At his daughter Ivanka’s urging, President Trump is showing us his liberal or progressive side by urging Congress to enact tax-code legislation relating to childcare and paid leave. Of course, this shouldn’t surprise anyone given that conservatives have, one, long supported other liberal programs, such as Social Security and Medicare, and, two, have long supported the income-tax code as a method of social engineering.
Trump is providing a valuable lesson for Americans. Not only does income taxation provide government officials to seize whatever percentage of people’s income they want, Trump is reminding us that it also provides a means by which government officials can provide special benefits to people or manipulate them into doing what the government wants them to do.
Trump’s plan apparently will call for tax credits and tax deductions for childcare expenses. Not surprisingly, there are already leftists or progressives criticizing what they believe his plan will entail because, they say, it benefits only the rich and doesn’t do anything for the poor. Others say that the proposed plan is for maternity leave only and, therefore, unfairly leaves out fathers and non-birth parents. Undoubtedly, there will be more fights, more discord, and more conflict once a childcare bill starts getting debated in Congress. That’s always the way it is with social engineering schemes as well as socialist schemes.
It’s important to remind ourselves of what a genuinely free society looks like. It’s a society that exists without any income tax deductions and any income-tax credits. That’s because in a free society, there is no income taxation. People are free to keep everything they earn and decide what to do with their own money, including spending it on childcare, vacations, healthcare, or a new car or saving and investing it.
We are not talking about pocket change here. Let’s assume that 20 years ago, the American people had adopted the libertarian position of an income-tax free society. Let’s assume that they had repealed the federal income tax, which was enacted in 1913. Let’s assume that a family’s income taxes averaged $20,000 a year. Let’s assume that families decided to save that money rather than spend it.
That would mean that families would have the sum of $400,000 in the bank. With compound interest, the amount would be significantly larger.
Like I say, that is not pocket change. It can buy plenty of education, healthcare, childcare, retirement, and other things. Moreoever, that massive level of savings in society provides the capital that leads to rises in the overall standard of living.
Most important, it means that people are free, instead of being dependent on money that government has taken and hands out to welfare recipients, including those on Social Security, Medicare, and Medicaid. It also means that privileged classes of people are no longer receiving special benefits from the government. It also means that people are no longer being manipulated and maneuvered like laboratory rats into doing what the government wants them to do.
That is why our American ancestors lived without income taxation, welfare, and social engineering for the first 100 years of our nation’s existence. They understood that an income-tax free society is a prerequisite for a free society.
Nothing can be done to change the past. But the present and the future can be changed. When a critical mass of Americans decide they have had enough of socialism, interventionism, and social engineering (as well as perpetual military warfare overseas), they will start thinking at a higher level and bring about a monumental shift toward a free society, one that will necessarily entail an abolition of the income tax.
For more insight into this issue, see FFF’s great book Your Money or Your Life: Why We Should Abolish the Income Tax by Sheldon Richman.