My Turn: A different set of historical tax facts

Posted: Friday, June 20, 2003

Bertrand Adams' memories of his father and of growing up in Yakutat are quite interesting. Unfortunately, the accompanying discussion of the history of the taxing authority of the federal government in his last two columns is so filled with errors as to call into question all of his conclusions.

Mr. Adams seems to think the framers of the Constitution "wanted the federal government to stay out of the taxing business." The truth is the exact opposite. Mr. Adams' mistake was in misreading the Fourth Clause of Article I, Section 9, a clause placing the only serious limit on the taxing power of the new government. Had he consulted Section 8, enumerating the powers of Congress, he would have seen that the federal government was given very wide authority to levy taxes and that this power was in fact the very first listed.

This was no accident. The need for a secure source of revenue for the federal government, independent of the individual states, provided the main impetus for the Constitutional Convention and was the top priority of most of the delegates. Under the Articles of Confederation, which provided the framework for national government prior to 1787, the federal treasury had been completely dependent on the states' requisitioning funds, which the states were supposed to supply (Article VIII), much as is done today with the United Nations. Unfortunately but not surprisingly, the various states consistently failed to meet their theoretical obligations with the result that the federal government was unable to pay its debts, including pay due soldiers of the Revolution.

Several attempts to fix the problem by amending the Articles foundered on the requirement for unanimity for all amendments. The result was the call for a convention to design a completely new framework for governance, and among the first and least controversial decisions of the delegates was the grant of wide authority to tax. The only limits on federal taxes were that they could not discriminate against any state, there could be no taxes on state exports, and, the limitation that Mr. Adams misinterprets, that "no capitation, or other direct, tax shall be laid" except in proportion to population. In this context "direct" means a tax placed directly on individuals, like a head tax or "capitation," as opposed to import duties, excise taxes and other forms that taxed people indirectly.

The reasons for the limitation probably had nothing to do with opposition to an income tax, an impractical levy for the United States of 1787 in any case, but related to other issues facing the convention.

As for the passage of the 16th Amendment, it could not have been introduced as a ploy to deflect support from an income levy included in a tax bill, since the Supreme Court had determined in 1894, that such a levy was unconstitutional, hence the need for an amendment. In fact, there had long been widespread support for a federal income tax and several had been in force between the Civil War and the Supreme Court decision. Thus, while the speed of the adoption of the amendment may have been surprising, it was not because nobody knew what it meant.

Finally, Mr. Adams seems to think that somehow the passage of the Income Tax Amendment limited the ability of state governments to raise revenue themselves. This, of course, is not so. The main limits on the states are to be found in their own constitutions and in their own legislatures. Mr. Adams is free to argue the merits of various forms and levels of federal taxation and their potential impacts on state and local government, but he should note that when the plan he seems to propose was tried, its effects were disastrous, exactly opposite to those he desires.

And he should also remember his father's job as a "cat skinner," of which he is so proud, and that airport in Yakutat he takes off from, and, indeed, the fact there is any jet service to Yakutat at all are only possible because of the federal income tax.

• Tom Melville of Juneau has a doctorate in history and has taught history at UAS.

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