In mid-April of each year, anyone with more than a modest income must make a reckoning with the federal and state governments. Most of us groan about it, but how often do we contemplate why we must pay such high taxes — which for most people range from 40 percent to 50 percent of income?
The U.S. Treasury Department’s Web site prominently quotes Justice Oliver Wendell Holmes’ famous statement, “Taxes are what we pay for a civilized society.” The IRS even has those words inscribed over the entrance to its building in Washington, D.C.
Let’s examine the good justice’s insight.
When Justice Holmes was born in 1841, there was no income tax, no Social Security tax, no Medicare tax. The federal government survived on tariffs and excise taxes and land sales. The federal treasury consumed just 2 percent of the economy, compared to more than 20 percent today.
Was America civilized? Well, yes, there were “civilizing” institutions, such as churches and their schools and marketplaces and trading centers. Thomas Jefferson and John Adams, two founders and among the most civilized men in history, had died just 15 years before, in 1826. It was their system of minimal government that was still in force. And it was that system in which Justice Holmes grew up and became a civilized man.
In a way, one could argue that the high cost of government today limits our cultural progress. Wouldn’t we all be more civilized if we could keep more of our own money to spend on our families, on charities, on works of art? The rigidity and even absurdity of government is a commonplace. Year after year readers see the stories of pork-barrel projects, wasteful spending and long-past-their-prime programs.
Instead, what if we again limited government, as the founders said, to doing only such things as defending the country and establishing a universal system of justice? Beyond that, most things government currently reaches into — health, education, welfare, labor, housing and so on — would be done entirely by the private sector. Income and other taxes would not only be cut, but eliminated. April 15 again would be just another day.
Such a restoration of our liberties would produce astounding economic growth. The free spirit of Americans, so limited in recent decades, would return and astonish the world.
What could be more civilized?