Interview with Ken Hoagland, Online Tax Revolt

I hear the fair tax proponents criticize the flat tax saying that only the flat tax would still require the IRS to remain in government. How would a consumption tax not require the IRS to enforce as well?

The earliest incarnation of the IRS was the Office of the Commissioner of Revenue, which was established by Congress in 1792 in response to the request by Secretary of the Treasury ALEXANDER HAMILTON that various tariffs and taxes be created to raise money to pay off the U.S. Revolutionary War debt. Trench Coxe of Pennsylvania was the first person to hold the office. By creating the Office of the Commissioner of Revenue, Congress delegated its constitutional power to “lay and collect taxes, duties, imposts, and excises” to the Treasury Department, which has retained the power ever since (art. 1, § 8, U.S. Constitution).

By the time THOMAS JEFFERSON became president in 1801, the internal revenue program had grown to employ 400 revenue officials, who enforced a wide variety of tax regulations, including taxes on distilled spirits, land, houses, and slaves. Jefferson, a Democrat who fiercely opposed Hamilton and his FEDERALIST PARTY programs, abolished the entire system and relied instead on taxes assessed on imported items for government revenue. When the WAR OF 1812 increased the government’s needs for funds, taxes were reimposed on items such as sugar, carriages, liquor, furniture, and other luxury items. At the war’s end, all internal taxes and collection offices were abolished, and CUSTOMS DUTIES again became the primary source for government revenue.

Congress passed sweeping new tax measures, including the Civil War Revenue Act of August 5, 1861, which authorized the country’s first INCOME TAX and imposed a direct tax of $20 million apportioned among the states. The Revenue Act of July 1, 1862, created a wide variety of new taxes. To oversee their collection, Congress created the Bureau of Internal Revenue under the secretary of the treasury.

When the Civil War ended in 1865, the government’s need for revenue was greatly reduced. Taxes were scaled back, the income tax was eliminated, and customs duties again became a sufficient source for federal funds.

After many attempts Congress finally passed a modest income tax in 1894. The Supreme Court quickly ruled it unconstitutional on the ground that it violated the constitutional provision requiring that federal taxes be apportioned equally among the various states. Supporters of the income tax overcame this hurdle in 1913, when Wyoming became the thirty-sixth state to ratify the SIXTEENTH AMENDMENT to the Constitution, giving Congress the power to collect taxes without regard to state APPORTIONMENT. That same year Congress enacted the first income tax act under the amendment, and the income tax became a permanent feature of the U.S. tax system.

In 1913,the first Form 1040 consisted of 4 pages, including instructions [that Einstein found confusing].
Congress levied a 1 percent tax on net personal incomes above $3,000 with a 6 percent surtax on incomes of more than $500,000.

In 1918, during World War I, the top rate of the income tax rose to 77 percent to help finance the war effort. It dropped sharply in the post-war years, down to 24 percent in 1929, and rose again during the Depression under the FDR socialist administration. During World War II, FDR signed into law new payroll withholding and quarterly tax payments along with the new Social Security Number assigned to American citizens. The Social Security payroll withholding promised in writing the “guarantee” that the government would return the withheld wages to retirees to provide stable living income the duration of their lives.

The agency was reorganized in 1952 to replace a patronage system from presidential appointments with permanent federal employees. The Bureau of Internal Revenue converted to the Internal Revenue Service. Only the IRS commissioner and chief counsel are still presidential appointments (Tim Geithner, “the only man who could” scam the IRS before the appointment to head it).

In an attempt to protect taxpayers’ rights, President Reagan lobbied Congress in 1988 passing the TAXPAYER BILL OF RIGHTS (Pub. L. No. 100-647, tit. VI, §§ 6226–6247, 102 Stat. 3730–3752 [Nov. 10, 1988]), which outlines the rights and protections a taxpayer has when dealing with the IRS. Included are the right to have penalties waived if the taxpayer follows incorrect advice given by the IRS, the right to request relief when tax laws result in significant hardship, and the right to attorneys’ fees in cases where IRS employees violate the Internal Revenue Code to the detriment of the taxpayer.

The IRS Restructuring and Reform Act of 1998 prompted the most comprehensive reorganization and technological modernization of IRS in nearly half a century.

Today, the Obama-Geithner IRS warns citizens that the IRS is not accountable for any false information that their “professional” employees may render, and will prosecute errors regardless of the facts.

Exactly when and who vested the IRS with powers to ignore Reagan’s legislation providing the tax payers’ bill of rights?

maverick muse on March 23, 2010 at 4:04 PM