The Unhappy, Big-Government Feeding 100th Birthday of America's Income Tax | Cato Institute

The Unhappy, Big-Government Feeding 100th Birthday of America's Income Tax | Cato Institute: "Yesteryear’s income tax advocates would not recognize their handiwork today. The tax code is mind-numbingly complex, as dedicated to manipulating individual behavior as to raising government funds. By raising nearly a trillion dollars annually it has become the chief fiscal engine of government growth. Today policymakers assume there is no program, no matter how ill-considered or ineffective, for which money is not available. Even the latest budget contretemps has had only a minor impact on Congress’ spending behavior."

"The first income tax ran from 1% to 7%, though few Americans earned enough to owe anything."

"Judges across the land proclaimed that the Constitution prohibited diminishing their salaries (and those of the president and state employees) through taxation. They emphasized the point by issuing court rulings in their own favor, excusing themselves from the tax."

"During World War II half of the population was subject to the tax. Today 70 percent of the population nominally is liable, though about 60 million (out of 144 million) returns result in no tax due."

"According to the Congressional Budget Office, the total share of income tax liabilities paid by the top one percent of households has risen from 17.4 percent in 1980 to 39.5 percent in 2007 (the CBO’s latest figures). The corresponding increase for all federal taxes, including payroll levies, is 14.2 percent to 28.1 percent.

The top five percent of the population paid 61.0 percent of all income taxes, up from 34.9 percent in 1980. The same group paid 44.3 percent of all taxes, an increase from 28.7 percent. The highest earning ten percent has gone from 47.6 percent to 72.7 percent of income tax collections. The share of all taxes paid by the latter has risen from 40.0 percent to 55.0 percent."

"Governments need revenue. But the income tax makes it far too easy for politicians to spend more. Moreover, the levy creates a direct disincentive to work and investment. Perhaps even worse, the system invites legislators to manipulate people’s behavior by creating a bizarrely complex system of special interest deductions and credits, which act as the equivalent of cash subsidies, only carefully disguised as obscure provisions in the impenetrable tax code."