Taxation is Theft

In the following video Judge Andrew Nepolitano discusses the constitution. At 9:58 he discusses libido dominandi (The will to power; the desire to dominate; the lust for government.)  More on this lust for control later. I will paraphrase what he says at 17:58.  Knock knock., you open the door to be greeted by men with guns saying give us your money because we want to give it to someone else.  You call the police only to find that they are the police.   Nowhere is this more apparent then when it comes to tobacco products.  The war on tobacco and smokers is leading to smuggling similar to those of the days of the original TEA Party.

The original tea tax was aproximatly 25% and that led to the tea party.  Today the draconian tax on tobacco and tobacco products is far more abusive. In 2009 Congress and President Obama passed SCHIP which increased the taxes on this product from $1.0969 per pound to $24.78 per pound, that’s a wopping 2,159% increase.  If this bill was so popular with taxpayers the lawmakers would have no problem making the case for imposing a tax on everyone rather then inflict a minority of the population with this burden. But the tax insult does not end there.  Wisconsin along with all states imposes it’s own tax and that is 71% of manufacturer’s established list price to distributors.  Now I don’t know what the established list price is so I will figure just the tax on tax and that comes to $17.59 bringing the total for a pound to a wopping $42.37 for the original tax and the tax on the tax.  But the insult does not end there Wisconsin as most states imposes a 5.5% sales tax so if you include the original tax, the tax on tax and the tax on tax on tax the total comes to $44.70.

This tax is imposed on mostly the poor as they are the majority of smokers.

Nationwide, the Gallup-Healthways Well-Being Index reveals that 21% of Americans say they smoke. As the accompanying graph illustrates, the likelihood of smoking generally increases as annual incomes decrease. One exception to this pattern occurs among those making less than $6,000 per year, an income bracket often skewed because many in that bracket are students. Among those making $6,000 to $11,999 per year, 34% say they smoke, while only 13% in the top two income brackets (those with incomes of at least $90,000 per year) say the same — a 21 percentage-point gap.

And this.

The state-funded study found that cigarette taxes hurt poorest smokers the most — that is, they’re “regressive,” the term economists use to describe a tax that hits harder on lower-income folks.

For this study, Research Triangle Institute researchers surveyed more than 13,000 people (focused on New York, but with a national sample as well) to investigate the impact of high cigarette taxes on different income levels. They found that low-income smokers (individuals in families making less than $30,000 a year) spent an average of 23.6 percent of annual family income on cigarettes, way up from 11.6 percent in 2004.

This forced low income smokers to find alternitives.  One such alternitive is little cigars.  These low cost alternitives are of such poor quality that many add flavoring to cover the low quality of the tobacco and fillers in them.  The other alternative was to roll their own using Pipe tobacco which is taxed at a much lower rate at the federal level.  Along come some entrepreneurs to create rolling machines for rental to assist them in this task.  These RYO shops get the bulk of their income from the use of these machines because as can be seen above it is only the government that profits from the sale of tobacco. Now many businesses provide equipment for customers to do it themselves.  Hardware stores rent conduit benders yet they are not deemed electricians, grocery stores provide coffee grinders and yet they are not considered coffee manufactures, the list goes on and on. Yet “big tobacco”, “big parma” through anti-smoking groups and the convenience store owners all lobbied the federal government to end this practice.  First through the TTB and then through congress.  Just this year the senate slipped one paragraph in a 500+ page bill that accomplished this task.   And of course they use questionable scientific methods to accomplish these tasks.

This is not unique to the RYO shops as John Stossel points out in “Illegal Everything.  A lobster importer who imported seafood for decades served 8 years in prison for violating an obscure law in Honduras even though he has never been there as can be seen 5:40 into the video.  6 minutes in shows just how much it costs to fight these draconian laws and it goes into tens of millions of dollars.  17:40 into the video they talk about farmers going to jail for selling raw milk to people who want raw milk.  Here in Wisconsin Vernon Hershberger faces up to 8 years in prison for doing exactly that.


The power to tax is the power to destroy.

This quotation comes from the words of DANIEL WEBSTER and those of JOHN MARSHALL in the Supreme Court case, McCulloch v. Maryland.

Webster, in arguing the case, said: “An unlimited power to tax involves, necessarily, a power to destroy,” 17 U.S. 327 (1819).

Chief Justice John Marshall was at his axiomatic best in the Supreme Court opinion set forth in McCulloch v. Maryland. He propounded several interesting and profound axioms in that decision. The strange thing about these axioms is that they have been permitted to remain in the limited context in which he found use for them rather than being given general application. . . .

The implications of the axioms had already been laid down a few sentences earlier:

These are, 1. That a power to create implies a power to preserve. 2. That a power to destroy, if wielded by a different hand, is hostile to, and incompatible with, these powers to create and preserve. 3. That where this repugnancy exists, that authority which is supreme must control, not yield to that over which it is supreme….

  Thousands of jobs have been destroyed by these acts.  Isn’t it time that we defend the right to work and the right to start your own business?

About Marshall Keith

Broadcast Engineer Scuba Diver Photographer Fisherman Hunter Libertarian
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9 Responses to Taxation is Theft

  1. jonik says:

    To use any public services (schools, roads, police and fire protection, courts, consumer protection, health care, or public lands, or anything in the public commons paid for with tax dollars without chipping into the pool, if above poverty level, is theft.
    Private multi-billion dollar businesses that pay no taxes at all are the biggest thieves.

    • Jonic Healthcare is a separate issue, I am old enough to remember when just about all jobs had insurance. The more involved the government got the higher the cost got. (As usual) Your statement shows the ignorance of leftist think. On one hand you argue that corporations are not people. Well as such they should not pay taxes since only people pay taxes. But the leftist ignorance goes beyond that. Taxes on corporations amount to tax on tax just as the tobacco example above. I good percentage of corporations are owned by middle income people like you or me through our retirement plans whether it be IRA,401K etc etc etc. So they tax your income once before you even get it and then again when you receive it. You have to abandon the leftist groupthink and start thinking with logic and reason.

  2. Beautifully done Marshall! Totally agree! Dunno if I’ve recommended it to you before, but if you haven’t yet done so I’d highly recommend Edmund Contoski’s “Makers And Takers.” One of the few economics-oriented books I’ve read that didn’t immediately put me to sleep. He’s got a talent for story-telling (factual storytelling) to buttress the usually dry arguments in the area that keeps your attention going and he’ makes a VERY strong anti-tax argument.

    – MJM

  3. jonik says:

    Healthcare is a huge public necessity and, like air, must not be a market commodity because, otherwise, there would be no controls of epidemic diseases, for starters, and everyone would be affected by untreated people creating dangers everywhere.
    The entire public needs a situation where the poorest homeless person sleeping under a bridge has proper health care. It must have nothing to do with ability to pay. The only way to achieve such a level of care (as other countries manage) is if everyone chips in according to their means.
    I am glad to chip in for care for that guy under the bridge. It’s about compassion, of course, but it’s also about protecting myself and family from that guy’s diseases, costs of his eventual emergency care, and effects of mental problems.
    As for corporations…if they do not pay taxes, then we will have a massive taking of individuals’ money to pay for the businesses’ use of roads, water, air, bridges, public airwave use, police, fire control, and so on….while not getting one penny as percent of the corporation’s profits. Corporations have no right to our money.

  4. Actually when healthcare was privatized it was affordable. It was government intervention that drove up cost. John Stossel did a show on the subject. It is five parts on Youtube. Here is part one.

    Again corporations are a group of individuals so if you tax the corporation and then tax the individual you are actually taxing the individual twice, don’t you see the flaw in your argument. Add insult to injury the tax on corporations just drives up the cost of the product punishing the poor you claim to protect.

    • jonik says:

      If you buy a cigar, you pay a tax, but part of the price of the cigar will be used by the manufacturer to pay business income taxes. Can’t think of anyplace that this form of “double taxation” doesn’t happen if a product is taxed.

      If there’s one thing that’s affordable, to all, it’s progressive taxes. If there’s one form of taxation that is NOT acceptable it’s Sin Taxes…designed, with that religious overtone, to control legal behavior. Taxes that are intended to serve the public welfare but, instead, go to subsidize wealthy corporations that routinely violate worker rights and environmental laws are also unacceptable.
      Of course, the most unacceptable situation would be No Taxes. Imagine cops and the military and firefighters and public school teachers and senators and other officials all working for free.
      In that case, I guess people would have to just chip in directly to any of those persons. Sounds like a promising idea. Many simply may not care to pay officials to protect us from, you know, Cubans, Venezuelans, “illegal” immigrants, Afghan villagers, Occupiers, pot smokers, and so forth.

      • The so called progressive tax is what caused the cancerous growth in government. It should have been called the progressive debt because the only thing that grew was government and government spending. The only fair income tax is a flat percentage with no deductions. If everyone payed the same percentage the people would demand spending be held in check. As ;long as there are groups getting goodies at the expense of others government is going to grow. On your statement.

        “I am glad to chip in for care for that guy under the bridge. It’s about compassion, of course, but it’s also about protecting myself and family from that guy’s diseases”

        That’s what charities are for. When a charity does not do it’s job you can quit funding it. The government does it at a barrel of a gun and you do not have that luxury.

        The so called progressive tax was enacted in 1913 look at the following graph and look at what happened to debt since it was enacted.

      • jonik says:

        Growth in government means growth of power of the people via their sworn and paid representatives. Trouble is…too many (most) of those “representatives” do more representing of private business interests instead. They are AWOL from those sworn (on bibles sometimes) and paid duties…and fraudulently collecting public pay for doing exactly the opposite of working for the public.
        If you mean government of, for and by the people…we the people would be glad to have “growth”…though it should not have been shrunk in the first place.

        As far as “spending” goes…good grief…look at the spending on illegal “wars” and invasions in foreign lands, spending on surveillance on all of us all over the place, spending on militarizing the police, spending on prisons and the insane drug war, spending to bail Wall Street, spending to subsidize Big Oil and Gas (which sure don’t need the help), spending to subsidize pesticide-drenched Ag Biz (but nothing on organics), spending on infiltration of activist groups, spending on Gitmo and torture, and spending on drones…for starters.

        It’s not a “so-called” progressive tax. It IS a progressive tax…it being based on income levels, not on some flat tax deal which screws the lower income and lets the super wealthy squirm out of their PATRIOTIC duties to proportionately support the basic needs of their own country and its people.

        A lot of things ought be based on income levels. A multi billionaire needs to pay proportionate to his-her income when they even get traffic or parking tickets….or other fines, or tolls or license fees.
        It’s utter injustice when a guy who makes $100 a week has to pay a whole week’s pay for a red light camera ticket, where a Bill Gates gets to pay about what he made in the last two seconds. Less than small change. Ouch.

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