A high-level official of the Internal Revenue Service declares her innocence before a congressional committee and then asserts the Fifth Amendment right that she had effectively just waived. Incriminating emails have surfaced, while others are declared lost. An arrogant IRS commissioner declares that none of this amounts to anything for which he should apologize on behalf of his agency.
Widespread corruption, and stunning technological incompetence and ineptitude, some of it possibly criminal, are all quite awful for confidence in our government and its tax agency — or are they? Could all of this actually present us with a golden moment for reform?
The problem began not with the targeting of conservative organizations by the IRS, but in 1913, with the passage of the 16th Amendment, which allowed Congress to levy an income tax.
A toxic stew of class envy had formed in the late 19th century, when the combination of labor strife from the onset of the Industrial Revolution mixed with the ascendant Prussian progressive idea that government bureaucracies of experts could run society better than free citizens making their own choices. In that environment, a movement to redistribute income from the rich to the not-as-rich gained enough momentum to allow for the passage of a federal income tax. After that income tax was declared unconstitutional, the 16th Amendment expressly permitting one was ratified.
By allowing Congress to tax incomes, the 16th Amendment gave the government the right to compel citizens to disclose their most private information. The Fourth Amendment, the “right of the people to be secure in their persons, houses, papers and effects,” was set aside. The federal government now had the power of a “general warrant” to compel the disclosure of Americans’ financial information and the production of their papers and effects.
The British use of “writs of assistance” — general warrants that gave an officer of the crown the power to search any house or person to look for evidence of a crime at any hour of the day or night — was among the complaints that led to the American Revolution.
The writs violated the English legal tradition on privacy that went back to the Magna Carta of 1215. The English jurist Sir Edward Coke (1552-1634) had famously written that “a man’s house is his castle.” Prime Minister William Pitt, popular in America during the French and Indian War, reinforced this tradition when he said, “(T)he poorest man may in his cottage bid defiance to all the forces of the crown. It may be frail – its roof may shake – the wind may blow through it, the storms may enter, the rain may enter, but the King of England cannot enter! All his force dares not cross the threshold of the ruined tenement.”
In 1886, the U.S. Supreme Court ruled in Boyd v. United States that a federal revenue statute requiring a person to produce his personal papers was unconstitutional.
This long-standing principle in British and U.S. law of respecting privacy was compromised for ordinary citizens by the 16th Amendment. America turned its back on a 700-year Anglo-American principle.
Perhaps, then, the current IRS scandal, which threatens American liberty and undermines the Constitution far more than anything that happened in the Watergate scandal, presents us with a historic opportunity. Instead of merely investigating and holding committee hearings, we can seize the moment and recognize that 101 years ago, our nation made a terrible mistake. We can admit that the 16th Amendment, requiring people to disclose to the U.S. government information so personal that they wouldn’t ordinarily reveal it even to their closest family and friends, was a grave mistake, and reverse course.
Besides being unjust and an invitation to tyranny, the income tax is a demonstrably inefficient way to raise revenue for the government. For example, research commissioned by Americans for Fair Taxation found that the U.S. economy loses at least $200 billion every year just trying to comply with the income tax.
Let’s be done with the corruption, arrogance and waste of the IRS and recover our privacy and prosperity at the same time. Let’s sunset the entire unwieldy Internal Revenue Code at a date certain, like 2020 (has a certain visionary ring to it, doesn’t it?), and then work out a simpler, fairer system like the Fair Tax, or another consumption tax. Why not let Americans keep their money until they decide to spend it at the cash register for goods or services?
There’s a kind of delicious irony in the possibility that public shock at IRS abuses could lead to the agency’s own demise — and the restoration of principles of freedom and privacy that go back to 1215. The Magna Carta’s 800th anniversary next year is a worthy target for this reform to begin.