Tax ethics for smarties

By Katie Kieffer


Image credit: “Smarties” by Eliza Adam on Flickr via Creative Commons.

I have tax reform guidelines, and they’re not for dummies. My guidelines are for smart people who think rationally. Irrational folks like Warren Buffet may need to eat a bag of Halloween candy before they’re alert enough to understand my conception of ethical taxation.

Tax reform is one of the hottest topics in the news. Americans are feverishly debating tax proposals like Cain’s “999” plan, Perry’s “20/20” plan, Romney’s “flat, simpler and fairer” plan and Ron Paul’s plan to cut taxes by slashing well over $1 trillion in expenses and foreign aid and bringing spending to the pre-recession days of 2006. Meanwhile, President Obama is tantalizing voters (especially indebted college students) with proposals like the “Buffet Tax” and “We Can’t Wait.”

I think we need to ask ourselves a fundamental question: “Under what circumstances may our government rightfully seize and spend our money?”

When we die? When our spouse dies? When we pass our inheritance along to our children and grandchildren? When a government agency wants to hinder oil production? When the president wants a new czar? When a politician wants to buy votes by financing college tuition for illegal immigrants?

Federalist and framer Alexander Hamilton believed that the Constitution empowered the people by placing clear checks and balances on federal power. Hamilton explains in “The Federalist No. 78” that the legislative branch controls the purse strings and makes laws, the executive branch enforces the laws and the judiciary branch “may truly be said to have neither FORCE nor WILL, but merely judgment.”

So, a “just” tax is one that doesn’t disturb the checks and balances stipulated by the Constitution. Last week, President Obama spoke to an auditorium of college students at the University of Colorado Denver. He said, “We can’t wait for Congress to do its job. So where they won’t act, I will. …[with] executive actions.” He then went on to explain how he is bypassing Congress in the areas of education, healthcare, home mortgages and college student loans.

Congress is acting. The House passed at least 15 bipartisan pro-jobs bills that would spur energy exploration and shrink the power of government agencies like the EPA. The President’s friends in the Senate don’t like these bills, but that does not mean Congress “won’t act.” Ultimately, our president is not a king. His constitutional role is to enforce the laws and let Congress make the laws.

Anytime the federal government bypasses the constitution’s checks and balances and allows taxpayer funds to be used inappropriately, it’s effectively levying an unjust tax.

For example: Spending over $70,000 of State Department funds to stock the world’s “key libraries” with President Obama’s memoirs. Bailing out Solyndra. Authorizing Fast and Furious. And appointing policy czars to regulate everything but the color of your underwear.

Furthermore, a just tax must be both necessary and proper for upholding the Constitution. Hamilton writes that the national legislature may only make laws that are “necessary and proper for carrying into execution the powers by that Constitution vested in the government of the United States.”

Two mandates that violate the “necessary and proper” clause in the Constitution are Obamacare and net neutrality regulations. It is neither necessary nor proper to the Constitution for taxpayers to subsidize national healthcare and high-speed Internet access. The free market will create the best healthcare system and technology for Americans.

We need to change the way we talk about shady federal agencies and kinglike “executive actions.” When the federal government uses taxpayer funds to bypass the Constitution’s checks and balances or spends taxpayer money in an unnecessary or improper way, we need to acknowledge that the federal government is levying unjust taxes.

It’s not enough to lower and simplify taxes. We must also eliminate all of the unjust and hidden taxes that the government levies when it spends taxpayer funds inappropriately.

Hamilton emphasized that we the people will be to blame if the government abuses its constitutional powers because the people: “hold the scales in their own hands, [and] it is to be hoped, will always take care to preserve the constitutional equilibrium…”

We need to wield a big stick and make sure the executive branch enforces the law instead of spending taxpayer funds like a king. We also need stop unelected federal agencies like the FCC, FTC and the EPA from using taxpayer funds in unnecessary and improper ways.

Now if you’ll excuse me, I have a trick-or-treater at my door. He looks like Warren Buffet. I’ll be nice and toss this column along with a Smarties candy roll in his bag. After all, what’s Halloween for if I can’t educate a progressive billionaire on taxes?

(Since it’s Halloween, enjoy this video on Smarties Candy Co.’s entrepreneurial founder:)

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  1. David Boone says:

    In Federalist 21 Hamilton says this about taxes: "It is a signal advantage of taxes on articles of consumption, that they contain in their own nature a security against excess. They prescribe their own limit; which cannot be exceeded without defeating the end proposed, that is, an extension of the revenue. When applied to this object, the saying is as just as it is witty, that, "in political arithmetic, two and two do not always make four." If duties are too high, they lessen the consumption; the collection is eluded; and the product to the treasury is not so great as when they are confined within proper and moderate bounds. This forms a complete barrier against any material oppression of the citizens by taxes of this class, and is itself a natural limitation of the power of imposing them."

    We who advocate for the FairTax tend to get caught up in numbers, but the real significance of the FairTax is it's restoration of the proper relationship between the citizen and the government.

  2. Marie Frances says:


    You are right! Obama is NOT king.

    Also, Smarties candy is the BEST…

    Happy All Hallows Eve!

    • dbanfiel says:

      No one is king. that's kind of what its all about anyway. the personal income tax is unconstitutional and completely immoral. i think the government can generate sufficient revenues from other import/export tariffs, fines, lotteries, etc..let the people keep their earned wealth to freely spend as they see fit. that's really the answer to the articles original question.

      • Rick N. says:

        The (often over-used) phrase, 'Bold Fresh' comes to mind while reading KK's column "Tax Ethics for Smarties." In this period of occupy something, blame someone else, this article has, in my opinion, a voice from a generation often too worried about getting and taking, and instead has embraced with some historical relevance the realities of a system, an economy and a way of like that can and does succeed!

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