Tag Archives: tax reform

Oops! 100% Tax Rate

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When Davy Crockett defined a senator as “half-horse and half-man,” he didn’t say which half was which. But I think we can figure it out.

As the U.S. Senate ponders tax reforms, drawing up various schemes to make it much more complicated than simply cutting everybody’s taxes and putting a stop to all the crazy government spending, they wound up, the other day, with a bill that would have socked some people with a 100% tax rate (https://www.wsj.com/articles/the-taxman-cometh-senate-bills-marginal-rates-could-top-100-for-some-1512942118). Oops. For a few, it would’ve been more than 100%.

(“I’ve been offered a lot for my work,” says the gunslinger [Yul Brynner] in The Magnificent Seven. “But I’ve never been offered everything.”)

The faux pas, according to The Wall Street Journal, resulted from “trying to provide benefits to businesses and families but then deny them to the richest people.”  Why they have to be denied to “the richest people” is not given. Senate money-wallahs explain the weird tax rates as “unusual hypotheticals.” Then it gets real complicated. I don’t understand it, and I don’t see how a Senator does, either. When things get that complicated, they don’t stay honest.

A Worse Taxation Regime Than Ours

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Julius Caesar

Don’t get me wrong–ours is pretty bad. My wife, with decades of experience as a top-notch bookkeeper, trained by CPAs, responsible for her company’s finances, took all week and half a ream of paper to prepare our taxes. If it’s that complicated and difficult for her, what’s it like for someone else?

But as bad as our taxation regime is, history provides us with one that was even worse, much worse–the one the Roman Empire used at the time of Christ.

Once upon a time the Romans financed their government with booty looted from the people that they conquered. Silver and gold, proceeds from the sale of slaves–it all went into the treasury. But eventually they ran out of rich peoples they could conquer, and at the same time, the Roman state became much, much bigger and costlier, so they needed another way.

Thus was born the Roman tax-farming system, perhaps the worst form of taxation ever devised by fallen man.

At least it was simple, though. The tax farmer purchased the franchise for a district to be taxed, paid the amount which the Romans had assessed the district for, and then it was up to him to get the money back, and then some. Naturally, the tax farmer had a big incentive to bleed the people of the district for all that he could get. That the system was onerous, unjust, notoriously corrupt, cruel, and could even be economically ruinous–well, the Romans decided they could live with that. Suddenly their reserve for uncollected taxes was “zero.”

Julius Caesar realized that these savings were illusory if you had to send in the legions to put down a revolt set off by insupportable taxation, so he tried to end the tax farming and replace it with a better system. Alas for all concerned, this was a battle even Caesar couldn’t win. Tax farming was too entrenched, and Roman accounting was unable to come up with a better way.

Now, here’s the question that occurs to me. Given the vast ignorance of history that pervades all levels of our own society, what would happen if someone introduced legislation to have “tax reform” by changing over to the Roman system of tax farming? “After all, it successfully financed the Empire for hundreds of years!” How many of our snail-brained leaders would vote for it? And which thugs and vampires would become our tax farmers?

Meanwhile, the Bible gives us a plain poll tax for an example, but no one’s interested in that.

Except the Lord build the house, they labor in vain that build it.   –Psalm 127:1

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