The old strains of hope, change, and redistributionism

posted at 1:00 pm on October 17, 2008 by Ed Morrissey
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My friend Scott Johnson of Power Line has a column today in the Christian Science Monitor on the history of redistributionism and its links to the income tax.  Barack Obama’s accidentally revealing answer to Joe the Plumber this week did not occur in a historical vacuum.  In fact, the history of the income tax shows it to be just the kind of instrument Obama describes, with much the same intent:

Until the Civil War, the idea of a tax on individual incomes would have seemed preposterous to most Americans. Only as an emergency wartime measure did Congress adopt an income tax in the 1860s, and the measure was allowed to lapse with little fanfare in 1872.

The modern income tax begins with the Progressive era in American politics. In an influential 1889 article titled “The Owners of the United States,” crusading attorney Thomas Shearman argued that the lion’s share of the country’s wealth was in a limited number of hands. If an income tax were not adopted, he warned, within 30 years “the United States of America will be substantially owned” by fewer than 50,000 people. …

Progressives condemned the Constitution as an instrument crafted by the rich to protect their selfish interests (J. Allen Smith), and a document rendered obsolete by intellectual progress in the century since its drafting (Woodrow Wilson).

Frenzied attacks on “the rich” and “the wealthy” culminated in the ratification of the 16th Amendment in 1913, authorizing federal taxation of income from all sources without limit. The same year, historian Charles Beard published “An Economic Interpretation of the United States Constitution.” This book – later debunked – suggested that the Constitution was the handiwork of a propertied elite serving its own interests. Such sentiment has poisoned American political thought ever since.

Wilson is an interesting analogue to this campaign.  Like Barack Obama, Wilson had little experience in electoral politics, having spent most of his career as an academic.  Like Sarah Palin, he had two years of experience as a governor before running on a national ticket (the top half in Wilson’s case, obviously).  Like John McCain, Wilson tried to push reform and limited government in opposition to his own party, and like Palin, had to fight a substantial state “machine” to get it, although Wilson was somewhat less successful than Palin.

In any event, the income tax passed almost a century ago was supposed to limit the influence of the rich by forcibly redistributing their wealth.  One has to proclaim the redistribution, at least, as a success.  As Scott writes, 40% of all income taxes get paid by the top 1% of filers, and those paid in total the same amount as the bottom 95% of all filers.  We’ve grown so accustomed to the “progressive” tax system (which has two distinct and accurate meanings) that we no longer question whether this is actually good policy — at least not until a Joe the Plumber speaks up.

Obama is very fond of the number 95, especially in terms of percentages.  We’ve had the progressive income tax for 95 years, and progressives still want to soak the rich even more than they do now.  Has this succeeded in terms of efficient use of capital, or has it created a flabby, bureaucrat-ridden monster of a federal government to redistribute capital in about as costly a manner as can be imagined?  The top 5% of American earners now provides half of the funds for the federal government; has that made them less influential, or more influential?

In a way, we hear the same excuse for the system’s failures as we heard from Communists after the fall of the Soviet Union.  They claimed that true Communism had never been tried, and the redistributionists now claim that we have never done redistribution on a scale large enough for it to succeed.  Both experiments show that both concepts are failures in and of themselves.  What’s more, redistributionism opposes the American foundational concept of private property and assumes that all property essentially belongs to the government, which then allows citizens to keep a share — a share determined by bureaucrats in Washington.

It’s time to end this experiment, and send the redistributionists packing.

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