Governments have been taxing income in a roundabout way since the beginning of history. The early English "subsidy" (a sur-tax) was related to income, as were some poll taxes, especially the graduated ones.
The first income tax came in the late medieval period, in 1404. Unfortunately, we know very little about this tax. An early English historian, Thomas Willingham (1372-1422), writing shortly after this tax and its records were obliterated, said the tax was to be kept concealed from posterity because it was such an evil. No evidence of it was to be preserved at the Treasury or the Exchequer, and by order of Parliament, every written record of the tax was to be burned.
Another British historian, as late as 1803, called it a "hideous monster without precedent." These words did survive:
A monstrous birth shewn to the world to let it know what could be done, and concealed by historians, that the world might not know what may not or ought not to be done.
The income tax remained rather dormant in Western civilization, but was by no means forgotten. In 1848 a Prussian born young man by the name of Karl Marx published his plans to reform societal ills. He called it the Communist Manifest and it included specific details to accomplish his reforms, the second on this 10 point list being the progressive income tax.
Still an unknown entity to the common man here in the United States, that was to be changed.
Between Abraham Lincoln, Howard Taft and the IRS Americans have brought themselves to believe that the income tax is not only reasonable, but a necessity. Amazing what changes a mere 600 years can bring about in human thought procedure.
Governor Scott Walker must have been in his revolutionary mode earlier this year when he reported that his administration will consider ending the personal income tax as part of a major review of the state's tax structure.
In comments first reported by WisPolitics. com, Walker told reporters at a stop in Pembine that some states without personal income taxes are in better economic shape and are better equipped to compete for jobs.
The Nation's First The State's Largest
Several years ago the Wisconsin Taxpayers Alliance reported on the on Wisconsin's income tax. Due to a combination of policy changes and economic growth, Wisconsin's income tax per person has grown from $38 in 1960 to $1260 in 2011. (Thomas Willingham would not be surprised. )
From 2001 through 2010, Wisconsin 5.5% increase in per capita income taxes was "average" compared to other states. Figures from 2010 returns show the progressivity of the state income tax; that is, those with higher incomes pay a greater share of that income in tax. The progressivity is the result ofthe tax rate schedule and the elimination of the standard deduction as income rises.
Income tax a penalty
A tax acts as a penalty for engaging in the activity being taxed. That which you tax you get less of The income tax penalizes saving, investing and productivity. With the highest income tax ever, is it any wonder that Governor Walker is having a difficult time reaching his goals for new jobs in Wisconsin.
Most CPA's and economists understand the above. They understand that taxes in general, and the income tax especially, hinder economic growth. Several decades ago there was a strong movement to abandon the federal income tax and replace it with a National Retail Sales Tax. The support went pretty high up. Remember Congressman Sonny Bono? Texas Congressman Bill Archer, head of the powerful House Ways and Means Committee? Billy Tauzan, Louisiana Congressman? They were key figures in the effort.
The Fair Tax still hangs around a bit and you hear of it from time to time. The Fair Tax is a remnant of that once very active movement.
Getting rid of the Federal Income Tax is a bit of a pipe dream. Most American cannot fathom living without it. "How would the federal government survive?" they ask.
The fact of the matter is that the United States of America became the most power economic force on the planet without an income tax. And after they got one, in 1913, they immediately managed two world wars and a depression, followed by a burgeoning nanny state. Karl Marx would be proud.
But on the state level abandoning the income tax is at least imaginable. Seven states have no income tax whatsoever. Two only tax certain investments, there being none on salaries and wages. And as Scott Walker notes, many of them, Texas in particular, are doing very well.
Racine Taxpayers Association Board of Directors will support Scott Walker and the State Assembly in getting rid of the Wisconsin State Income Tax.
Sources for this article: Wisconsin Taxpayers Alliance Wikipedia For Good and Evil, Charles Adams WisPolitics. com George Meyers