Wednesday, April 15, 2009

Day 93/365 Tea Parties and Mad Hatters

Driving home late last night (in the middle of freaking nowhere), I noticed a big "Come to Our Tea Party" sign, with today's date. They picked a REALLY big open field, with lots of muddy clay to park in, so apparently they are expecting a lot of devoted followers.

Since I am one of those who files by February 2nd (or earlier if we get that W2), I hadn't paid much attention to Tax Day.

But the sign made me wonder exactly how all this tax stuff got started, since we did have that long-ago Boston Tea Party, and then went off on our own. You'd think we'd remember that, and not have any taxes at all, since they are so rarely spent how each of us thinks they should be.

Thanks to this site: I just got a crash course in tax history.
The distinguished man above is Henry George, circa 1879. Mr. George, was a San Francisco journalist (uh huh, California, here we go) who published Progress and Poverty, a book that questioned why so many Americans seemed to be poor in a nation that such a wealthy nation. His conclusion: Poverty persists amidst plenty because progress causes poverty.

After the Civil War, George moved to California and discovered a "landscape dominated by wealthy ranchers and land barons whose expansive estates were tilled by impoverished tenant farmers", instead of the mythic utopia of free land he expected. George concluded that progress tends to increase the value of land simply because it results in less available land. Private control of available land diverts a community’s wealth into the pockets of a few landlords (think lords and serfs). The price of land — its rent value — represented an "unearned increment," a profit derived not from actual labor, but by hoarding a scarce resource.

George asserted that the "producing classes could overcome mere subsistence living and regain access to the land by confiscating this unearned increment. His solution, the "single-tax," was a tax on rent designed to eliminate profits derived from speculation."

Translation: the rich get richer just by controlling available resources, and the only way the poor will ever catch up, is by taxing the rich, and eventually re-distributing the resouces. Otherwise,
wealth and resources remain concentrated in relatively few hands.

In 1890, the Republican "Billion Dollar Congress" pushed through the all-time highest tariff in our history, claiming it would "fostering industrial prosperity, high wages and a prosperous home market for farmers. Businessmen threw their political and financial support decisively behind the GOP.

In 1897, during that year's depression congressional Republicans passed the Dingley Tariff, pushing rates to yet another all-time high.

In 1906, another Republican (Teddy Roosvelt, he's the one the Teddy Bear is named after) called for a progressive estate tax (on April 14,that infamous vortex date of history).

In 1913, Republican President William Taft (he's the one that got stuck in the White House bathtub), supported and saw the passage of the Sixteenth Amendment, i.e. the Income Tax Amendment.

FWIW, the first income tax form was four pages long, and there were only 30 tax employees to look at all the tax forms.

In 1915, several congressmen complained the tax form is too long, and the House Sergeant-at-arms offered to help them figure their taxes.

By 1921, the tax department is buried under tax returns, and has yet to finish examining the returns from 1918, let alone 1919, 1920, or the incoming 1921 forms.

Republican lawmakers joined with a series of Republican presidents to engineer tax cuts in 1921, 1924, 1926, and 1928. Andrew Mellon moved into his Treasury office from 1921 until 1932 (remember these dates) and was the main proponent of the tax cut approach.

"A major lobbying effort sprung up in support of Mellon's proposals, featuring Capitol Hill appearances by a number of “tax clubs.” The clubs claimed to be grassroots organizations, giving prominent voice to popular opinion. Critics, however, considered them ill-informed, partisan mouthpieces for the rich." (Sound familiar, Tea Party attendees?)

In 1928, Mellon engineered another round of tax cuts, suggesting estate tax repeal and cuts in the corporate income tax.

But what happened in 1929? A date that seems eerily familiar from where we sit now?

Uh huh......the jumping-out-the-window, selling-apples-on-the-street, standing-in-the-soup-line Great Depression.

Just before the stock market crashed, the tax cuts had made life very easy for the American rich, and not all that bad for the average American. Both political parties kept passing tax cut after tax cut, promoting them for political publicity and gain. As Franklin Roosevelt later pointed out, “it was all very merry while it lasted.” But in 1929, the party came to a crashing end.

"From 1929-1932 The Great Depression wreaked havoc on the federal budget; as one observer recalled, “The sun was sinking in a cloudy western sky.” By 1930, Andrew Mellon warned Congress that declining revenues would produce a deficit of $200 million.

His projection was overly optimistic; the actual deficit soared to more $900 million that year. Despite the prospect of even larger deficits to come, both Andrew Mellon and President Herbert Hoover continued to resist tax increases.

This would be why people who grew up in the 1930's fondly reminesce about living in "Hoovervilles" (think the Sacramento tent city that has been on the news).

This is why you can go to estate sales, and find boxes of saved aluminum foil, and string, and rubber bands, still being hoarded by people that were so traumatized by The Great Depression that they never really trusted that it wouldn't happen again.

This is why every single person needs to read their history. There is nothing new. This has happened before, and you owe it to yourself to figure out when you are being manipulated.
If you enjoy being manipulated, at least understand why, and which rich corporation or political party is pulling your strings.

Again, thanks to this site:

I invite you to read it and weep. And if you still don't want to pay taxes, figure out yourself how to fix that street in front of your house.

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