There will always be taxes.
It was Benjamin Franklin who said, “Our new Constitution is now established, and everything seems to promise it will be durable, but in this world, nothing is certain except death and taxes.” Two hundred years later, President Ronald Reagan would say, “Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”
The earliest known system of taxation was in Ancient Egypt around 3000-2000 BC, in the First Dynasty of the Old Kingdom. The earliest and most widespread forms of taxation were in the forms of forced labor and tithe. Under Darius the Great in 500 BC, the Persian Empire had a regulated and sustainable tax system. At the time of the Roman Republic, taxes were collected from individuals at rates of between 1 and 3 percent of the assessed value of their property. In the 17th century, taxes as a percentage of the production of goods were collected in France, the Netherlands, and Scandinavia. It was not until the war-filled years of the 18th and mid-19th centuries that taxes were imposed on income… and those were high. It was a tax of 3 pennies on a pound of tea that led to the American colonies’ revolt against England.
Article I, Section 8 of the Constitution gives Congress the power to “lay and collect taxes, duties, imports, and excises, to pay the debts and provide for the common defense and general welfare of the United States.” This is sometimes referred to as the Taxing and Spending Clause. The Sixteenth Amendment expanded on that clause saying, “The Congress shall have power to lay and collect taxes on incomes from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.” States are also allowed to impose and collect their own taxes, which include, but are not limited to, income tax, sales tax, and property tax.
A federal income tax in the United States was not established until 1861 during the Civil War as a mechanism to finance the war effort. In 1862, Congress passed the Internal Revenue Act, which created the Bureau of Internal Revenue, the predecessor to the modern-day IRS. The Revenue Act of 1916 began the practice of adjusting tax rates and income scales. The original income tax rate was 1 percent for the bottom bracket and 7 percent at the top.
Federal tax brackets are set by law and overseen by the Internal Revenue Service. There are currently seven federal tax brackets with the lowest at 10 percent and the highest at 37 percent.
In the simplest of forms, there are three basic types of taxes: taxes on what you earn, taxes on what you buy, and taxes on what you own. The Tax Foundation reminds you, “It’s important to remember that every dollar you pay in taxes starts as a dollar earned as income. One of the main differences among the tax types… is the point of collection—in other words, when you pay the tax.”
In October 2021, Representative Warren Davidson of Ohio introduced a measure in the House of Representatives proposing a constitutional amendment that would repeal the Sixteenth Amendment and eliminate the federal income tax. If enacted, it would become the second constitutional amendment ever repealed, after the amendment on prohibition. It was met with widespread opposition and languished in the House Judiciary Committee. The odds for its passage are low.
Most Bible readers are familiar with the account of Jesus being tested by the Pharisees, who asked if it was lawful to pay taxes to Caesar. The Savior answered that they were to render to Caesar the things that are Caesar’s and to God the things that are God’s (Luke 20:25). The apostle Paul instructed in Romans 13:7, “Pay to all what is owed to them; taxes to whom taxes are owed, revenue to whom revenue is owed, respect to whom respect is owed, honor to whom honor is owed.”
How then should we pray?
- For IRS Commissioner Rettig as his term ends this month.
- For Douglas O’Donnell as he steps in as acting commissioner of the IRS.
- That federal, state, and local officials would be prudent in their assessments and adoption of taxes.
- For IRS officials as they determine the setting of tax brackets and rates.
- For members of Congress as they consider various proposals regarding imposing taxes or the elimination of them.
- For agents of the Internal Revenue Service to have integrity and transparency as they carry out their responsibilities in the government.
- For Americans as they determine the tax bracket to which they belong and file the appropriate forms and pay fees.
- For voters in the U.S. as they make choices on their ballots involving state and local revenues.
