Faith in Our Founders: Jefferson on Taxation
by: Valerie Elverton-Dixon on April 23rd, 2010 | 8 Comments »
We are hearing much these days about the founders and their views on taxation. Many people who oppose “big government”, deficit spending, and taxation are warning against socialism. They argue that current tax policy amounts to a redistribution of wealth, that it is class warfare, that it is unconstitutional and against the original intent of the founders. This is a kind of ancestor worship.
Within the context of the American civil religion, there is ancestor worship. This is our reverence for the founders. We invoke them when we want to say that some public policy with which we disagree is taking the country away from the Constitution as crafted by the founders. (My guess is that if we were to speak to the founders they would tell us to think for ourselves. That is why they built processes for amendment into the Constitution.)
Ancestor worship is not unique to civil religion. Many traditional cultures revere ancestors. A fictional example can be found in the movie Amistad. The movie is about the trial of a group of Africans who commandeered a slave ship and attempted to sail back to Africa. Their captors brought the ship back to Boston and a legal battle for their freedom ensued. Cinque, the leader of the Africans spoke of his reliance on ancestors. He said: “I will call into the past – far back to the beginning of time – and beg them to come and help me at the judgment. I will reach back and draw them into me and they must come. For at this moment, I am the whole reason that they have existed at all.”
Later in the movie, John Quincy Adams utters his own prayer to his ancestors, the founders of the United States: “We desperately need your strength and wisdom to triumph over our fears, our prejudices, our-selves. Give us the courage to do what is right.”
When we look back to the founders, we find something quite different from what the anti-tax, anti -government voices would have us believe, at least in the case of Thomas Jefferson. Jefferson, like all human beings, has his limitations. He was deeply wrong about race. However, that is another essay. He counts as an important founder because he penned the Declaration of Independence, was in communication with James Madison and others during the drafting of the Constitution, and served two terms as president of the United States.
He believed that government ought to be frugal and ought to avoid debt. He knew that people hate taxes and that government ought to tax people for new projects rather than add to the debt because taxes would cause the electorate to pay attention. Yet, he argued for flexibility:
“Taxation is, in fact, the most difficult function of government and that against which their citizens are most apt to be refractory. The general aim is, therefore, to adopt the mode most consonant with the circumstances and sentiments of the country.”
What is most interesting about Jefferson and taxation is his recommendation to tax the rich so that the less fortunate would not have to pay for government. This was a means of correcting economic inequality. Writing to Madison he said: “Another means of silently lessening the inequality of property is to exempt all from taxation below a certain point, and to tax the higher portion of property in geometrical progression as they rise.”
Moreover, Jefferson advocated a tax on foreign imports because this would affect mainly the rich. He expected that they would pay “cheerfully.” He expected the rich to shoulder the whole burden of financing the government. Writing to Thaddeus Kosciusko he said:
“The rich alone use imported articles, and on these alone the whole taxes of the General Government are levied. – Our revenues liberated by the discharge of the public debt, and its surplus applied to canal, roads, schools, etc., the farmer will see his government supported, his children educated, and the face of his country made a paradise by the contributions of the rich alone, without his being called on to spend a cent from his earnings.”
The tax would be spent in peace time on “rivers, canals, roads, arts, manufacture, education, and other objects within each state.” He thought wars should be paid for within the years that they were fought and if that was not possible, then “a tax to the amount of the interest and a reasonable portion of the principal will command the whole sum, and throw a part of the burden of war on times of peace and prosperity.” He did not see the need for a military budget. Such would cause wars in his judgment.
Jefferson cherished” peace, economy, and riddance of public debt, believing that these were the high road to public as well as private prosperity and happiness.”
When we look back to our ancestors, at least to Jefferson, we see an expectation for the rich to carry the financial burden of government. As we look today at a federal budget deficit that threatens our current financial security and international standing in the world, it is clear that Congress will have to raise taxes. And since so much of the nation’s wealth is concentrated in so few hands, the rich will have to carry this responsibility. People who make billions of dollars on a Wall Street bet ought to be taxed at higher rates to help bring down the budget deficit. They ought to pay the tax “cheerfully” because the gamble that paid out in billions serves no social function. It produces neither goods nor services to the society at large. Their taxes would benefit the country.
Jefferson’s wisdom was to tax the rich. It is the right thing to do now. I pray our leaders have the courage to do what is right.
(Jefferson’s quotes from “Jefferson on Politics & Government: Taxation http://etext.virginia.edu/jefferson/quotations/jeff1330.htm)



I view taxes as an investment in America’s future. Taxes can help pay for health care, improvements in the environment, better education for all our citizens, etc.
Taxes are for the common good,the public forum and are our civic duty. Taxation can and should insure “life, liberty and the pursuit of happiness.”
For redistributive principles I’m completely fine with a progressive tax structure, though I also respect pragmatic arguments for flat taxes. But relatively little of what large government does has to do with the rich paying for important services or redistribution. Most of government amounts to a clever scam whereby special interests obtain favors at the expense of others. The more government grows, the more likely it is that special interests win. See as one of many thousands of case studies, this Washington Post article on the Army Corps of Engineers,
“In 2000, when I was writing a 50,000-word Washington Post series about dysfunction at the Army Corps of Engineers, I highlighted a $65 million flood-control project in Missouri as Exhibit A. Corps documents showed that the project would drain more acres of wetlands than all U.S. developers do in a typical year, but wouldn’t stop flooding in the town it was meant to protect. FEMA’s director called it “a crazy idea”; the Fish and Wildlife Service’s regional director called it “absolutely ridiculous.”
Six years later, the project hasn’t changed — except for its cost, which has soared to $112 million. Larry Prather, chief of legislative management for the Corps, privately described it in a 2002 e-mail as an “economic dud with huge environmental consequences.” Another Corps official called it “a bad project. Period.” But the Corps still wants to build it. . . .
That’s because the Corps is an addiction for members of Congress, who use its water projects to steer jobs and money to their constituents and contributors. President Bush has opposed dozens of the most egregious boondoggles, but Congress has kept funding them and the Corps has refused to renounce them — while New Orleans has remained vulnerable.”
http://www.washingtonpost.com/wp-dyn/content/article/2006/05/13/AR2006051300037.html
The Environmental Defense Fund has a whole page devoted to controversial projects by the Army Corp,
http://www.edf.org/page.cfm?tagid=493
And, of course, we all know about the billion dollar subsidies to destroy old growth rain forests in Tongass National Forests, as well as the ridiculous Mohair subsidies; for an approach to environmental issues that avoids the extraordinary government destruction of the environment through special interests see,
http://www.flowidealism.org/Downloads/TFP-BrightGreenFuture.pdf
Some of us see Obama’s health care and financial reforms as essentially large scale opportunities for rent-seeking (i.e. opportunities for special interests to take advantage of us). Arnold Kling has a nice brief post on the proposed financial reforms:
http://econlog.econlib.org/archives/2010/04/what_i_think_ab_1.html
For those who are serious about understanding this perspective, start with the literature on public choice theory; the wiki has a good introductory list,
http://en.wikipedia.org/wiki/Public_choice_theory
We are already paying $27,000 per person for every individual in the lower fifth of the income distribution; for a family of four, that is $108,000, more than I’ve ever made for my family of four,
http://www.independent.org/newsroom/article.asp?id=2310
If we gave the poor the money directly, say by expanding the Negative Income Tax, they would be much better off, and the rest of us would be better off if we got rid of the destructive government institutions that degrade the life of the poor (and I say this as someone who spent much of my life creating schools at which poor kids could learn more than they do at government schools). I regard teachers unions as among the most pernicious of all special interests for their endless hostility to any reforms that would help children as opposed to benefit union members; this is why Obama has had the political courage to support charter schools despite the fact that the unions loathe them. The lives of millions of inner city African-Americans are being unnecessarily destroyed by horrible government schools that ought to be eliminated and replaced by private and charter schools.
This issue is not at all about ancestor worship; it is about improving the lives of the poor while preventing special interests from destroying our lives by means of government. It is about being informed about cutting-edge understandings of government and economics. This article shows no awareness of any of these issues.
In order to mend, repair, and transform the world, we must acknowledge the profound dysfunction of large scale government, and find other ways to help the poor and preserve the environment. Those other paths abound (see “Be the Solution: How Entrepreneurs and Conscious Capitalists Can Solve All the World’s Problems” for some suggestions). Until there is a respectful and sophisticated discussion of the concerns of those of us who oppose government growth, there will be no real progress. Accusations of “ancestor worship” are neither respectful nor sophisticated.
Most criticisms against public schools are pretty laughable. Public school teachers have to put up with kids who were never raised with a priority on education – they never get read to, aren’t encouraged to read and aren’t made to do their homework (here is where the merit pay argument falls apart). You think this is going to magically change when they go to a charter school?!? No way! Why would it? What would suddenly change? Do you really think teachers in low-income districts are worse than others? Teachers in low-income school districts work just as hard as students in affluent districts, but the parent expectations in the respective homes are a thousand times different. Period.
And, where do you get your data to support these assertions? For everyone’s information, charter school students in Ohio routinely score lower on Ohio’s tests compared to public school students.
All good – original post and comments, especially Michael Strong. We have to remember that the Founders were a very fractious group. That they were able to cobble together any kind of constitution is a miracle. Jefferson may have been the most internally conflicted of them all. Cognitive dissonance is the operative term. As to the slavery issue, he knew that it was poison for the new republic, but felt it was too contentious to be resolved.
For what it is worth, I have been advocating for many years (see my web site) a simple solution to the tax haters: the tax return should include this instruction – “Enclosed is my tax payment; please spend it as follows – Do spend my money for the following programs; do not spend my money for these other programs.” Working Assets has already demonstrated the feasibility. Not sure if they still do it, but back when I had one of their credit cards, they polled the cardholders on how to spend the portion of profits they would be providing to worthwhile programs. Later, they would send us the results: pie charts illustrating their compliance with our suggestions.
Think of it. No reason to corrupt our Representatives, because we would tell them how to spend the money. If a program does not have popular support it should be eliminated. If you don’t believe in abortions, fine. Your money will not support it. If you want a big defense budget, you should pay for it. Sounds like democracy to me.
Not true.
We often also forget that local government functions were originally funded by taxes on property. Unlike now, most of personal wealth was in property and so this was in effect a wealth tax. The wealthy usually oppose taxation on wealth such as the small Florida “intangibles tax” and estate taxes, but a tax on wealth is inherently fairer and more efficient than a tax on income. For example, a tax on income tends to discourage initiative, while a tax on wealth encourages it. I favor a combination of a small tax on wealth, including an estate tax, with sizeable exclusions (as in the estate tax) and a progressive income tax that is smaller than it is now.
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