Monday, June 13, 2011

Taxes, Tariffs, and Protectionism

“A wise and frugal government shall not take from the mouths of the men the bread which they have earned.”

Thomas Jefferson

Our founding fathers left this great and honorable nation for us.  They intended it to offer us freedom, order, prosperity and hope.  These great men knew that the new nation they brought forth needed funding, but they had also saw the idea of a personal tax as evil as the chains that bound them to England.

To avoid this evil they came up with a system of taxation that worked - The tariff system, where the burden was not placed on the people.  For over 120 years this system was kept in place, until our Congress, without the consent of the people, chose to change that system to one that placed the burden squarely on the shoulders of the people.  Supreme Court Justice John Marshall said, “The power to tax involves the power to destroy.”  The country those great men built is the victim of that destruction.  A mere 25 years before being smacked in the face by the income tax of the 16th amendment, the United States Supreme Court declared income tax as being unconstitutional in the case of Pollock V. Farmer’s Land and Trust Company.  Yet in 1913 with the ratification of the 16th amendment, our founder’s plan, the court’s declaration, and our nation had come undone.

What started as a bearable 1% quickly grew higher and higher as our leaders began to spend more and more and found that they could not only grow rich themselves, but control the people with the money they take from them.  Alexis de Tocqueville said, “The American Republic will endure until the day Congress discovers it can bribe the public with the public’s money.”  Our founders fought a war over a 3% tax.  We now pay ten times that amount with national, state, local, and land taxes.  This does not include fees and sales taxes.  Congress’s uncontrolled spending has led to burdensome tax.  King George III would never dream of doing to the colonists as Congress is doing to us.

They argue the need for all the money, but they don’t.  We need to get spending under control and streamline the system.  Then we can return to the system our founders intended us to have: The Tariff system.

James Madison, who is referred to as the Father of the Constitution, said, “sir, a national revenue must be obtained; but the system must be such a one, that, while it secures the object of revenue, it shall not be oppressive to our constituents: Happy it is for us, that such a system is within our power; for I apprehend that both these objects may be obtained from an impost on articles imported into the United States.”  Our founders, like James Madison, were deeply concerned with keeping the burden from the people.   This system not only did that, it also made our industry, therefore our economy, thrive.  Not to mention it taking far less to administer.

Abraham Lincoln said, “The tariff is the cheaper system…by the direct tax system the land must be literally covered with assessors and collectors going forth like swarms of Egyptian Locusts.  By the tariff system the whole revenue is paid by the consumers of foreign good, and those are chiefly the luxuries, and not necessities of life.  By this system a man who contents himself to live upon the product of his own country pays nothing at all.”  He went on, “I don’t know much about the tariff.  But I do know this much.  When we buy manufactured goods abroad, we get the goods and the foreigner gets the money.  When we buy manufactured goods at home, we get both the goods and the money.”

So not only do we keep the tax burden off the people, we protect and promote industry here at home.  This very concept is what made us into not only the world’s ultimate military power, but also the world’s premiere industrial nation.  In less than 100 years after abandoning that proven system, we went from a creditor nation to a debtor nation.  Henry Clay warned of this, “poverty befalls any nation that neglects and abandons the care of its own industry, leaving it exposed to the action of foreign powers – There is a remedy and that consists in – adapting a genuine American system accomplished by the establishment of a tariff – with the view of promoting American industry – the cause is the cause of the country, and it must and it will prevail.”

The detractors of such a system scream that we can’t do such a thing, calling it protectionism.  Like that is a bad word.  They warn that other countries will do the same to us.  Which they may, but what is it that they are making that we can not ourselves?  Heck, that we did not outsource to them?  So if the same product is made here, who cares if they do the same?  What are they actually buying from us anyway?  We also must look at this: they will need us more than we will ever need them.

These same detractors all claimed that the banks and even auto industry needed a bailout.  “They are too big to fail.”  Where was that when they were outsourcing the rest of America’s industry to Third World Nations?  They say we have to protect those jobs, and we do.  But what of the jobs already lost?  We can bring them back and protect the others in one shot, without any bailout, by imposing the tariff system and giving businesses enticements to return their industry here to the United States.  Daniel Webster said, “the true way to protect the poor is to protect their labor.  Give them work and protect their earnings: that is the way to benefit the poor.  Our artisans…were the first to be protected by the Constitution…the free labor of the United States deserves to be protected, and, so far as any effects of mine can go, it shall be.”

What is wrong with a little protectionism?  Is it not better than selling our country and its people to the highest bidder?  The government is supposed to be for the good of the people of the United States, not of India.  So called conservatives are wringing their hands right now, crying “free Market!  Free MARKET!!!”  What of OUR market?  The founders they claim to adore are the very ones that gave us the tariff system.

Tariffs and protectionism are not bad things.  They helped build this nation into the strongest, most respected nation in the world.  We went from English Colonists, who knew nothing but tobacco, to the largest, most powerful nation the world has ever known in less that 200 years.  That meteoric rise was enabled by both protectionism and tariffs.

True, we may have to sacrifice, maybe even cut down those bloated Union wages to cut costs.  But is it not better to take a pay cut than a job cut, because if we continue down this road American industry will not be in America.

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