How Freedom Was Lost
Envy, one of the seven deadly sins, is not unknown to Americans.
My last column noted the absurdity of Obama lumping the upper middle class in with the rich. The income distribution in the US is so skewed that the rich are found in the top one percent. The truly rich with the accoutrements associated with that class are in the top half of one percent.
Those points were lost on those Americans who regard anyone slightly better off than themselves as “rich.” A slightly bigger house in a better neighborhood, a BMW instead of a Toyota, and the ability to go on vacation without going into debt is all it takes to be rich in the minds of those whose eyes are green with envy.
This observation led me to the realization that freedom has been lost to envy.
Americans no longer know what freedom is. Historically, the definition of a free person is one who owns his own labor. Serfs and slaves were not free, because they do not own all of their own labor.
An income tax is inconsistent with the historical definition of freedom. Today in America government has a claim on every person’s labor, just as feudal lords, the government of that time, had claims on the labor of serfs and nineteenth century plantation owners had on slaves.
Understanding that an income tax was serfdom, our Founding Fathers wrote the US Constitution in a way that prevented an income tax. This was altered in 1913 with a constitutional amendment that some claim was not properly carried out.
This first step in the enserfment of the American people was taken in envy. The rich were the targets of the income tax. Once in place, the income tax was extended by law and by inflation until ordinary people were being taxed at rates several times as high as the original top rate for the rich.
After almost 100 years of income tax, generations have been born into serfdom and accept the government’s claim on their labor as normal, even just. Some say they don’t mind paying taxes to help the poor. They should look to see what share goes to the poor and what share to war, armaments, and the bailout of the Treasury Secretary’s rich friends.
The problem with a tax on a person’s labor is that it subtracts from a person’s independence. Without independence, it is difficult to exercise constitutionally protected rights, such as free speech.
In former times, family farms and businesses provided a measure of independence for many Americans. Today, most work for wages and salaries. The only real avenue to independence is to save part of one’s earnings and acquire enough wealth upon which to live. For most Americans, the government’s claim on their labor makes this impossible.
This is even more the case when government fails in its regulatory responsibilities and allows banksters to join in the plunder of the hard-pressed citizens.
The inheritance tax, another product of envy, has also done much to destroy the independence of the citizenry. For example, family owned independent media, once a source of independent power that held government accountable, has been lost to corporate media chains in order that families could pay inheritance taxes.
The same people who complain of rule by giant corporations support the inheritance taxes that transformed the face of American business. A family owned business has community roots and loyalties. A corporation’s owners are spread across country and abroad. Their interest is the share price. The consequence has been that many corporations no longer even have national loyalties.
A corporation’s existence is not threatened by inheritance taxes, but a family owned business is. An inheritance tax is a tax on assets accumulated from income that has already been taxed. To raise the cash to pay the inheritance tax, businesses have to be sold or taken public. Eventually, their ownership is divorced from the community.
In the past, great wealth accumulations found their way into endowments of private universities, museums and public libraries, institutions that also contributed to the independence of citizens from government control.
Today even private universities and tenured faculty have lost pieces of their independence. There are subjects that cannot be investigated and opinions that cannot be expressed. We can rationalize the inhibitions by saying that they are proper subjects for censorship. However, once the process of suppressing thought and speech begins, it spreads.
The Tax Foundation has calculated that tax freedom day arrives on May 29 this year if the federal government’s budget deficit is included, as it should be, in the tax burden. That means that Americans work 42 percent of the year for the government, a higher tax rate than was endured by medieval serfs and one approaching that of a nineteenth century slave.
In the nineteenth century, there were “underground railways” that slaves could use to escape to freedom. In our time,“underground railways” are known as “tax havens.” Just as slave owners sought to abolish“underground railways,” our owners today seek to outlaw “tax havens.”
Some Americans will reject these analogies. They can test the validity of the analogies by refusing the government’s claim on their labor. Perhaps the best evidence of American serfdom is that most Americans do not even have the ability to test the validity of the analogy, because the government takes its share in withholding tax before wages and salaries are paid to us serfs.
Paul Craig Roberts [email him] was Assistant Secretary of the Treasury during President Reagan’s first term. He was Associate Editor of the Wall Street Journal. He has held numerous academic appointments, including the William E. Simon Chair, Center for Strategic and International Studies, Georgetown University, and Senior Research Fellow, Hoover Institution, Stanford University. He was awarded the Legion of Honor by French President Francois Mitterrand. He is the author of Supply-Side Revolution : An Insider’s Account of Policymaking in Washington ;Alienation and the Soviet Economy and Meltdown: Inside the Soviet Economy, and is the co-author with Lawrence M. Stratton of The Tyranny of Good Intentions : How Prosecutors and Bureaucrats Are Trampling the Constitution in the Name of Justice . Click here for Peter Brimelow’s Forbes Magazine interview with Roberts about the recent epidemic of prosecutorial misconduct.