DEAN CALBREATH
'Spreading the wealth' is nothing new to U.S.
October 26, 2008
As the presidential election draws to a close, the campaign trail has come alive with allegations that Barack Obama is a “socialist” because he proposes to raise taxes on the wealthy while lowering them for the poor and middle class.
“Barack Obama calls it spreading the wealth,” Republican vice presidential hopeful Sarah Palin said last week. “But Joe the plumber and Ed the dairyman, I believe that they think that it sounds more like socialism. Friends, now is no time to experiment with socialism.”
But is it really socialism to talk of “spreading the wealth”?
Actually, it has been part of the American economic system since its founding.
In a letter to James Madison in 1785, for instance, Thomas Jefferson suggested that taxes could be used to reduce “the enormous inequality” between rich and poor. He wrote that one way of “silently lessening the inequality of property is to exempt all from taxation below a certain point, and to tax the higher portions of property in geometrical progression as they rise.”
Madison later spoke in favor of using laws to “reduce extreme wealth towards a state of mediocrity (meaning the middle) and raise extreme indigence towards a state of comfort.”
During the early days of the republic, the government relied mostly on tariffs to collect revenue, under the theory that since the rich bought most of the imports, they would pay most of the taxes.
“The rich alone use imported articles, and on these alone the whole taxes of the general government are levied,” Jefferson wrote in 1811. “The poor man, who uses nothing but what is made in his own farm or family, will pay nothing. (With) our revenues applied to canals, roads, schools, etc., the farmer will see his government supported, his children educated and the face of his country made a paradise by the contributions of the rich alone, without his being called on to spend a cent from his earnings.”
The theme of spreading the wealth has ebbed and flowed throughout American history, but it has constantly been present. When Abraham Lincoln introduced the first federal income tax in 1862, it was at a flat 3 percent rate for anyone making more than $600 a year, which was then a respectable salary. For instance, farmhands, who earned an average of $200, did not pay the tax.
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