When the federal government spends more each year than it collects in tax revenues, it has three choices: It can raise taxes, print money, or borrow money. While these actions may benefit politicians, all three options are bad for average Americans. -Ron Paul

Where did it all begin?

One of the most reviled of all US Federal agencies is the dreaded IRS or Internal Revenue Service. This agency created to help fund the US Federal Government’s never ending spending appetite has its roots in rebellion. In early 1861 President Abraham Lincoln, looking at the imminent secession of Southern states and the loss of their lucrative seaports, began looking at ways to make up lost revenue. Lincoln made inquiries of his cabinet members Edward Bates, Salmon Chase, and Gideon Welles wanting to know if he had the constitutional authority to collect duties on goods and services as well as import tariffs and property taxes. The end result was the Revenue Act of 1861 passed on August 5^th 1861 and the first federal income tax statute of the United States. The income tax placed a 3% tax on all individuals whose annual incomes were above $800 per year. By 1862 however realizing the war was not going to be a short affair, the Lincoln administration passed of the Revenue Act of 1862  which established for the first time an Office of the Commissioner of Revenue. It also levied excise taxes on everyday goods and services and established the first graduated or progressive tax system in the US which  separated citizens into multiple categories and taxed them based upon their abilities to pay. As the years would pass the revenue generated from this law was not enough to pay the burdensome debts the war was amassing and subsequent legislation would need to be passed. After the Civil War and ten years after the original income tax law was passed the largely unpopular law was repealed, only to be revived once more by Congress in 1894. The subsequent year saw the Supreme Court rule the law unconstitutional, based upon the fact that the income tax was a direct tax not apportioned according to the population of each state. In 1909 President Taft would recommend Congress propose a constitutional amendment that would give the government the power to tax incomes without apportioning the burden among the states in line with population. In 1913 Delaware became the 36^th and last state needed to ratify the 16^th Amendment which established the federal government’s authority to enact income tax.

What’s next?

All governments throughout world history have levied taxes on its citizens to help pay off debts accrued by war and or other expenditures. Our country is no different and at times has had tax rates as high as 77% of income. Image that, 77 cents for every dollar earned was going to the government. That’s simply outrageous. If we allow our leaders to keep spending money like they are doing now we may well see tax rates that high again.

This is why it is imperative now upon all our citizens to understand the implications of Lincoln’s legacy, the establishment of the federal income tax system, and all that it entails. We are trusting our elected officials with our money and should they continue on the deficit spending track there will be dire consequences for all of us,  to include higher taxes.

In my opinion we cannot afford to maintain global hegemony for much longer. We simply do not have the revenue to be the world’s beat cop, and defender of the free world. It’s time for the other nations to pick up some the slack.

It’s time to win the war for peace as we cannot afford to wage war in perpetuity. No nation can do that and survive.

We need to look at ending entitlement programs that do not change people’s lives for the long term. Investment in education and skill training instead of extending unemployment benefits for example.

We need to change our foreign policy so that it’s not so reliant on dollar diplomacy. We cannot afford to keep giving billions and billions in aid to foreign nations, some that do not even like us or have the same values.

Our leaders need to represent WE the People and not spend our hard earned money that the IRS is so hard at work taking away from us.