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Chapter 2, Our Lousy, Lying, No Good Government

  -Please post your thoughts and suggestions at the end of the chapter. Thanks for everyone's time and efforts as always!

Plenty of Taxation Without Representation

J

ames Otis Jr., an ardent Boston politician from the Revolutionary War often overlooked by high school textbooks, once brilliantly asserted that, “Taxation without representation is tyranny.” [1] If the government has the power to choose to take your money, you should at least have the right to choose your government. It seems like a simple concept. In fact, your whole life has been filled with educators drilling that exact phrase into your head. You have heard it on the radio, in classrooms, on television, and perhaps the phrase has even been the subject of mockery in popular culture on occasion. We all know its general meaning but few of us have questioned exactly what “representation” is. Our government is divided into three distinct branches, all of which exist to serve us.[2] The branch of government meant to most directly represent the people is the Congress. The House of Representatives, the lower house of Congress, was designed with the intention of representing citizens based upon the demographics of districts that were formulated within each state. This allowed states with larger populations to have several representatives so that the people within that state were better represented. Think of it in terms of states. New York has roughly 19.5 million people and Wyoming consists of 532,000 American citizens.[3] If you live in Wyoming, your vote is 1 of 532,000. In New York, however, your vote is only 1 of 19.5 million.[4] New York voters are clearly underrepresented compared to the voters in Wyoming. To fix this, our Founding Fathers advocated for a system of electing officials that promoted several districts within larger states.

 Throughout our history, populations steadily grew and the number of representatives within the House of Representatives grew as well. Everything had gone according to plan, sort of. James Madison wrote in The Federalist Papers, a work comprised of numerous essays written by John Jay, Alexander Hamilton, and Madison, that:

 

Allowing to this case the weight which is due to it, and comparing it with that of the House of Representatives as above explained it seems to give the fullest assurance, that a representative for every THIRTY THOUSAND INHABITANTS will render the latter both a safe and competent guardian of the interests which will be confided to it.

 

            Representation, according to James Madison, was dependent upon the ratio of 30,000 citizens to 1 representative. Whether the Founding Fathers supported this ratio is not as important as why they supported a ratio at all. Why not simply establish a set number of representatives in Congress and move district lines within states to account for population changes? Mr. Madison answers:

 

It is a sound and important principle that the representative ought to be acquainted with the interests and circumstances of his constituents. But this principle can extend no further than to those circumstances and interests to which the authority and care of the representative relate. An ignorance of a variety of minute and particular objects, which do not lie within the compass of legislation, is consistent with every attribute necessary to a due performance of the legislative trust. In determining the extent of information required in the exercise of a particular authority, recourse then must be had to the objects within the purview of that authority.[5]

           

In order for a representative to understand what the general will of his or her constituents is within his or her district, there must be a limited number of people and land to account for. How can we expect Congressman Cynthia Lummis from Wyoming, for example, to represent the people of Clark, Wyoming with the same knowledge and ability as she represents Cheyenne, Wyoming, which is nearly 428 miles away from the city of Clark? Cheyenne has a population of 53,011 and Clark, WY doesn’t even have a concrete population listing, although its Wikipedia listing has the population listed as 300. There is simply too great of a difference in both population and region for one representative. So the Founding Fathers allowed for continuous growth in membership of the House of Representatives. This tradition continued for most of our history, with periodic increases in membership in Congress. In the year 1800, at the very beginning of our nation’s birth, the House of Representatives had 106 members that represented 16 states with a total population of 5,308,483.[6] For every 50,080 people, there existed 1 representative in the House of Representatives. By 1900, the nation’s population had swelled to 76,212,168. This represents a population increase of 1335.7% over the 100 year period. The number of states also radically changed from 16 in 1800 to 45 in 1900. Membership in the House of Representatives increased from 106 to 357, an increase of 236.8%.[7] Clearly population growth surpassed the growth in representation. This can, for the most part, be explained by the simple fact that there was a tremendous increase in land over that period of time. There were only 16 states in 1800 and there were 45 in 1900. In 1900, there existed 1 representative in the House of Representatives for every 213,479 people. Our country was steadily becoming underrepresented. In 1930, when the American population stood at 123,202,624, there were 435 representatives in the House.[8] Just 30 years after the turn of the century, the nation had grown by 61.7% and the membership in the House had increased by 21.85%. Only 3 additional states had been added over that period. This figure shows the country was still growing faster than its representation but that the figures had become convncingly under control. No longer were we seeing massive increases in population without similar increases in House membership.

            Curiously, that trend of positive representation died in 1912. By the year 2000, our population once again skyrocketed to 281,421,906, an increase of 128.42%.[9] Representation in the House of Representatives, however, increased by an astounding 0%. We did not add one representative from 1912 to the current year 2009. In 1912, the population was an estimated 95,335,000 with 435 representatives. There was 1 representative in the House for every 219,161 people. Our current population is estimated at 306,500,000.[10] We currently have 1 United States Representative for every 704,597 American citizens. Maybe it’s just me but that seems to be a long way from the 30,000/1 ratio supported by our Founding Fathers in The Federalist Papers.

            The French National Assembly has 577 members representing a total population of 65,073,482 for an average of 112,778 citizens per representative. [11] The State Duma, the lower house in Russia, has a ratio of 315,342 citizens per 1 representative.[12] Ironically, the lower house of the United Kingdom called the House of Commons, has the significantly better representation ratio of 95,375 citizens per 1 representative.[13] What have we become? Russia, France, and even England, the same country we revolted against in large part because Americans were underrepresented, all have more representation than we do. Thank God we have the brilliant mind of Barney Frank to make up for this discremancy.

            We have established that Americans are not represented. We get it; our Congress is too small. But what are the implications of this? Is bigger necessarily better? After all, Russia has more representation than America, but I highly doubt that the citizens of Russia are safer, more secure, or better represented.

            A lack of representation is not the sole determining factor for whether or not a legislature is successful. It is, however, a major contributor. Even an extremely ineffective legislature will show progress if it simply expands. Like many of the arguments made within this book, it is a common sense solution. Thirty-Thousand.org, which strongly advocates for better representative ratios in America, has laid out several logical motivations for increasing the number of representatives in our House of Representatives. The following expands upon the arguments they point out throughout their web pamphlet.[14]

            Perhaps the most obvious point is that large districts create time constraints. Because all representatives have two-year terms, most congressman are in a perpetual state of campaigning, espectially beginning in the summer of their second year. Congressman Kenny Marchant is a representative from Texas District 24, a primarily suburban area between Dallas and Fort Worth. His district is 324 square miles and has a population of roughly 652,000. Campaigining in an area this large with a significant amount of constituents is clearly a daunting and time consuming task. If all congressional districts were limited to 50,000 people, Marchant’s constituency base would be reduced by over 92%. This would allow more time for conressmen like Kenny Marchant to do their jobs in Washington instead of making boring stump speeches and even worse campaign commercials.

            Another fundamental flaw in having large and unbalanced congressional districts is that each district has a completely different population. This effectively leads voters in certain districts to have more voting power than voters in other districts. In 2006 for instance, Massachusetts Congressional District 8 had 137,557 voters. Essentially, each person that voted comprised .00072% of the total votes. Simply put, every voter had 1 vote out of 137,557 votes.[15] A voter in a slightly smaller voting district that has a smaller voter turnout will inevitably have greater power in their vote. One vote out 95,000 has more value than 1 vote out of 137,557.

            Large congressional districts leave voters vulnerable to political promises. We do not know anything about our congressmen, and it is nearly impossible to truly be aware of what kind of people they are because of information centralization. Media sources as well as constituency groups define how we view our congressmen. Congressional districts are so large that it is impossible for average working Americans to have personal access to candidates at the federal level. All congressmen are required to lhave residency within the district they represent. In larger districts, this Constitutional mandate has little meaning. Your congressman may live in your district and reside 350 miles away from you at the exact same instance. If districts were limited to 50,000 constituents, however, districts would be minimized in size and scope. Constituents would have better access to their congressmen, live closer to them, and would have a greater opportunity to interact with their representatives outside of Washington.

            Smaller congressional districts breed a particular kind of candidate. It takes a great deal of wealth to expose yourself to 600,000 Americans over hundreds of miles. Because of the amount of money required to run, congressmen are often wealthy, willing to do anything to receive campaign contributions and support from special interest groups, and they tend to be forced into political alliances their principles would not ordinarily allow. Few congressmen do not have to sell their soul for the sake of campaign finance.

            Poor representation allows medocre politicians the opportunity to stay in office for extended periods of time. Of all those congressmen in the 108th Congress who sought re-election for the 2005 year, 97% were successful.[16] [17] It is incredibly difficult to challenge an incumbent congressmen because a sitting representative has a clear advantage in the amount of exposure they have received while in office. Exposure is less important in smaller congressional districts because it is far easier to reach 50,000 citizens instead of 500,000 citizens.

            America has lost its representation. This fact has clearly been laid before you. What has not been fully explained, however, is why. Why did our government choose to abandon representation? Why haven’t Americans responded in protest?

            In 1920, Republicans took control of Congress from the previously dominant Democrats. Large economic and social shifts over the course of the decade would have oridinarily forced the House of Representatives to expand to 483 seats. Because of the nature of the population shifts, however, Republicans opted not to make changes. Urbanization was sweeping the nation as many young Americans moved away from rural family farms and into larger cities. Immigration was also at stunningly high numbers, adding to tremendous urbanization. Republicans, having just taken control of the House of Representatives, the Senate, and witnessed the election of President Taft, feared losing their newfound power. The primary motivation for this was that redistricting would have forced numerous congressmen out of their districts and forced them to run in newly formed districts.[18]

            In 1929, the final nail entered our coffin with the signing of the Reapportionment Act of 1929 by President Herbert Hoover, which ended the creation of new congressional districts with the one exception of the formation of new states. District lines could be re-drawn, but new districts could never be formed. The end of newly formed districts was not the sole result of work done by the Republicans.

Like most American problems, Democrats and Republicans often unify to make equally bad decisions. Democrats have, after all, controlled Congress numerous times since 1929 and have never reversed the legislation first passed by the Republicans. Why? Democrats and Republicans alike recognize that the formation of new districts put incumbent members of Congress at risk of losing their seats. Additionally, think of the tremendous cash cow that congressional seats have become. Political action committees, special interest groups, and wealthy businessmen have made being in Congress lucrative. If you were to dramatically expand our national legislature by thousands of seats, there would be less money to go around and far less wealth to amass by simply holding office. The decision to keep our legislature small is the work of pure greed.

Why don’t Americans do something about this apparent problem? The simple answer is that they do not know. Did you know that Congress has not expanded in nearly a century? Until a few days ago, I did not either. Congress certainly will not bring this issue to your attention, and the media is not interested in stories lacking the sex appeal of Drew Peterson, Perez Hilton, or Reverend Wright. I repeat, nothing says sexy like Perez Hilton.

Most Americans believe income taxes are as much apart of America as apple pie and baseball.Taxes are to be endured. Our parents endured them, our grandparents suffered through them, and so must we. But America was, for the majority of its history, a nation that despised the use of income taxes. It was a widely held belief that personal income taxes were unconstitutional. What business was it of the government to step into our personal lives and take away our hard earned income? This general attitude against taxes was evident in the mere fact that income taxes were only applied in the rarest of circumstances until 1913.[19] The year 1913 brought Americans the gift that keeps on giving via the 16th Amendment:

 

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.

 

Prior to the passing of this amendment, income taxes were only levied in extreme circumstances such as the Civil War.[20] In fact, the Constitution specifically mandated that direct taxes on the American people could only occur by way of a tax on actual states based upon their population.

            Following the passage of the 16th Amendment, Congress passed the Revenue Act of 1913. This act, which was passed only one year after Congress decided not to allow the further expansion of the House of Representatives, applied a 1% tax on personal incomes above $3,000 and an additional 6% tax on incomes at or above $500,000. Before we move forward, it is important to remember why we had not had personal income taxes up until this point; our Founding Fathers despised them. They believed in tariffs, which are taxes on foreign goods, because they felt that taxing foreign products was the best way to bring in wealth to the federal government while protecting domestic industries. Tariffs were the primary form of federal revenues for most of American history as a result of this concept. Founding Fathers believed in taxing products such as whiskey or tobacco because people had the choice to purchase these kinds of products. Until 1913, our government, our people, and our Constitution expressly committed to the opposition of personal income taxes.

By 1918, the top rate of income tax exploded to 77% in order to maintain funding needed to fight in World War I. Unlike the income tax imposed on Americans during the Civil War, which eventually was repealed, income taxes in 1925 for the top rate were 25%. By 1932, the Congress had gone mad with power and fear from the Great Depression, the highest rate of taxes exceeded 60%. Prior to the 16th Amendment, this kind of abuse would have been prevented by the Constitution. A new era in American politics was born with the end of protections for average Americans. Taxation could now run rampant without a single safeguard. By 1945, the government was taking 94% of all incomes that exceeded $200,000. From what set of rights does the government derive their power to tax any man or woman’s income at a rate of 94%? Regardless of income, why should those individuals who have attained success be punished to the extent that the government deems their rights unworthy of our attention? Americans were steadily receiving less representation and more taxation. It was not until 1982 that the top marginal tax rate was reduced to 50%.

Shouldn’t a government that wishes to overtax its people at least allow us to have proper representation? I cannot think of a more perfect summation of what living beneath a lousy government entails; underrepresented, overtaxed, and convinced of the incompetency of leadership.




[1] James Otis Jr. is perhaps one of the most underrated American heroes in our history. Few Americans today know his name and even fewer know his accomplishments. He was a local Boston politician in the late 1700’s and gained the admiration of John Adams. Adams once said of Otis Jr., "I have been young and now I am old, and I solemnly say I have never known a man whose love of country was more ardent or sincere, never one who suffered so much, never one whose service for any 10 years of his life were so important and essential to the cause of his country as those of Mr. Otis from 1760 to 1770."

[2] Serving the people is, of course, completely theoretical. Politicians are far more likely to make decisions that serve themselves.

[3] "U.S. Population by State, 1790 to 2008 Infoplease.com." Infoplease: Encyclopedia, Almanac, Atlas, Biographies, Dictionary, Thesaurus. Free online reference, research & homework help. Infoplease.com. 26 May 2009 <http://www.infoplease.com/ipa/A0004986.html>.

[4] Obviously there are fewer eligible voters than there are people in each state. There are even fewer people who actually go out to vote. The point I am trying to make is still valid however even if the numbers are not exact.

[5] Hamilton, Alexander, James Madison, and John Jay. The Federalist Papers. New York: Bantam Classics, 1982.

[6] "History:1800." Census Bureau Home Page. 27 May 2009 <http://www.census.gov/history/www/fast_facts/012342.html>.

[7] "History:1900." Census Bureau Home Page. 27 May 2009 <http://www.census.gov/history/www/fast_facts/012352.html>.

[8] "History:1930." Census Bureau Home Page. 27 May 2009 <http://www.census.gov/history/www/fast_facts/012355.html>.

[9] "History:2000." Census Bureau Home Page. 27 May 2009 <http://www.census.gov/history/www/fast_facts/012362.html>.

[10] "U.S. POPClock Projection". U.S. Census Bureau]. http://www.census.gov/population/www/popclockus.html. 

[11] INSEE, Government of France. "Bilan démographique 2008". http://www.insee.fr/fr/themes/document.asp?ref_id=IP1220&reg_id=0#inter1. Retrieved on 2009-01-13. 

[12] Population data for 1992-2008 from Russian Federal Service of State Statistics (Rosstat)

[13] "Eurostat estimate". http://epp.eurostat.ec.europa.eu/pls/portal/docs/PAGE/PGP_PRD_CAT_PREREL/PGE_CAT_PREREL_YEAR_2008/PGE_CAT_PREREL_YEAR_2008_MONTH_12/3-15122008-EN-AP.PDF. Retrieved on 16 October 2008.

[14] Thirty-Thousand.org - Return the House of Representatives to the People (Home Page). Thirty-Thousand.org. 29 May 2009 <http://www.thirty-thousand.org/index.htm>.

[15] CNN.com 2006 election results.

[16] The 108th Congress existed between January 3rd, 2005 to January 3rd, 2007.

[17] Thirty-Thousand.org - Return the House of Representatives to the People (Home Page). Thirty-Thousand.org. 1 June 2009 <http://www.thirty-thousand.org/index.htm>.

[18] "History:Apportionment Legislation 1890 - present." Census Bureau Home Page. United States Census Bureau. 30 May 2009 <http://www.census.gov/history/www/apportionment/011651.html>.

[19] Tariff Act, Ch. 349, 28 Stat. 509 (Aug. 15, 1894).

[20] This personal income tax was the first income tax imposed on the American people. It came by way of the Revenue Act of 1861. The total tax imposed was 3% on all incomes that exceeded $800. By 1862, the tax rose to 5%, but only for incomes above $10,000.

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Why Raising Taxes On The Wealthy is Not a Good Thing

Tax cuts for the wealthy is one thing neither Barack Obama nor Hillary Clinton support; yet, it is possible that tax cuts for the rich, along with tax cuts for everyone else, is actually a good thing for the economy. First let's just think about the actual theory that goes into this: The main idea behind giving tax cuts for the wealthiest 1% of Americans is that they are the sector responsible for over 80% of our wealth and the majority of our jobs. This is, whether you like it or not, a simple fact. (And by the way, I do not like it.) But, if you give tax breaks to the wealthiest 1% and small business owners, then what you do is give companies, small businesses, mom and pop stores, and virtually ever piece of America's economy more money to spend on expanding their businesses rather than using that money to pay taxes.

One of the first principles of economics is the idea that within a free-market economy such as our own, any taxes or expenses placed on a business will simply be passed on to the consumer through the price of the product. Therefore, if you tax big business at a higher rate than you tax the rest of Americans, then the cost of producing that product (which includes the taxes charged by the government) will automatically be included through the price.

Secondly, increasing taxes on the richest 1% includes small businesses, which means that it is not only the Wal-Marts and McDonald's of the world that are going to be hurt by increased taxes. Of the richest 0.5%, which accounts for 750,000 taxpayers, two-thirds report small business incomes.

During the Ronald Reagan years, (Hate him or love him, it proves my point) tax revenues increased 28% throughout the 1980's. The reasons deficits ensued is because spending increased by 36%, outweighing the gains caused by tax cuts.

Also, in 2005 and 2006, tax cuts on the wealthy led to increased tax revenues by 14% each year. Also, tax revenues at the beginning of 2007 had totaled 2.4 trillion dollars from 2006-2007. This total is $400 billion dollars higher than the collection peak of 2 billion dollars in 2000, the end of the Clinton years.

The economy is struggling now, but those struggles have NOTHING to do with tax breaks. The housing market, poor choices by consumers, and high gas prices are causing our current (or future, depending on how you look at it) recession. I'm not, by any means, saying Bush is doing the right thing. Spending is increasing year after year...but his tax cuts are the problem with the economy as the tax revenues prove beyond a reasonable doubt.

In recent American history, high tax rates often lead to poor economies. Under JFK, who inherited EXTREMELY high tax rates, the unemployment rate was:

1961   6.7%

1962   5.5%
1963     5.7%

Following JFK's terrible death, the implementation of his tax program under Lyndon Johnson, which led to tax cuts for the wealthy led to very low unemployment rates:

1964:  5.2%

1965:  4.5%

1966:  3.8%

1967:  3.8%

1968:   3.6%

1969:   3.5%

Under Jimmy Carter, who had marginal tax rates up to 70% for America's wealthiest few, the economy crumbled.
Unemployment rates under Carter:

1978:   6.1%

1979:   5.8%

1980:   7.1%

1981:   7.6%

1982 (carried into Reagan's term): 9.7%

Under George Bush's tax cuts for the wealthy, the unemployment rate for the last three years has been under 5%, currently standing around 4.8%.

Only three of Bill Clinton's eight years in office had unemployment rates lower than the current unemployment rate.

Maybe taxing the rich at higher rates isn't such a good idea.
 
Justin Haskins
Author, Saving America
 

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