☕ Brian Domitrovic wants a tariff…or does he?
A tariff is the obverse of the income tax. A tariff consists of specific rates, procured by influence-wielders in Washington, rates whose average is an abstraction. The income tax consists of general rates that are fictions, with specific rates emerging effectively from the back pages of the code, the product of Congressional lobbying and logrolling, with corporate representatives at the handy nearby. Cronyism is what is consistent between the tariff and the income tax. The tariff is honest about this, the income tax dissembling.
Thus did the rise of the income tax at the expense of the tariff beginning in 1913 represent a new dawn for government. The income tax solved one of Washington’s most nettlesome problems: it removed from the light of day the payola at the heart of the procurement of revenue.
And sure enough, with the income tax presenting itself as patriotically taxing the rich—at times with utterly fictional 91 and 94% top rates, from the 1940s until the 1960s, as Larry Kudlow and I marvel at in our recent book, JFK and the Reagan Revolution—government was able to grow where government under the tariff could not. The income tax supervised the rise of the federal government to well over a fifth of national output—from 3% during the era of the tariff.
☕ Also, this quick hit in today’s Wall Street Journal is worth noting: