The most oppressive and punitive tax in existence is the tax on labor. While in America this is considered a tax on income, since the vast majority of taxpayers obtain their incomes through the expenditure of labor in reality it is a tax upon one’s labor.
The Declaration of Independence lists “Life, Liberty, and the pursuit of Happiness” as among the inherent and inalienable rights of man. It ought to be universally recognized that a person has the right, at the very least, to be alive. Provided he does not infringe upon the rights of others, a person ought to exercise the right to be alive uninhibited by government interference. In order to remain alive a person must be able to provide for his basic needs such as food, water and shelter. In an advanced market economy these needs can be purchased using the common currency. Obviously, a person obtains money by exchanging goods and/or labor. By placing a tax upon the vague concept of “income” the government is, in all actuality, placing a tax upon a person’s labor and, therefore, his ability to live.
A tax, by its very nature, discourages the item or activity upon which it is levied. The degree of discouragement- or disincentive – a tax confers depends upon the percentage of tax and the individual’s preferences. The higher tax the more of a disincentive it becomes but the exact deterrent depends upon the importance the individual places on the item or activity in question. For example, a 15 percent tax may be significant enough to deter a number of people from purchasing cigarettes but others are likely to continue their purchases even with a 50 percent tax.
With welfare programs such as unemployment freely available to those who desire it, a tax upon one’s labor could very well be the deciding factor to remove oneself from the labor market. Another effect of taxing a person’s ability to survive is an expanded black market and “under the table” transactions. One purpose of the black market is to provide goods and services which would otherwise be unavailable due to generally arbitrary government prohibitions, but another major purpose is to escape the harsh penalties of taxation.
By eliminating the income tax a person would no longer be punished for simply trying to make a living. The encouragement to work would drastically increase and virtually every American would, in effect, receive an immediate and sizable raise. The federal budget would need to be cut fairly dramatically (an action which desperately needs to be undertaken anyway) and this alone is enough to make people gawk at the idea. In order to reduce the budget enough to offset the loss of income from the individual income tax, the federal budget must be lowered to the same level it was clear back in history in 1990, a whopping 20 years ago in our nearly 250 year history.