By Stephen J. Dunn
The Founding Fathers never knew an income tax. They created a country of limited government. We did not have a Federal income tax until the Constitution was amended allowing it in 1913. Not long after we entered our first foreign war, The Great War, in which we had absolutely no national interest.
At 35%, our current top marginal income tax rate is shockingly high. The idea of the Federal government taking a third of a person’s income is unconscionable. And that does not include the take of state and local governments.
Our income tax rates are unrealistic. Consider a married couple who have worked hard and achieved success. Let’s say the husband earns $200,000 a year in business and the wife is employed earning $100,000 a year. They have itemized deductions of $50,000. Their annual federal income tax bill is $57,872. The pressure on them is great to take questionable deductions on their income tax return, or perhaps even to hide income. As high earners, they will be under Internal Revenue Service scrutiny.
Unrealistic income tax rates breed tax gamesmanship and evasion, driving up the cost of enforcing the Federal income tax regime. Our country cannot long last if most people who are subject to the income tax system do not comply with it.
Despite our excessive income tax rates, Federal income tax collections do not keep pace with federal government spending. Federal largesse is everywhere. Eight years ago we gratuitously invaded Iraq. Since then we have been occupying and rebuilding Iraq, and fighting off an insurgency there. Our Iraq misadventure has tragically cost the lives of thousands of American military, and grievously wounded tens of thousands more. And the Iraq war has drained over a trillion dollars from the Federal fisc.
The Obama health care legislation will require anyone who does not have health insurance to purchase it, with a federal subsidy for those who cannot afford to pay the premiums. Anyone who fails to purchase required health insurance is subject to a penalty to be collected by the Internal Revenue Service. The program will provide few people with health insurance, and it will further swell the burgeoning Federal bureaucracy.
I know that dockets of the U.S. District Court in Detroit have been light in recent years, apparently a result the recession. Within the last year vacancies were announced in two U.S. District Court Judgeships in Detroit. I was hopeful that the Obama administration would exercise restraint and not fill the positions. U.S. District Judges are appointed for life. A Federal district judge, with retinue of law clerks and support staff, costs the Federal government about $1 million per year. Unable to refrain from the political plumbs, the Obama administration appointed a committee to identify nominees for the vacancies. I am disappointed.
Congress has from time to time tapped into the Social Security trust fund to finance Federal spending. I have paid into the Social Security system for nearly 40 years. Will I receive anything from it? Will my kids? If the Social Security trust fund proves unable to meet its obligations, the congressmen and presidents responsible for the shortfall will be out of office or dead. Social Security is a sacred trust.
As the Federal government must borrow to finance the widening federal deficit, interest payments consume an increasing share of the Federal revenues, jeopardizing our country’s future.
Far from cutting taxes, the Obama administration proposes raising them. But only on “high earners”—the people who take risks and create jobs. Profoundly misguided.
The Federal government is not God. It cannot solve all the world’s ills. In fact it does not function nearly as well as profit-motivated private individuals and companies.
We need sharply lower income tax rates. The top marginal rate should be no higher than 20%. Moderate income tax rates would stoke investment and entrepreneurship in our country, creating jobs and generating tax revenues. This occurred with tax cuts in the past, those of the 1920’s, the 1960’s, and the 1980’s, and it will happen again.
The Federal government must stop deficit spending—the Constitution should be amended to prohibit it. Wasteful, unnecessary Federal spending must cease. I am fiscally responsible. I demand the same of my government.
 American Center for Law & Justice, Federal Judgeship Act of 2009, at p. 4 (Sept. 25, 2009), viewed at http://www.aclj.org/media/pdf/Federal_Judgeship_Act_of_2009.pdf on Apr. 23, 2011.