In This Case, the States Have it Wrong

The basic premise of the Constitution of the United States and the founding fathers was a small central government.

If you think about the conditions at the time, this becomes very obvious.  They were being ruled by an all powerful monarchy that was located thousands of miles away.  The colonies were sending taxes back to Britain, but they had no voice in how they were ruled.  The founding fathers wanted a weak central government and strong states.

The opposite of their vision is true now.  Again, we have a strong central government, that in my case on the West Coast, rules from thousands of miles away.  The politicians are so out of touch anyway, that even if you live in Washington DC, you probably feel they are thousands of miles away too.  We pay up to a third of our earnings to a central government that then distributes it as they see fit.  How do they know what’s best for your state?  Or for the city or town you live in?

The problem is that the states and our representatives in Congress keep ceding more and more power to the exectutive branch.  Many of these powers were supposed to be temporary, but “temporary” and “government” are pretty much an oxymoron.

In recent years, we have given the President the power to use the military without Congressional approval, we have accepted the No Child Left Behind Act that dictates to every school in the nation what to teach, we allow the CIA to spy on us by searching our internet and phone records without a warrant, and with the bailout, we now let the government give out mortgages, insure us, and nationalize banks.

So, after all that background, we now we get to the point of my post:  Many states are talking about abolishing their state income taxes.  Massachusetts has an initiative on the ballot, Rhode Island’s governor is talking about it, and if there is any momentum, California won’t be far behind.

Many, “small government” citizens are embracing the elimination of their state’s income tax.  They argue that it will make their governments more efficient.  If these states can function without a penny of Federal tax dollars, then eliminating the state income tax would be fine.  However, I doubt the states can do this.

To me, the idea of less taxes is the right one, however, the execution of this idea is wrong.  What we should be trying to abolish is the FEDERAL income tax.  We need to stop sending the fruits of our labor to a strong central government.  How do you know that your tax money is going to fund projects in your state or neighborhood?

Sure, taxes are basically “legalized plunder” according to Bastiat, but we should accept paying local and state taxes and abhor our taxes going to the central government.

The states need to be organizing against the Federal Government and the Federal income tax.  Only after that tax has been eliminated, should states start eliminating their own income taxes.

If we eliminated the Federal income tax, we would each have between 15-25% more of our paychecks.  Who knows how much of our tax dollars are wasted anyway, going through all the bureaucracies in Washington.  Then, we could actually increase our state or local taxes by 2-5%, which are more efficient and have better oversight.  We would still have almost 20% more of our income.

This would return more power back to the states, and weaken the control of the Federal government.  If states act hastily and eliminate their major source of income, then they will rely more on funds from the Federal government.  This will create even weaker states and a stronger Washington.  We are playing right into their hands.

So, while eliminating taxes and allowing us to keep more of our earnings is a great concept of liberty and freedom, we need to direct it how the founding fathers would want.  We need to first eliminate the Federal income tax and take our powers back from Washington.  Only after the central government has been weakened, can we start to examine the policies of the states.

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One Response to “In This Case, the States Have it Wrong”

  1. pacer521 Says:

    great analysis!

    I am really enjoying your blog, keep up the good work.

    http://culturedecoded.wordpress.com/2008/11/01/whymccainhaslost/

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