100 years of income taxes

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A -- -- look at young exactly 100 years ago today the sixteenth amendment the US constitution was ratified allowing congress to impose income tax.

On all Americans I was there but according to our next guest the tax code significantly changed over the past 100 years old -- big time.

And not a good way here to explain -- senior tax policy for -- -- foundation.

-- back picker is good about thanks for being with a before a hundred years ago period 1913 in 1912 how to we pay for everything.

Well there was a much different taxes mostly customs taxes but the main thing was that there was a -- -- revenue coming -- to Washington because and that the federal government was pretty small.

What's that income to ask -- into existence the size the federal government was allowed to grow much much greater.

And we have the great big program we have today because the income task funds it.

So the income tax a bad thing then and his tax policy of tax code -- -- start with -- bloated tax code yeah we keep hearing -- -- massive no one can make heads or tails of it.

It's hurting small business is hurting big business in this country.

So when you look at and a hundred years ago better or worse than it is today.

What's much worse than than it was when it was first -- into law and it's getting progressively worse and there's no doubt that we need fundamental tax reform.

Doesn't -- -- that much momentum for it.

In the next four years I don't think we're gonna be having that what concerns me most actually is never an institute another broad Texaco value added tax are carbon tax that -- and that just as much.

And it will within -- -- years just as much as -- lament that income tax today because it will allow the federal government to grow even larger than it is right now.

-- were quickly some history.

What was the highest percentage of tax and and maybe the laws over the last hundred years and would you ever but will we ever have a flat tax in this country.

Highest was 91% that was back at all as early as that's in 1960 and we've been down it's 48%.

-- -- -- the 1980s after the 1986 tax reform.

You know a flat tax is the goal -- the -- that we'd like to see we've been -- for for a long time.

I don't -- we're gonna see in the near future but it would be much better for the economy much better for the country.

So this notion -- -- income tax raising income tax rates that's great for the economy right that's great for revenues in Washington but that's not the case at all actually.

Right all of -- no matter how high the rates and get 91%.

Back in the fifties and sixties and 20%.

I think it -- recently in the last twenty years or so.

Still -- income tax averages raising about 89% of gross domestic product it never can get a more than that.

Because people change of behavior raised at too high they cut back on working investing -- taking risks revenues they'll commit because the economy grows slower.

I when rates are lower they take on more risk they work more they invest more and and revenue comes in so.

The income tax really doesn't -- how much current revenue coming to Washington that's why I'm so fearful of another broad based tax that allows the government to grow much broader.

Then -- that.

Well I have fun at your 100 year old birthday party today -- that's -- -- celebrate here.

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100 years of income taxes

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