John Marshall in the Supreme Court case, McCulloch v. Maryland: Daniel Webster, in arguing the case, said “An unlimited power to tax involves, necessarily, a power to destroy.”
What we are seeing from the eruption of the TEA Party IRS scandal is the taxing power, or the taxing authority’s power, being used to destroy the political opponents not just of the Democrat party but of the federal government.
The income tax is supposed to serve a single purpose; to raise revenue for the federal government so that it has the funds to execute its constitutional obligations. The IRS was established to manage the raising of these revenues.
Since the passage of the 16th amendment that established the income tax, the tax code has morphed into a means for government to control, manipulate, punish, reward, coerce and drive the social changes desired by Washington elitists. It is an abomination.
But unfortunately for us it is also the primary source of Washington’s power, power they will not voluntarily relinquish. For all the whining that Nancy Pelosi and the Left do over the Citizens United decision, the tax code is the real source of the problem.
Would lobbyists exist if not for the tax code? Unfortunately yes, but in much smaller numbers I believe due to Congress’ other source of power; regulations.
But without the tax code being used to reward and punish there would be little need of lobbyists and the mountains of cash they spend in DC to influence Congress. Lobbyists exist to seek favors, exclusions, waivers, etc. for themselves or punishment for their enemies via the tax code or regulations.
For all their protestations to the contrary, Congress loves the money that lobbying rains on them as it allows them to run for election and reelection in perpetuity. They are drunk with the power the tax code allows them to exercise over individuals, corporations, and as we’ve recently discovered, non-profits.
We have no need for the current tax code. It could be replaced in its entirety with a flat tax, fair tax, or national sales tax administered by an IRS a fraction of its current size. There is no need for the multitude of taxes (income, Social Security, and Medicare) and their multitude of collection, audit, enforcement, and management bureaucracies. There is no need for corporate income taxes or the tens of thousands of corporate tax departments and tax specialists required to comply with the ever changing tax laws.
But nothing will ever change because of Congress’ lust for power. In addition to Congress, what other special interests are too invested in the current tax code to permit it to change? The 150k members of the powerful National Treasury Employees Union (NTEU), tax attorneys orgs like the National Association of Tax Professionals (NATP), tax software companies (TurboTax), Tax preparation companies (H&R Block et al).
As we’ve seen over and over again, it doesn’t matter much anymore what We the People want, it only matters what the special interests want. So, the IRS and the current tax code are here to stay.