Taxation presupposes the lawful authority of public officials to exact payment and to punish those who fail to pay. So great a power is this, that its abuse has long been regarded as tyranny. Our nation’s founders safeguarded against this kind of tyranny by requiring all federal taxation to be subject to the consent of the governed. The founders recognized that the power to tax is inherent in no one, but must be given by the people. The exclusive delegation of federal taxing authority by the people of the United States is expressed in the U.S. Constitution.
Yet, this grant of power is limited. Even the authority of the people to consent to taxation is limited. The Constitution is a civil covenant pursuant to the authority of the people to make covenants according to the biblical pattern. This authority comes from God, thus, cannot lawfully be used to erect a false sovereign such as a civil tyrant. In other words, the constitutional delegation of federal taxing authority cannot exceed the authority of the people to covenant according to the biblical law framework.
This biblical and constitutional perspective is the rightful legacy of the people of the United States. However, it has been somewhat obscured in the pages of history, which have, on occasion, been rewritten to cover-up the truth. The purpose of this paper is to reclaim, update, and restore this legacy in the area of federal taxation, to secure the blessings of liberty which our forefathers bestowed upon us and our posterity. That is, this analysis is an attempt to discover whether there are any principles of taxation which remain constant in spite of the ever changing tax policies and rules emanating from our nation’s capital.
Before engaging in this formidable task, let me offer a few caveats. Although it is hoped this paper pulls together many ideas in a new way, no claim is made that the ideas themselves are new or original. Rather, it is my own discovery of what the rules of taxation, both biblically and constitutionally, are objectively. These rules were discovered long ago, but some people today have simply discarded them. Thus, whether I have succeeded in my purpose is not so much a question of whether my conclusions are fashionable, but whether the analysis is legally accurate.
Nor is this paper a presentation of what the laws of taxation ought to be according to some biblical or constitutional utopian ideal. I have no desire to foist my own view of perfection on society. By definition, every utopian ideal is an artificial construct not in keeping with reality. What I seek is the true reality of taxation, not a false realism. Thus, should we discover that modern tax policies have strayed from the foundational principles, we might well ask which is real, and whether present policies are artificial.
Finally, let me disclaim that this paper is intended to be dogmatic or extremist, even though some of my conclusions will vary considerably from conventional wisdom. This is merely my best effort so far to discover what the enduring principles of taxation in America are. Others who hold opinions contrary to my own are not less spiritual or less professional. While I am convinced of its basic soundness, this analysis is submitted in the spirit of free inquiry to all those who would join my pursuit. Perhaps by reading this paper, you may make some of the same discoveries I have. In any event, as you read this, prove all things, and hold fast to that which is good.
The preservation of a free government requires . . . that the metes and bounds . . . of power . . . [not] be suffered to overleap the great Barrier which defends the rights of the people. The Rulers who are guilty of such an encroachment, exceed the commission from which they derive their authority, and are Tyrants. The people who submit to it are governed by laws made neither by themselves, nor by an authority derived from them, and are slaves. – James Madison, 1785.1
But natural rights, so called, are as much subject to taxation as rights of lesser importance. – U.S. Supreme Court, 1937.2
America’s federal system of taxation presupposes a non-evolutionary world view based largely on biblical principles. However, this perspective has been lost, even perverted. Today, public officials have largely exchanged a world view based on creation for an evolutionary perspective. Whereas the world view of creation focuses on law and authority, the evolutionary view centers on power and politics. Consequently, nearly every aspect of modern federal tax policy has deviated from its original design. Federal taxation has become merely expedient, rather than constitutional. However, this does not mean the true legacy of federal taxation in the United States cannot be reclaimed.
The world view of creation embraces matters of taxation as well as it does matters of theology, and with an equally unique perspective. It comprehends the entire structure of federal taxation, and every particular of it. The source of this perspective is the truth of the Bible, God’s written revelation to man. There is no aspect of law, government, or tax policy which biblical principles do not control. The result is a biblical law framework consistent not only with the realities of modern civil government, but with American history as well.
An historically accurate and legally correct understanding of the Constitution centers around such a world view. First, the Constitution has been framed in a legal context derived primarily from biblical principles, historically referred to as the law of nature. The authority of the people to constitute a new nation was based upon the model of the biblical covenants between God and men. Second, a study of the Bible itself compels an examination of our nation’s civil covenant, the U.S. Constitution. Viewed as a covenant, the Constitution is not merely a point of political departure, but a fixed standard of law which is permanent (allowing for limited modifications pursuant to its terms). The meaning of the text of the Constitution does not vary with time, because it is modeled after the covenants of God, which cannot change.
The biblical and constitutional perspective can be applied to any question of federal taxing policy. Included here are a number of general applications of principle to illustrate the distinctiveness and comprehensiveness of this world view. These general applications will establish a framework within which detailed applications may be made in the future.
The overall approach of this paper is to inquire into the jurisdictional limits of federal taxing authority. The goal is to determine, by examining certain biblical and constitutional principles, what powers have been given to public officials, and what rights and powers have been retained by the people which cannot be taxed. After all, if nothing exists which cannot be taxed, then civil power is unlimited, and the concept of enforceable rights retained by the people is meaningless. The main thesis is that federal taxing authority in the United States is neither more nor less, but coextensive with, the purposes of general federal jurisdiction. The secondary thesis is that the non-evolutionary perspective of federal taxing authority is the only sure safeguard against the tyranny of unlawful taxation.
1. James Madison, Memorial and Remonstrance Against Religious Assessments, 1785, quoted in Saul K. Padover, ed., The Complete Madison. (New York: Harper & Brothers Publishers, 1953), 299 at 300.
2. Charles C. Steward Machine Co. v. Davis, 301 U.S. 573 (1937), at 580, 581.