Hey Joe: Meet the Constitution

The clear winner of Wednesday's debate, Joe the (kinda, sorta) plumber, focused a national debate on the wisdom and fairness of progressive taxation -- the idea that those who make more should pay more in taxes. What neither Joe nor anyone else on the political stage seems to recall is that we've had this debate before, 100 years ago, and progressive taxation won so soundly that we passed a Constitutional Amendment, the 16th, to let it go forward.

The 16th Amendment was necessary because of a controversial ruling by a reactionary majority of the Supreme Court in Pollock v. Farmers' Loan & Trust (1895). Pollock used an obscure and opaque Constitutional limitation on "direct taxes" to strike down a federal law which taxed incomes over $4,000 at 2 percent. Incomes under this figure were exempt, making this a rudamentary form of progressive taxation.

Pollock held that this tax on incomes was a direct tax and thus had to be calculated "among the several states... according to their numbers." This effectively meant that any national income tax would have to be regressive, with residents of poorer states paying a higher percentage of their income to the national government than residents of richer states.

The 16th Amendment overruled Pollock, paving the way for our current progressive income tax. As Akhil Amar explains in his aclaimed book "America's Constitution: A Biography, "both sides in the national income-tax debate understood that [national income] taxes had been, and were likely to be, progressive income taxes -- in particular, taxes that targeted the rich. Such taxes openly sought to democratize the economy. This indeed, was the very reason that Pollack's defenders so disliked these taxes."

The Amendment passed because both political parties rallied behind it. It was supported by President William Howard Taft, a Republican, when it was proposed in 1912, and by his successor, Woodrow Wilson, a Democrat, during the ratification process in 1913. It also drew considerable support from the words of John McCain's role model, Theodore Roosevelt, who said this in 1907:

The man of great wealth owes a peculiar obligation to the State, because he derives special advantages from the mere existence of government. Not only should he recognize this obligation in the way he leads his daily life and in the way he earns and spends his money, but it should also be recognized by the way in which he pays for the protection the States gives him.

Joe the plumber may never actually make the $250,000 a year necessary to trigger the increased tax burden Senator Obama is proposing. If he is ever successful enough to do so, he should count his blessings and recall President Roosevelt's, and our Constitution's, wise words.

Comments

[tuttlemsm]

Excellent article.

[bisbaz]

While Joe the plumber is focusing on principle, and a whole series of "what ifs" that appear to be somewhat unlikely in his case, a real sea-shift is taking place that he doesn't even acknowledge. I am referring of course to the increased government control over our financial system that is taking place as we speak (or write). And it is taking place under a Republican administration.

Also, regarding his comments on Social Security, his mother may have different views than he does on that subject.. His views might change as well, if he assumed responsibility for making up her lost SS benefits out of his $40,000 income.

[truthseeker1964]

Has Obama even taken a single economics course? Wealth redistribution NEVER works!!! This country's citizens have the wealthy, the innovative, the entrepreneurial, and the risk takers to thank for their jobs and their paychecks. When those individuals are forced to take cuts in their own pay, they take it from their employees or they pass it on to the consumers. They use their business acumen to figure out how to evade the increase in taxes. How do you think stock options became so popular...why do you think the AMT had to be put into place? What will the motivation be for individual small business owners to grow their business? When did a raise, and health care, and a house, and a new car, and equal pay for unequal work become rights in this country? If you want more or you need more, work harder!!!

[HHUA]

Oh brother... Here we go again... The real "WHINERS" in this country!!!

God forbid they should pay a FAIR SHARE in taxes (lord knows they get all the other breaks... exemptions, credits, loop holes, etc.)!!!

You do realize you are complaining about a MEASLY $900 in taxes that would have applied to "Joe" making $280,000 per year (had he telling the truth that is )???

Yeah... that's some "wealth spreading"? And as another poster pointed out, what Obama meant by "spreading the wealth" was creating an atmosphere in this country where more people have "more" income to spend on "growing the economy" overall... so that more people can PAY for services from "JOE THE FAKE PLUMBER"... Gee, I don't know, it worked during the Clinton years!

"if you want more, work harder"??? A lot of people work hard enough in this country (many with TWO jobs) and STILL don't have healthcare!!! Who do you think NEEDS these WORKERS... If everyone could be in the position of "owning a business"... who would work for them???

Yeah I feel sorry for the poor wealthy business owners who have to "figure out how to evade the increase in taxes."... Puh..Leeze they DO IT anyway!!!

Btw, I am a "small business owner" and will be HAPPY to "contribute" that $900 should I be fortunate enough to grow my business to that point!!!

[LSBeene]

No the WHINERS are the ones who get a host of social services and who feel entitled to them, not grateful.

Or the ones who pay little to no taxes and want someone else's money on top of that.

The money people earn at the higher income brackets is THEIRS and they EARNED it. It did not magically fall from the sky, and just because "The One" wants to make that happen by gov't is not proof of his greatness.

The ones who generate this wealth then invest it in the market, creating further wealth, buy new homes, thereby generating jobs, or USE that money in some way that redistributes it, without having "The One" picking and choosing (and buying votes) who gets it.

Maybe the part of the Constitution about free association should be read too.

Taxes back in FDRs day were not nearly as socialist as BHO want them to be. And when the 16th Amendment was written ... what was the income tax rate then ...?

Socialist always love to drool over a capitalists money and whine about "the needs" of others and use a strong central gov't to take that money. They forget that the wealth was created under capitalism. It's like the farmer who uses his seed corn and then can't understand how come next season he has no new crops.

It's not that difficult a concept.

[IzzyCA]

OK, I'll work harder. Can you tell me where I can get a job?

[betabeta]

If you have not already seen it, PLEASE watch Obama's total unedited conversation with Joe, it is awesome!!!! Go Obama! You may want to email it to all you know to fight the republican spin which is VERY WRONG as you will see:

http://abcnews.go.com/video/playerIndex?id=6031110

[Romulus]

I don't make $250,000 either. Even so, I feel that progessive PERCENTAGE increase is unfair and violates the spirit of the Equal Protection clause of the 14th amendment. While the 14th applies directly to states, it can also be seen as a reaffirmation of the national belief that "all men are created equal" and should be treated so.

While it is not possible that all taxpayers pay the same amount it IS possible that all taxpayers pay the same PERCENTAGE . That way those who make more still pay more but there is a measure of equality.

While those who drafted the 16th amenment were aware that it would lead to progressive taxation, there is nothing in the amendment mandating progressive precentages,

"The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration."

The only fair way to tax income is with a flat tax along with a standard deduction for all income earners based on the poverty. I'm not sure of the exact number but I'm guessing it would be about $4,000 per individual or family member. In other words, a family of four would be able to deduct about $16,000 before they start paying taxes. A $250,000 family of four would be able to deduct the same $16,000 before paying income tax and then it would be a flat rate, 15-20% for both.

[CosmicIrony]

I have never found the progressive tax rate a disincentive to make more money. If you are only interested in paying the least in taxes, quit your job!

[LSBeene]

It CAN be a disincentive, or an obstacle. And under "The One" quitting your job and living under socialism someone else can pay your way - subsidized housing, "comfort" money, food stamps, disability .... the options are endless and the incentive list for the lazy long.

Ya know, in the former Soviet Union they had something like this too. "You pretend to pay me, and I'll pretend to work". Or where the ones who worked harder had their quota raised, while the ones who made the minimum qoata did not - but both got paid the same.

Say, what happened to that enlightened system of gov't anyway?

[TimmySlagle]

"What neither Joe nor anyone else on the political stage seems to recall is that we've had this debate before, 100 years ago, and progressive taxation won so soundly that we passed a Constitutional Amendment, the 16th, to let it go forward."

So we're not allowed to reconsider an argument that is a hundred years old?

Who's the conservative now?

Anyway, there is no necessity for progressive taxation written anywhere in the Constitution. In fact the only place where a progressive income tax IS written, is in the Communist Manifesto.