citizens paid no income tax at all. And for
decades more, only a very small percentage paid them. For 150 years, it worked.
What if we could have that again? And what if the lost funds could be covered,
in large part, by that most prosperous of ethnic minorities? There would be a
sort of sublime justice in that, would there not?
A Short
History of Taxation in America
Born out
of tax revolt, the early United States government was uniquely sensitive to the
question of taxation. Much of the debate centered on the role and size of a
federal government. The so-called federalists, like Madison and Hamilton,
argued for a strong central government and hence significant taxation, whereas
others like Jefferson defended a small, decentralized, states-rights model that
necessarily required lesser federal taxes. But neither side wanted to tax the
nation’s farmers and small businessmen, and so it was agreed that import
taxes—tariffs—would be employed to fund the government. These were easy to
collect at ports of entry, and they had the added benefit of protecting nascent
American industries. Tariffs, along with a few selected excise taxes on
specific commodities, funded the entire federal government.
Correspondingly,
the early government was relatively small. At no time in those early years did
federal spending exceed 5 percent of the nation’s GDP; whereas today, the
figure is around 21 percent.[1] Jefferson’s
argument evidently held sway, for well into the nineteenth century. The US
continued to rely almost exclusively on tariffs and minor excise taxes, right
up to the Civil War. Thus, for the first 85 years of its existence, the United
States had precisely zero income tax.
With the
advent of the Civil War in 1860, things changed, at least temporarily. The
Revenue Act of 1861 imposed a 3% tax on income over $800 (equivalent to about
$25,000 today). The income threshold was lowered the following year to $600,
thus bringing in additional revenue. In 1864, the rate increased to 5% for most
wage-earners, and up to 10% for the highest incomes. In any case, it was all
justified only by the exigencies of war. With Union victory in 1865, the on-going
need vanished and the income tax was rightly abolished a few years later.
For the
next two decades, the nation again relied on tariffs for the vast majority of
its funding. But meanwhile, pressure to reduce them steadily grew, in part to
allow for lower prices for businesses and consumers on imported items.
Congressmen realized, however, that another tax would be needed to offset the
lost revenue. Hence came the Wilson-Gorman Tariff Act of 1894, which
reintroduced income taxes, now of 2% on earnings over $4,000—equivalent to
about $120,000 today. It was truly a tax for the well-off.
Unfortunately
for the government, it was also unconstitutional. When a New York company,
Farmer’s Loan and Trust, attempted to enforce the law, a wealthy stockholder,
Charles Pollock, objected, sued the company, and won in the Supreme Court. It
seems that, at the time, the US Constitution had no provision for a “direct”
tax on income without a complex system of apportionment, i.e., payment back to
the states. In effect, by the court’s ruling, the income tax was functionally
abolished. For the next 20 years, the feds again had to rely on import tariffs.
This
little dilemma was resolved in 1913 with the passing of the Sixteenth Amendment
to the Constitution. It reads, in full: “The 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.” There were some oddities connected with both the wording of the
amendment and the ratification process, but I won’t go into those here.[2] In
any case, Congress wasted no time, and the Revenue Act of 1913[3] reduced
tariffs but imposed a 1% tax on income over $3,000, rising to a rate of 6% on
incomes over $500,000. The income threshold of $3,000—about $78,000
today—effectively applied only to the top three percent of earners; a full 97%
of Americans were unaffected. The vast majority of people continued to pay no
income tax.
The
Revenue Act of 1913 was gladly signed into law on October 3rd of
that year, by first-term president Woodrow Wilson. For his part, Wilson seems
to have been the first president elected with the full blessing of the Jewish
Lobby. As Henry Ford saw it, “Mr. Wilson, while President, was very close to
the Jews. His administration, as everyone knows, was predominantly Jewish”.[12] His
major political donors were Jews, including the likes of Henry Morgenthau,
Jacob Schiff, Samuel Untermyer, Paul Warburg, Bernard Baruch, and Louis
Brandeis. Wilson was also the first president to fully reward their support;
Morgenthau was named ambassador to the Ottoman Empire and Warburg was appointed
as the first chairman of the newly-formed Federal Reserve. Later, Baruch would
assume vast powers in his War Industries Board, and Brandeis would become the
first Jew on the Supreme Court.
Onset of
War
Meanwhile,
trouble was brewing in Europe. A complex series of treaties and alliances,
combined with the untimely assassination of Archduke Ferdinand on 28 June 1914,
inaugurated the First World War. For a full two years, the US avoided
entanglement. Wilson ran for his second term in late 1916 with the slogan “He
kept us out of war.” But to no avail; soon after winning, he declared war on
Germany, in April 1917.
With the
US now involved, revenues would need to be drastically increased, and one
obvious means was via the income tax. Hence the War Revenue Act of 1917: a
quadrupled rate of 4% (still with a $3,000 per year income threshold), along
with incremental marginal rates ranging from 1% to 50%.
Into the
last year of the war, 1918, rates again increased: combined rates ranged from
6% to 77%. Also, the income threshold was lowered to $1,000 per year (for
individuals), drawing in many more taxpayers—though still amounting to just
five percent of all taxpayers.
Postwar,
the US experienced both the Roaring ‘20s and the Great Depression of the ‘30s,
all while retaining the same basic tax structure. As Benjamin Ginsberg
explains,
Prior to
the New Deal [of the 1930s]…a high tax threshold and numerous exemptions meant
that only about 3 percent of American adults were subject to [income] tax. …
The system depended on more or less voluntary compliance by a small number of
well-to-do individuals. This meant that income taxation was not at first a
major source of federal revenue.[13]
Thus,
right up until the eve of World War Two, and excepting for a few years during
the Civil War, the vast majority of Americans paid no income tax at all—in over
150 years. But that was about to change, thanks to Hebraic influence in the US
Treasury.
Onset of
War (again)
Just as
Henry Morgenthau, Sr.’s political patronage of Wilson earned him a prime
governmental post, so too his son, Henry Jr, earned the favors of the next
wartime president, Franklin Roosevelt. Henry Jr and FDR went back many years,
well before the latter’s stint as governor of New York in the late 1920s. As
FDR prepared for his run for president, Henry and other Jews were there, happy
to donate. As Myron Scholnick explains, “A number of wealthy Jewish friends
contributed to Roosevelt’s pre-nomination campaign fund: Henry Morgenthau Jr.,
Lt. Gov. Lehman, Jessie Straus, [and] Laurence Steinhardt.” Once the primaries
were out of the way, “Roosevelt’s campaign was heavily underwritten by Bernard
Baruch”.[14] As
with Wilson, FDR did not fail to reward his donors; Morgenthau, for example,
was named Secretary of Treasury in early 1934.
But it
wasn’t only Morgenthau, of course. In time-honored tradition, Henry brought in
a host of fellow Jews to help direct American economic policy. “Among those
working for Morgenthau at Treasury were large numbers of Jewish economists and
statisticians, including such contemporary and future luminaries as Jacob Viner,
Walter Salant, Herbert Stein, and Milton Friedman, who helped to fundamentally
change America’s tax system…”[15] And
change it they did.
War came
again to Europe in September 1939, and by late 1940 it was becoming
increasingly apparent that the US would get drawn in, one way or another.[16] Total
federal spending in 1939 was about $8 billion, of which around $1 billion (12%)
came from personal income taxes. But with war looming, Morgenthau and friends
knew that spending, and thus revenue, would need to dramatically increase. They
had three options: personal income tax, corporate income tax, and war bonds. So
they set to work; “in the realms of both taxation and bond sales, Jews played
major roles,” writes Ginsberg.[17]
Special
emphasis was placed on increasing personal income taxes, both by lowering the
threshold for paying, and by increasing the tax rates. The effect was dramatic.
The number of taxpaying adults increased from a very modest 1 million in 1939,
to 5 million in 1941, to 40 million in 1942—at the time, constituting virtually
all non-farm wage-earning adults. Corresponding revenues soared from $1 billion
to $40 billion by the last years of the war. Revenue increases matched spending
increases, as federal expenditures rose from $8 billion in 1940 to over $100
billion by 1945.
At the
start of the war, however, the Treasury Jews knew that enforcement of new tax
laws would be difficult. Millions of Americans who had never even considered
the possibility of paying an income tax were suddenly asked to contribute
thousands of dollars. What to do? Morgenthau’s boys devised a clever plan: “a
number of Jewish economists [including Milton Friedman and Morgenthau himself]
championed the introduction of payroll withholding, or
‘collection at the source,’ which to this day ensures a smooth, regular flow of
billions of dollars into the federal government’s coffers”.[18] That
is, the government would work with employers to extract the worker’s share of
taxes prior to paying their wages. Corporations were much easier to coerce than
unruly citizens, and rates could be arbitrarily raised in the future with little
fuss. This tactic was a “central feature” of the 1943 Revenue Act, and would
remain in effect for all future years. Thanks to payroll withholding, income
tax evolved “from a minor tax levied on wealthy Americans into a major tax
levied on all Americans”.[19]
With this
glorious new cash cow in place, the Treasury Jews—currently headed by Steven
Mnuchin—never looked back. As a result, Americans today pay an astonishing $2.1
trillion in income and “payroll” (FICA, or social security plus Medicare)
taxes, accounting for roughly 68% of all federal revenue. In other words, over
two-thirds of the entire funding of our federal government comes directly out
of citizens’ paychecks. This monumental burden is carried by 84% of all
households, who pay either income tax, or payroll tax or, most likely, both.
Most of the remaining 16% of households—representing about 50 million
people—earn too little to pay any income tax at all.
And yet
even this is not enough for our voracious feds. The $2.1 trillion is
supplemented by some $760 billion in corporate taxes (income tax plus their
share of payroll), and another $260 billion in excise and estate taxes. In sum,
the government currently takes in about $3.3 trillion. But it spends around
$4.1 trillion annually, mostly on defense and military-related costs, which
approach a breath-taking $1.25 trillion per year.[20] The
difference—an annual deficit of about $800 billion—is pushed onto future
taxpayers, in the form of additions to the federal debt, which currently stands
at nearly $22 trillion. We may be excused for holding the feds in contempt.
Return of the “3 Percent” Plan
So: What to do? Here’s one idea: Let’s
return to the old “3 percent” rule—that is, that the entire income tax burden
should again be borne by the richest 3% of households. It worked for the
decades leading up to World War II, and it could work again. After all, we’re not at war—the last
formally-declared war was in fact World War II—and apart from sporadic
‘terrorist’ actions, the world is generally at peace. In a peacetime economy,
the wealthiest Americans should rightly bear the full cost of income taxation.
There are several ways to make this
happen, but let me lay out one proposal here. Data exists to make a reasonably
accurate set of calculations. Here are the numbers:
At present, we have about 160 million
tax households in the US, representing our 325 million people. The top one percent—that is, the richest 1.6 million households—earn an
average of about $880,000 per year.[21] The
second-richest one percent earn around $400,000 on average, and the 3rd one-percent about
$325,000. Altogether, our top 3% are paid about $2.6 trillion every year.
The problem, however, is that we need
to raise $2.1 trillion in taxes from these folks. The simplest way would be to
tax them at a flat rate of 80%. Imagine: you earn a hefty $1 million per year
from your vulture capitalist hedge fund, and you have to pay $800,000 to the
feds. Hard to make those yacht payments on just $200,000 a year.
Cruel, you say? Perhaps. Fortunately,
we have an alternative. It turns out, unsurprisingly,
that most of our top 3-percenters (in terms of income) are also millionaires or
billionaires (in terms of assets). They have real assets—assets that can be taxed. Each household
in the top one-percent, in fact, owns an average of $22 million in
assets—mostly in property, stocks and bonds, and corporate equity. The second
percentile household owns some $7.5 million, on average; the 3rd percentile, $5 million. In total, this group of individuals owns or controls about $56 trillion in assets—an utterly incredible sum, to say the least.
Here then is my proposal: tax the upper
3-percenters income at a flat rate of 60%; this will raise about $1.5 trillion
annually. Then let’s also impose a mere 1% wealth tax on their assets, which
will raise another $560 billion. In sum, we get nearly exactly the desired
total of $2.1 trillion. Our richest people have fully funded the federal
government. And the remaining 97% of us—around 315 million people—get to
keep all of our hard-earned income. Imagine
that.
And who, exactly, are these poor
buggers who are about to personally fund the federal government? We know the
big names: Bill Gates, Warren Buffett, Mark Zuckerberg, Jeff Bezos, the Koch
brothers. But they are just the tip of the iceberg. When we run down the list
of leading names, we find a striking fact: around half of them are Jews. Among
the top ten, we find five Jews: Zuckerberg, Larry Page, Sergey Brin, Larry
Ellison, and Michael Bloomberg. Of the top 50, at least 27 are Jews, including
Sheldon Adelson, Steve Ballmer, Michael Dell, Carl Icahn, David Newhouse, Micki
Arison, and Stephen Ross.[22] More
broadly, we can cite once again Benjamin Ginsberg, who wrote, “Today, though
barely 2% of the nation’s population is Jewish, close to half its billionaires
are Jews”.[23]
Based on such data, we can infer that
up to half of the top 3-percenters are Jews.[24]As a
whole, they therefore own or control up to $28 trillion in assets. On my
proposal, they will correspondingly pay half of the annual $2.1 trillion to
keep our government afloat, and to fight foreign wars on their behalf. As the
prime beneficiaries of American economic policy, this is only fair.
At a minimum, some such proposal
deserves wider discussion, given that it offers massive financial benefit to
fully 97% of the nation. By rights, something like this should be discussed in
every political debate and on every nighttime news program. The closest thing
we have to this is Elizabeth Warren’s wealth tax proposal: 2% on assets between
$50 million and $1 billion, and 3% on assets over $1 billion. By my estimates,
this would apply only to the top 0.1% of households (versus my 3%), and would
only bring in, she says, around $275 billion annually (versus my $560 billion).
It’s weak, but at least a step in the right direction. And yet her proposal got
almost no discussion, and virtually no endorsement. This is unsurprising, given
that our media bosses include multi-millionaire Jews like Bob Iger and Ben
Sherwood at Disney/ABC, David Levy and Jeff Zucker at Warner/CNN, Noah
Oppenheim and Andrew Lack at NBC, and Sumner and Shari Redstone at Viacom/CBS.
They certainly have no interest in any wealth tax, as it would hit them
directly in the pocketbook. By definition, if it’s bad for them, it’s bad,
period.
Still, such a tax system,
disproportionately falling on American Jews, would have vast implications.
Think of it: A $1 trillion annual contribution from the American Jewish
community, in order to provide for the health and security of all Americans. It
would go a long way toward burnishing their long-besmirched image, and
lessening anti-Jewish hostility. By draining away some of their excessive
wealth, it would reduce their ability to meddle in government and the corporate
world. It would be a boon to the US economy, lifting millions out of poverty
and allowing millions more to get out from under crushing debt. It would serve
as a measure of true economic justice. And it would allow for an honest,
transparent, fair, and just system of taxation.
But don’t hold your breath.
Thomas
Dalton, PhD, has authored or edited several books, including a new
translation series of Mein Kampf, and the book Debating
the Holocaust (4th ed, 2020). For all his
works, see his personal website www.thomasdaltonphd.com
Notes
[1] Federal
spending is now about $4.1 trillion, which is roughly 21% of our current GDP of
$21 trillion. More on this below.
[2] See,
for example, the work of Bill Benson and his book The Law
That Never Was(www.thelawthatneverwas.com).
[3] Also
known as the ‘Underwood Tariff’ or the ‘Underwood-Simmons Act.’
[4] To
say that Stolypin was no friend of the Jews is an understatement. He once
wrote: “It is important that racial characteristics have so drastically set the
Jewish people apart from the rest of humanity as to make them totally different
creatures who cannot enter into our concept of human nature” (in A. Vaksberg, Stalin
Against the Jews, 1994, p. 6).
[5] News
reports of these events, especially in the New York
Times, consistently referred to “6 million” suffering Jews—but that’s a
story for another time. See my book Debating the Holocaust (4th ed.
2020, pp. 53-64).
[6] In
S. Singer, “President Taft and the Jews” (The Jewish Press, 23 Dec
2015). Sazonov served from 1910 to 1916.
[7] N.
Cohen, 1963, “The abrogation of the Russo-American treaty of 1832,” Jewish
Social Studies 25(1).
[9] Indeed—a
“special effort” was made to get the support of Wilson, “whose influence was
rising within the Democratic ranks” (p. 32).
[10] For
a fuller treatment of this incident and its implications, see my book The
Jewish Hand in the World Wars (2019).
[12] Dearborn
Independent, 11 June 1921. The entire ‘international Jew’ series ran without
a byline, and so for sake of convenience I attribute it to Ford—even though it
is unlikely that he wrote the pieces himself.
[15] Ginsberg,
p. 56.
[16] Again,
as with WW1, there was a prominent Jewish role in our entry into the war; see
Dalton (2019)—supra note 10.
[17] Ginsberg,
p. 56.
[18] Ginsberg,
p. 57.
[19] Ginsberg,
p. 59.
[20] Total
annual military-related spending includes several categories, far beyond simply
the Dept of Defense. In 2019, it was reported that total military-related
spending exceeded $1 trillion. This includes: base DOD budget ($550 billion),
“war” budget, aka OCO ($174 billion), DOE and nuclear spending ($25 billion),
FBI defense-related ($9 billion), Veterans Affairs ($216 billion), Homeland
Security ($69 billion), international affairs and foreign military aid (mostly
to Israel) ($51 billion), military intelligence, CIA, and NSA ($80 billion),
and lastly, defense-related share of the national debt ($156 billion)—for a
total cost of $1.25 trillion. For details, see “America’s
defense budget is bigger than you think,” www.thenation.com (7
May 2019).
[21] Howard
Gold, “Never mind the 1 percent, let’s talk about the 0.01 percent”, 2017 (https://review.chicagobooth.edu/economics/2017/article/never-mind-1-percent-lets-talk-about-001-percent).
[22] Bloomberg
Billionaires Index (2018).
[24] For
details, see my TOO article “A brief look at Jewish wealth” (7 Feb 2019).
(Republished
from The Occidental Observer by
permission of author or representative)
https://www.unz.com/article/tax-the-rich-an-alt-right-plan-to-virtually-eliminate-income-tax/