This is from Ron Paul's Texas Straight Talk archives (5/7/2001). Note the comment about Treasury having surpluses. No more! After eight years of Republican fiscal mismanagement, the USA is essentially bankrupt. The Democrats are making the mess worse with the bailouts Republicans began endorsing during Bush's lame duck administration. Is Ron Paul the only voice for Liberty and Reason in Congress?
Dr. Paul writes:
Could America exist without an income tax? The idea seems radical, yet in truth America did just fine without a federal income tax for the first 126 years of its history. Prior to 1913, the government operated with revenues raised through tariffs, excise taxes, and property taxes, without ever touching a worker's paycheck. In the late 1800s, when Congress first attempted to impose an income tax, the notion of taxing a citizen's hard work was considered radical! Public outcry ensued; more importantly, the Supreme Court ruled the income tax unconstitutional. Only with passage of the 16th Amendment did Congress gain the ability to tax the productive endeavors of its citizens.
Yet don't we need an income tax to fund the important functions of the federal government? You may be surprised to know that the income tax accounts for only approximately one-third of federal revenue. Only 10 years ago, the federal budget was roughly one-third less than it is today. Surely we could find ways to cut spending back to 1990 levels, especially when the Treasury has single year tax surpluses for the past several years. So perhaps the idea of an America without an income tax is not so radical after all.
The harmful effects of the income tax are obvious. First and foremost, it has enabled government to expand far beyond its proper constitutional limits, regulating virtually every aspect of our lives. It has given government a claim on our lives and work, destroying our privacy in the process. It takes billions of dollars out of the legitimate private economy, with most Americans giving more than a third of everything they make to the federal government. This economic drain destroys jobs and penalizes productive behavior. The ridiculous complexity of the tax laws makes compliance a nightmare for both individuals and businesses. All things considered, our Founders would be dismayed by the income tax mess and the tragic loss of liberty which results.
America without an income tax would be far more prosperous and far more free, but we must be prepared to fight to regain the liberty we have lost incrementally over the past century. I recently introduced "The Liberty Amendment," legislation which would repeal the 16th Amendment and effectively abolish the income tax. I truly believe that real tax reform, reform that so many frustrated Americans desperately want, requires bold legislation that challenges the Washington mind set. Congress talks about reform, but the current tax debate really involves nothing of substance. Both parties are content to continue tinkering with the edges of the tax code to please various special interests. The Liberty Amendment is an attempt to eliminate the system altogether, forcing Congress to find a simple and fair way to collect limited federal revenues. Most of all, the Liberty Amendment is an initiative aimed at reducing the size and scope of the federal government.
Is it impossible to end the income tax? I don't believe so. In fact, I believe a serious groundswell movement of disaffected taxpayers is growing in this country. Millions of Americans are fed up with the current tax system, and they will bring pressure on Congress. Some sidestep Congress completely, bringing legal challenges questioning the validity of the tax code and the 16th Amendment itself. Ultimately, the Liberty Amendment could serve as a flashpoint for these millions of voices.