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 Title

How Much Should a Civil Society Cost?

 Author

Kevin Avram

 Author Notes

Co-founder of the Canadian Taxpayers Federation in 1988-1989, Mr. Avram was instrumental in launching and developing the Prairie Centre from 1993-1997. He is currently working with Nebraska-based Americans in Motion, a pro-citizenship association that provides people with information on policy matters.

 Essay -

It was Oliver Wendell Holmes Jr., a popular justice of the US Supreme Court, who once stated that "taxes are the price we pay to live in a civil society." It is these twelve words, perhaps more than any others spoken by this brilliant man, that have become indelibly woven into modern American culture.

Almost every politician that raises taxes today, does so, quoting the words of Justice Holmes. An extension of the arms, palms turned upward, a shrug of the shoulders and those famous twelve words, have kept more than a few politicians from being skinned. What is ironic, is that the level of tax that Holmes and other Americans paid when this statement was first made has absolutely no relationship to the tax rates that Americans are burdened by today.

Holmes was born in 1841. He served in the Civil War, eventually becoming a colonel in the Union Army. He was appointed to the Massachusetts Supreme Court in 1899. His appointment to the US Supreme Court came in 1902. It was in 1904 that he made his famous statement about taxes being the price we pay to live in a civil society.

In a recent report on taxation in America, David Foster of the Washington-based Tax Foundation says, "since 1900, government has [in real terms] multiplied 29 times over the amount it needs per person to provide Justice Holmes civilized society." The calculations used to determine the actual comparisons take the combined total of all taxes, including income, social security, corporate, property, sales, etc. and come up with a per person figure. Each year's figures are then converted to 1998 dollars, which makes an actual comparison relatively simple.

Tax Freedom Day is the day when a citizen has earned enough money to pay all of his or her taxes. It assumes that all the money earned up until that time is turned over to the government. The year that Holmes was appointed to the US Supreme Court, Tax Freedom Day fell on January 31st. If each American today paid a total of $366 per year in taxes to all levels of government, that is proportionately the same amount of tax paid by Americans at that time. It stayed that way until about 1917. Annual federal taxes were an average of $119 per person (current dollars). State and local taxes combined were $247 (current dollars). Men like Holmes viewed this contribution as the price they had to pay to live in a civil society. And their society was civil. Some would even argue that it was more civil than things are today.

In stark contrast to the $366 (current dollars) tax bill paid by Americans when Holmes made his famous quote, the three levels of government now collect $9,939 per year for every man, woman, and child in the country. The federal government takes in $6,810 while state and local governments collect $3,129.

What it all means, is that Americans are now spending more on federal taxes alone than on any other budgetary item, including housing, health and medical care, food, transportation or recreation. This year Tax Freedom Day fell on May 10th. And, each year it is moving further down the calendar.

There is no doubt that in principle, taxes are the price that we have to pay to live in a civil society. And, when taxes were the equivalent of $366 (current dollars) per year, society was civil. So, let's ask ourselves, "now that we have government that in real terms costs 29 times more, do we have a society that is 29 times more civil? And, is it fair to apply the words of Justice Holmes, spoken in 1904, to our current levels of taxation?"

Few would argue that such is the case.


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