Taxes - Tools of Government Policy:
The United States Congress, and the legislatures
of the several states, have a long history of employing
taxation as a means to achieve certain perceived
political, social and even religious objectives. Our
legislators may have learned this tactic from the
British Crown, whose unjust taxes on colonial American
tea and documentary stamps, among other things, spawned
a highly successful revolution, the concentric effects
of which are still reverberating in the modern world.
Thus we Americans revel in habit taxes that boost
the price of tobacco and alcohol products far beyond
any intrinsic value a pack of cigarettes or a fifth of
bourbon has in and of itself - even taking into account
personal taste or addiction.
Thus the most valuable real estate in America,
worth a combined total of billions of dollars, often
located in the heart of major cities, is totally tax-
exempt because it is owned, not by the Japanese, but by
a recognized established religion - Protestant,
Catholic or Jewish or whatever.
Before international free trade became a more
acceptable political doctrine, almost all federal
revenues came from heavy import taxes ("customs
duties") on products and commodities, surely a revenue
source but equally a means of protecting home-grown
U.S. merchandise.
At times legislators have gone too far in the
realm of social policy by taxation. In 1994 the U.S.
Supreme Court ruled unconstitutional a Montana tax
imposed on persons convicted of possessing, selling,
distributing or manufacturing "controlled dangerous
substances" - illicit drugs like marijuana or cocaine.
The Court said such acts could be made punishable
crimes, but that to impose additional tax liability
amounting to millions of dollars based on the amount of
drugs involved, in effect constituted double jeopardy
and cruel and unusual punishment.
So revenue alone has never been the sole object of
government tax laws.
Unquestionably the single greatest political,
economic and social impact ever imposed by taxation in
America began on February 25, 1913, the date the
requisite number of states ratified the Sixteenth
Amendment to the United States Constitution - giving
Congress "the power to lay and collect taxes on
incomes, from whatever source derived . . ." Many
would argue it has been down hill ever since.
Fortunately, in 1913 when the income tax was
authorized, Americans still firmly believed in those
voluntary non-governmental institutions which had an
admirable record of serving the needs of less fortunate
citizens - thousands of voluntary religious,
charitable, and philanthropic organizations and groups.
In the days before the "welfare state" mentality took
hold, these altruistic activities ranged from local
soup kitchens to the vast eleemosynary exertions of men
like Andrew J. Carnegie, a self-made Scottish-American
steel baron who donated millions of dollars to build
and support free public libraries, the International
Endowment for World Peace and countless other causes.
Also fortunately - for those seeking legal ways by
which to escape the ultimate excesses of modern federal
income taxes - from 1913 on, Congress took into account
the need for private philanthropy, writing federal tax
law so as to promote charitable giving by individuals
as well as organized groups. The original tax code
contained then, as it does today, "tax breaks" for
those willing to give of their personal substance to
help their fellow man (and woman). Born in tandem with
the federal income tax was the charitable tax
deduction.
Under current law charitable deductions are
available for donations to corporations organized or
exclusively operated for religious, charitable,
scientific, literary, or educational purposes, or for
groups that foster the arts, sports competition,
prevention of cruelty to children or animals, or to
fraternal associations and veterans organizations.
