Tuesday, July 14, 2009

Taxes and the Wisdom of Our Forebears


By Brian Miller

One-hundred years ago, on July 17, 1909, Sen. William E. Borah (R-ID) wrote the words, "The income tax is the fairest and most equitable of the taxes. It is the one tax which approaches us in the hour of prosperity and departs in the hour of adversity. Certainly, it will be conceded by all that the great expense of government is in the protection of property and wealth. There is no possible argument founded in law or in morals why these protected interests should not bear their proportionate burden of government."

Within two years of Senator Borah's pronouncement, Wisconsin enacted the first state income tax. Several other states followed suit as a wave of Progressive Era reforms led many states to replace their ailing property taxes with more progressive and effective income taxes.

By contrast, the first functional sales tax was enacted in Mississippi during the dark days of its segregationist history, in 1932, in part as an effort to shift taxes off of the wealthy and politically powerful landowners, and onto the backs of African-Americans and poor whites. Several states followed, and while their reasoning may have been less offensive, it’s clear that legislators have known since the very beginning exactly who is most impacted by the sales tax.

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