In what the New York Daily News describes as “a dynamite loaded speech,” former Collector of Internal Revenue, T. Coleman andrews, recently proposed the complete abolition of the federal income tax. Andrews, when he was collector, found out firsthand how discriminatory, how unfair, and how dangerous to economic liberty this tax has been. In trying to enforce its complex and punitive provisions he ran into many cases of deliberate or inadvertent evasion. In frustration, he even castigated the courts for failing to throw the book at those accused of “tax evasion.” He now realizes that it is the tax itself that invites evasion and legalistic schemes for avoiding payment. Everybody who ever made out an income tax form knows that it is virtually impossible to avoid making a mistake either for or against yourself unless you hire a certified public accountant or tax lawyer to help you.
Mr. Andrews charges that the income tax discriminates sharply against the middle income group—those making from $8,000 a year to $25,000 a year. It virtually confiscates all income above those levels. Anyone who has seen the “$64,000 Question” or the $100,000 show, “The Big Surprise,” is aware of that. A youngster who recently won $100,000 was able to salvage for himself only $37,000 of it after the federal tax collector got through with him. And he had to adopt the legal maneuver of having himself declared the “head of a family” to be able to keep that much! Such confiscation obviously discourages the incentive to take risks, which is what our whole free economic system has been built upon.
Every American would love to be able to stop making out that viciously confused and complex income tax form. The income tax itself is the radical change in American life. When it was en-acted, nobody ever thought, except perhaps socialists and communists, that it would ever take 90 per cent of a wealthy man’s income and 20 per cent of an average man’s income. Such a tax is completely contrary to the original constitutional principle that every citizen has a right to be treated equally under the law and not be discriminated against simply because he is more enterprising than his fellows. It attacks the right of every citizen to win as much wealth as his ability and his work permit him in competition with his fellows.
The dynamic economy of this country, which brought our living standard to a point where it is the envy of even the richest other nations in the world, was created by these incentives of free competition, by risk capital, by allowing a citizen to be rewarded according to his work instead of adopting the communist principle of rewarding each “according to his needs.” The growth of the progressive income tax has imposed a limitation on the American competitive system that can, in the end, destroy that system and replace it with a Marxian society that levels all people off in legislated poverty.
From an editorial in the Indianapolis Star, March 2, 1956.