How We Became the United States of Welfare - Part 1
by Robert Morley
“Give me liberty or give me death!” Patrick Henry said famously. This Founding Father would likely have been shocked at the litany of taxes imposed on the modern citizens of the nation he helped shape.
Today’s Americans pay federal and state income tax, state and local sales tax, state and local property tax, federal and state unemployment tax, Social Security tax, Medicare tax and school tax. Some pay capital gains tax, dividend tax, interest tax, luxury tax, gift tax, and utility taxes such as phone tax, which includes state and local tax, state and local surcharge taxes, federal excise tax, universal service fee tax, possibly also minimum usage surcharge tax, and recurring and non-recurring charges tax—whatever that is.
They also pay tax for the privilege of getting married, for purchasing a car, for licensing a trailer, for having a water well or septic tank, even for sitting down at home and enjoying a glass of wine with dinner. The list doesn’t come close to ending there.
And Americans are hardly the world’s most heavily taxed people. Many Western nations are burdened with effective tax rates in excess of 30 percent per year. In some countries, such as Sweden and Israel, the rate is closer to 60 percent.
But don’t governments need high taxes to operate? The answer, believe it or not, is NO.
An entirely different system requires a simple 10 percent on your annual earnings, 10 percent saved for your family to spend at special celebrations, and then every third year an additional 10 percent to support widows and orphans. No other complex, confusing taxes. No fishing for loopholes. No 16,000-page IRS tax code. Efficiency and simplicity!
Which sounds more ideal to you?
This contrasting system, used by the ancient nation of Israel, is called tithing. You can read about it in Leviticus 27:30-33 and Deuteronomy 14:22-29.
Actually, this system was in use long before Israel was founded. It was practiced by Abraham (Genesis 14:20) and Jacob (Genesis 28:20-22). Much later, the apostles and Jesus Christ Himself (Matthew 23:23) followed this system in addition to submitting to Roman taxes (Matthew 22:21).
The results of rejecting this system are clearly evident, historically and currently. The people of ancient Israel rejected God’s simple system of government. They demanded a king and an administrative system like other nations. Consequently, they and their descendants have paid the price ever since. (For documentation regarding where the modern-day descendants of ancient Israel are today, request a free copy of The United States and Britain in Prophecy.)
The Prophet Samuel warned Israel what would come of their request: “This will be the manner of the king that shall reign over you: He will take your sons, and appoint them for himself, for his chariots, and to be his horsemen … and will set them to ear his ground, and to reap his harvest, and to make his instruments of war .… And he will take your daughters to be confectionaries, and to be cooks, and to be bakers. And he will take your fields, and your vineyards, and your oliveyards, even the best of them, and give them to his servants. And he will take the tenth of your seed, and of your vineyards .… And he will take your menservants, and your maidservants, and your goodliest young men, and your asses, and put them to his work. He will take the tenth of your sheep: and ye shall be his servants” (1 Samuel 8:11-17).
Under poor kingship, Israel’s governmental support system quickly grew from simple tithing to the confiscation of property and businesses, the young being drafted into the army, and the people being heavily burdened by the rulers.
Just two generations after rejecting God’s form of administration, taxes and big government under King Solomon were instrumental in causing the northern tribes in Israel to revolt and split from Judah (1 Kings 12). Yet revolution did not solve any problems, because it never fixed the
cause of burdensome government and high taxes.
Origins of the Welfare State
America, like many nations, finds itself in a similar situation today. It has become a nation of big government and big taxes. Contrary to the principles set forth by America’s Founding Fathers—principles involving a small, efficient, service-oriented government; principles that helped make the American republic great—America has morphed into a social welfare behemoth.
And truth be told—forget King George, the American Revolution and the Boston Tea Party—today Americans love taxes. In fact, a huge swath of Americans wouldn’t know how to survive without taxes. Shocked? Disagree?
Ask yourself: What is the root cause of taxes and big government? Once you realize what it is, you will see why America is addicted to taxation, and why that is so bad for the nation.
According to author Durham W. Ellis, this is what historian Alexander Tyler said about the fall of the Athenian Republic: “A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves money from the public treasury. From that moment on, the majority always votes for the candidates promising the most money from the public treasury, with the result that a democracy always collapses over loose fiscal policy .…”
That succinctly sums up why America’s financial condition is deteriorating so quickly.
Both Republicans and Democrats have become parties of big government. The main difference is that some Republicans claim they are for small government, while Democrats are open about their support for increased government and entitlement spending—though even this difference is fast disappearing.
As Wall Street Journal editor Bret Stephens recently wrote, “W
e have a 40-year history of Republican policy, which says, We’re in favor of what the Democrats are in favor of, only less so.”
The fruits prove this out. Not one administration since 1960 has balanced its budget, and government spending continues to grow unabated. The continually elevating federal debt ceiling, which has become a farce, is breached year after year. In July, Treasury Secretary Henry Paulson warned Congress that unless the cap was raised again, the United States would be unable to pay its bills. The last breach came in March 2006, when Congress was forced to approve an additional $781 billion in federal debt.
Last year, federal, state and local governments spent a massive $4.6 trillion, according to Michael Hodges’s Grandfather Economic Report. The gross domestic product of the U.S. is only $13.1 trillion. That means 35 percent of the economy now depends on government spending.
Government employment has also bloomed, vastly outstripping population growth. Federal, state and local governments now employ one out of every seven workers in the country, according to the Daily Reckoning. That is more than any other sector of the national economy.
In 1946, there were 2.3 state and local government employees per 100 citizens. Today there are 6.4. If government today had the same proportion of employees with respect to its population as it did in 1946, there would be 12.2 million fewer government salaries that current taxpayers would have to pay (Grandfather Economic Report, March 2007).
And to support increased government spending and employment, citizens must work additional hours. This year, “Tax Freedom Day” fell on April 30, which means if you gave the government all your earnings beginning in January, and worked every day including weekends, you wouldn’t have been able to keep a dime until May. One third of the year (120 days) goes just to pay taxes—more than the days spent working for food, clothing and housing combined (105 days). In contrast, back in 1900 you only had to work 22 days to pay your yearly taxes.
If you live in the United Kingdom, or Canada, tax freedom arrived even later—June 1 and June 20, respectively.
Yet, even with all the taxes collected each year, the government continues to spend much more than it takes in, borrowing to make up the difference.