On income tax

A simple and straight forward piece by Jacob Hornberger of the Freedom Foundation. As in the US there was a time in NZ when there was no income tax, and then, for a period, very little. Government raised revenue through duties and import taxes. But that all changed and income tax has gradually grown.

Excerpt;

With the advent of income taxation in America, the relationship between citizen and government was inverted. Prior to the income tax, the citizen was sovereign by virtue of the fact that he was free to earn unlimited amounts of money and there was nothing the government could do about it. Like it or not, it was his money, to do with as he pleased.

With the adoption of income taxation, all that changed. In effect, the income tax nationalized income. While many people would undoubtedly prefer not to think about it in this way, under the federal income tax everyone’s income belongs to the government or, if you prefer, to “society.” The power to set the tax rate is essentially the power to decide how much of their income people are going to be permitted to keep.

Thus, the income tax has converted the relationship between government and citizen into one akin to parent and child. The portion of their income that the citizenry are permitted to retain has effectively become an allowance. Sometimes the government is good to the citizenry and lets them keep more of their income. Sometimes the government is not so nice and lets the citizenry keep less of their income. But what’s important here, in terms of freedom, is not the percentage that is being levied but rather the fact that it is the government making the determination. That’s obviously a far cry from a society in which there is no income taxation at all.