COMMENTARY BY ANTHONY E. PARENT, ESQ.
Why Peter Schiff is wrong
Senate candidate, and fund investor, fellow Connecticutian (I say that instead of the crude nickname, ‘nutmegger’) Peter Schiff on air, claiming the ever increasing tax brackets are theft and the mob of the majority has no right to seize his private property. :
PETER SCHIFF: First of all, I’m in the top two percent. Right now, I’m paying 45% of my total income in income taxes, both to the state of Connecticut and to the federal government, and if you take the 3% Medicare tax. After the tax hikes go into effect next year, more than half — more than half of my total income is going to go to the government. You tell me, what’s fair about that when medieval serfs pay 25%, I’m paying half? I don’t care what the majority voted to do, they don’t have a right to steal my money just because they vote for it.
Oh boy. Yes the majority can inflict its will upon minority. That’s what it does the best. Schiff confuses our system of government with that of a Republic.
In a Republic, the powers of sovereignty are vested in the people (i.e. a man’s home is his castle) and are exercised by the people, either directly, or through representatives chosen by the people, to whom those powers are specially delegated. Certain rights of the minorities can not be abolished by legislative fiat.
Compared that to our system — a Democracy, where 50.1% beats 49.9%. In a Democracy, the minority has no rights, unless the majority allows those rights. Which is a good thing. You can’t say “mob justice” without “justice.”
So Schiff, being part of the minority, should shut up and pay up. And he should be thankful that he’s left with anything. Cause the majority said so. And that’s the American way.
Oh wait..how did I miss this? Oh it must be because this document is like 100 years old: Article IV Sec. 4 of the US Constitution guarantees a Republican form of government: A form of government where minority individual rights are the priority and given special protection by the Bill of Rights.
So then Schiff’s, error, it appears, is that he confuses our system of government with what is Constitutionally permissible.
Unfortunately, Congress and the Executive do not pay the least bit of attention to the Constitution when it comes to taxes. Not only do businesses and individuals have to pay huge taxes to the Federal and State governments, they lose all rights of privacy if they are audited.
Any Presidential Candidate that talked about the Constitution this past year, such as Ron Paul or Gary Johnson, were considered “nutcases” by the establishment politicians. Further, the citizenry is asking “what the government can do for them.”
Ron Cappuccio
http://www.TaxEsq.com
Ron, I used to be one who thought those libertarians were crazy.
The more I practice tax law, I realize that is the reason why there is such great energy spent to not discredit their arguments, but also totally discredit the men.
I like your url. Good to know a New Jersey tax lawyer for sure.
Thanks for commenting.
Historically, we are a Republic and not a democracy. Most people do not know that our founding was based on libertarian principles. A good friend of mine, I love her dearly, is a staunch Democrat and she explained to me that libertarian views do not count anymore because society has changed. That statement captures the core of the problem: Americans have lost the connection with its founding.
As to taxation, the introduction of the income tax has led to a unprecedented intrusion of privacy. We should replace it with a combination of a flat rate income tax and a general consumption tax. Simple and straightforward. Easy to comply with (if designed properly) and easy to administer. And high yields. Such a tax system would meet standards of both simplicity and of fairness. So why do progressives oppose?
I think the answer, good doctor, is control. Progressivism isn’t about maximizing social or economic utility. It never was. Of course that was the guise to sell it.
As you know, Progressivism starts with a conceit: “Other people are too stupid to know what they really want.” And ends in tyranny.
I do agree with you that flat tax based on income is better. But it is still problematic.
ANY income tax even flat rate is far too intrusive. As it requires the state to act with powers not delegable to it. I.e.,: all power comes from the people. So the government only has powers the people have. Individuals do not have the power to investigate their neighbor’s financial affairs. Therefore, the state can not either. If the state is forbidden from investigating, or auditing, it makes the imposition of any income tax based upon personal income impermissible.
An income taxing regime that would past muster is one that taxes upon any limited liability entity’s income, such as a corp. LLC or LLP. Such entities exist not in nature, but as legal fiction of the state. If something exists because of the state, then the state is free to intrude upon that entities affairs and finances. This is a fair and sensible trade-off. If a company wants limited liability (which could potential offload its social and legal costs to the public when it becomes insolvent) then the state is free to tax it on its income.
I think this is something that the self-identified “anti-corporate” left and the pro-liberty right can agree on. It seems strange that this is the law it is now (but again, the progressive income tax is about control, not maximizing liberty or reducing harmful actions).
If, on the other hand, an individual eschews the protections of limited liability, then that person as kept its right to privacy intact and the state must respect that liberty interest.
Thank you for your insight and thoughful comments.
-A