April 15th is the day that every American is expected to have filed their federal income tax form. Some of us may have done it long before the deadline, some of us will wait until just before the stroke of midnight on April 15th and some of us may be filing for extensions to defer the actual submission of the full set of income tax-related documents.
But whichever it may be, it is a day that reminds all of us just how much the government has siphoned off from each of us during the preceding calendar year.
Working One-Third of Your Time for Government
The Tax Foundation reports that "tax freedom day" actually falls on April 24th this year. This means that, on average, each of us will have worked for 114 days of the 365 days out of the year working not for ourselves but for the government before we get to keep the remainder of the income we will have earned.
Americans will have paid in $3.3 trillion to the federal government and an additional $1.5 trillion to state and local governments in the United States, for a total of $4.8 trillion absorbed by all levels of political power. This will represent 31 percent of the country's national income.
The Tax Foundation points out that will be more than all of us spend on housing, clothing and food, combined, during the calendar year.
If there is included the additional $580 billion the government is expected to borrow in 2015 to cover its deficit spending, then "tax freedom day" will come on May 8th, because that borrowed sum will be the amount of future taxes to pay for Washington's current spendthrift ways.
Since state and local governments do not tax their citizen-subjects all the same, if you are fortunate to live in Louisiana, your "tax freedom day" was on April 2nd. On the other hand, if you reside in California or New York, your tax freedom does not come, respectively, until May 3rd and May 8th, while the most unfortunate Americans are those who live in Connecticut and New Jersey, with their "tax freedom day" only beginning on May 13th.
What If Government Taxed Like When It Was Small?
For a point of comparison, in the year 1900 Americans only paid about 5.9 percent of their income in taxes. In other words, for Americans at the beginning of the 20th century, "tax freedom day" came on January 22nd. For the remaining 343 days of that year, Americans worked and earned for themselves.
Let's suppose that government today were only to absorb as much of national income as it did in 1900. That would mean that all levels of government would take about only $230 billion instead of that $4.8 trillion.
Per capita, government would, then, cost the average American around $905 per year, instead of the $15,315 per capita estimated cost in 2015.
What makes the real difference between this imagined budget and the one actually submitted? Of course, the Welfare State! All the departments, bureaus and agencies added to the federal government since those far more laissez-faire days of over a century ago have been the product of the interventionist and redistributive state.
Less Burdensome Government Needs a Change in Ideas
The tax burdens we bear will not be reduced or eliminated until there is a shift in political philosophy away from political paternalism and once more to a belief in personal freedom and responsibility in the form of individual rights in place of our current far more collectivist premises.
Long before government began to grow dramatically in America, there were people warning about where collectivist ideas might lead, even in that freer United States. For instance, in 1887, Professor J. Laurence Laughlin, who founded the economics department at the University of Chicago, warned:
"Socialism, or the reliance on the state for help, stands in antagonism to self-help, or the activity of the individual. That body of people is certainly the strongest and the happiest in which each person is thinking for himself, is independent, self-respecting, self-confident, self-controlled, and self-mastered. When a man does a thing for himself he values it infinitely more than if it is done for him, and he is a better man for having done it . . .
"If, on the other hand, men constantly hear it said that they are oppressed and down- trodden, deprived of their own, ground down by the rich, and that the state will set all things right for them in time, what other effect can that teaching have on the character and energy of the ignorant than the complete destruction of all self-help? They think that they can have commodities that they have not helped to produce. They begin to believe that two and two make five . . .
"The danger of enervating results flowing from dependence on the state for help should cause us to restrict the interference of legislation as far as is possible, and should be permitted only when there is an absolute necessity, and even then it should be undertaken with hesitation."
Laughlin added, "The right policy is a matter of supreme importance, and we should not like to see in our country the system of interference as exhibited in the paternal theory of government existing in France and Germany."
Unfortunately, America did import the theory and policy of political paternalism from the collectivist trends then already growing stronger in Europe. They became the basis and rationale for a far bigger government in the United States beginning in the Progressive Era in the early decades of the 20th century and accelerating in the New Deal days of the Roosevelt administration in the 1930s. They have continued ever since under both Democrats and Republicans.
The "Let-Alone Principle" Is the Premise of Liberty
Today, the idea of "letting things alone" in society without an intrusive hand of government is considered the stand of the dogmatic enemy of progress and "social justice."
Yet there was a time when getting government out of people's lives and leaving people alone to manage, plan, design and direct their own lives was considered the essence of the American ideal that should be fostered, valued and fought for.
Indeed, in 1870, the free-market economist and noted astronomer Simon Newcomb, who taught at Johns Hopkins University, penned an article in the North American Review calling for adherence to and respect for "The Let-Alone Principle." Newcomb said:
"That each individual member of society should be left free to seek his own good in the way he may deem best, and required only not to interfere with the equal rights of his fellow-men . . .
"The real point in dispute between the friends and the opponents of free government and individual liberty is simply this: Is man a being to be taken care of, or is he able when protected in his rights to take care of himself better than any governing power – congress, king, or parliament – can take care of him?
"The advocates of universal freedom claim that, if each individual is protected in the enjoyment of his individual rights as a responsible member of the community, he can take care of himself, and manage his own affairs and his share of the public affairs better than any other one else can do these for him."
And Newcomb concluded that government "interference is so apt to lead to unforeseen complications – that the best course for a government to follow is, to adhere to the let-alone policy as a matter of principle."
We cannot expect government to stop growing in either size or scope until people learn to value liberty and mistrust and dislike the intruding hand of political power.
Restoring Principles Over Compromise and Expediency
What, in this context, should friends of freedom do in making the case for liberty? I would suggest that the case must be made in clear and uncompromising ways. That is, we need to demonstrate to our fellow citizens that the ideal of liberty is too easily compromised when it is judged on an ad hoc basis in the context of specific proposals for supposed benefits from some government intervention, regulation or restriction.
We don't say such things as, "Well, embezzlement is wrong, except when the person doing it, 'really' needed the money." We take it for granted that stealing from others is just immoral and should be treated that way by the law.
And we don't say such things as, "Yes, he was caught embezzling, but we can't just make him stop 'cold turkey'; his family has gotten used to living off that stolen sum in terms of their accustomed standard of living." We presume that if you're caught stealing, it should be stopped, regardless of how used to an embezzler's lifestyle the thief has come to take for granted.
We must extend the same principle and logic to respect the rights and property of every peaceful and honest member of society. As the French classical liberal Frederic Bastiat emphasized in the 19th century, that which virtually all of us would consider immoral or unjust if committed by a private individual is not elevated to ethical permissibility or rightness when performed by a group of individuals or in the name of "society" as a whole by a government.
As freedom philosopher Leonard E. Read stated long ago, you cannot compromise a principle; you can only break it. Until we succeed in this endeavor in gaining the support of a sufficient number of our fellow citizens, governments will regulate and tax with the express purpose of bestowing privileges and favors on some at the coerced expense of others – no different than when a private individual continues to act in such a way until either a change in conscience or a policing force brings his plundering ways to an end.
We should use this annual income tax time to remind others and ourselves how much a burden and cost a political system can be when it exists to violate people's rights rather than to protect them.
Dr. Richard Ebeling is the BB&T Distinguished Professor of Ethics and Free Enterprise Leadership at The Citadel in Charleston, South Carolina. He was professor of economics at Northwood University in Midland, Michigan (2009-2014). He served as president of the Foundation for Economic Education (2003-2008) and held the Ludwig von Mises Chair in Economics at Hillsdale College in Hillsdale, Michigan (1988-2003).