# News & Current Events > Economy & Markets >  Thomas Jefferson Repealed All Internal Taxes

## Truth-Bringer

Thomas Jefferson repealed all internal taxes and ran the government solely from trade tariff revenue.

"1800 - With the assistance of his Secretary of the Treasury, Albert Gallatin, newly elected Republican President Thomas Jefferson sought to reorient the fiscal policy of the United States. Jeffersons four main goals included: (1) a reduction in government expenditures, (2) a balanced budget; (3) a decrease in the size of the national debt, and (4) alleviation of the tax burden. The latter two objectives seemed to conflict with one another; specifically, Jefferson's desire to abrogate Hamilton's funded debt plan and retire all government obligations as judiciously as possible required a steady stream of revenue.

Nevertheless, Jefferson abolished all internal taxes, including the whiskey excise tax and the land tax. Meanwhile, the Napoleonic Wars in Europe, though a diplomatic minefield for American statesmen, proved a significant stimulus to the economy of the United States. Vigorous commerce enriched merchants while customs duties swelled the federal Treasury. By 1808 the national debt had been reduced from $80 million to $57 million, even though the Louisiana purchase had added an $11 million liability. By 1806, duties proved so lucrative that Gallatin and Jefferson fretted about what to do with the surplus above that required for debt retirement. Treasury reserves increased from $3 million to $14 million between 1801 and 1808."

http://www.tax.org/Museum/1777-1815.htm

"Jefferson got repealed all the direct federal taxes passed by the Federalists and boasted that ordinary Americans would never see a federal tax collector in their whole lives."

http://www.friesian.com/presiden.htm

"In his term, Jefferson wanted to limit the national government's power. He also wanted to cut the federal budget and lower taxes. Jefferson promised to pay off the national debt, which at that time was $83 million. He encouraged agriculture and trade. To help cut spending, he appointed Albert Gallatin as secretary of treasury. Gallatin worked in the House of Representatives and was a brilliant financer. He greatly cut military and naval spending. Gallatin also cut the staff of the executive branch. Together, he and Jefferson cut the national debt to $43 million. This allowed Jefferson to repeal exise taxes on whiskey and other products and ended all internal taxes."

Link

"When Thomas Jefferson was elected President in 1802, direct taxes were abolished and for the next 10 years there were no internal revenue taxes other than excises."

http://www.ustreas.gov/education/fac...es/ustax.shtml

(Note: the government's site is inaccurate on details. Jefferson was elected in 1800 and the excise taxes were repealed also.)

And after Jefferson's repeals, the Federal Government continued to operate without any permanent internal taxes until 1860:

"Madisons Notes on the Constitutional Convention [see Federalist Paper #45] reveal clearly that the framers of the Constitution believed for some time [and wrote this requirement into the Constitution] *that the principal, if not sole, support of the new Federal Government would be derived from customs duties and taxes connected with shipping and importations. Internal taxation would not be resorted to except infrequently, and for special [emergency] reasons.* The first resort to internal taxation, the enactment of internal revenue laws in 1791 and in the following 10 years, was occasioned by the exigencies of the public credit. These first laws were repealed in 1802. Internal revenue laws were reenacted for the period 1813-17, when the effects of the war of 1812 caused Congress to resort to internal taxation. *From 1818 to 1861, however, the United States had no internal revenue laws and the Federal Government was supported by the revenue from import duties and the proceeds from the sale of public lands.* In 1862 Congress once more levied internal revenue taxes. This time the establishment of an internal revenue system, not exclusively dependent upon the supplies of foreign commerce, was permanent."

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## Fox McCloud

If this is true, and factual....then no wonder Americans were so rich and prosperous--no Federal taxes+gold backed currency.

That only leaves State taxes....which, in most cases are not as nasty as Federal taxes.

I could definitely live with that...it's a shame that the government has broken down so much though, and now we're taxed to death (via direct taxes, indirect taxes, and hidden taxes---like inflation).

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## Truth-Bringer

> If this is true, and factual....then no wonder Americans were so rich and prosperous--no Federal taxes+gold backed currency.


Indeed.   Americans were the richest people in the world precisely because of those two policies.  Now, it's hard to find economic statistics from that time period, but it's clear that the rest of the world was very poor in comparison.  I always have this statement challenged by collectivists and statists on other forums, and I'll repost my standard rebuttal with commentary:

Here are a few links that show the poverty in the rest of the world:

"The Tzar did not share real power with these groups, and the poor classes were the most destitute and impoverished in Europe. *In fact, up until the 1850's, the vast majority of Russia's millions of citizens were peasants -- and the majority of these peasants were still serfs!*  Russia was still based on repressive and grueling serf-based agriculture, while other countries in Europe were undergoing the industrial revolution!  Poverty, illiteracy, suffering, and cruelty were the defining characteristics of Russian social and political life. With no protections under law, there was no way to voice discontent or work for change."

http://www.hcc.hawaii.edu/distance/hist/reform.htm

*(Note the excuses at the end - Americans didn't have any legal protections for revolting against the British - but they did so to secure their freedoms.  If you want more rights, you have to be willing to fight for them.  The Russians apparently weren't...)*

While the following site on the mining industry doesn't mention taxes (rather conveniently - since it seems liberal) the population figures it shows are revealing.  All these people are choosing to immigrate to the United States instead of elsewhere which proves that "word on the street" was that Americans were doing well and if you wanted a chance at prosperity, you should move to America:

"In 1850, there were about  two hundred Chinese people in America. When the Gold Rush occurred, the white workers in the West left their jobs to mine gold, drawing many  Chinese to America. Their main goal of coming was to make enough money here to have a more comfortable life when they went back to China. By 1880, there were over 100,000 Chinese here."

*(^ proving they made their money - which was tax free and which was more than they could make in China - and went back with an improved standard of living thanks to our economy.)*

The other population shifts occur, the link says, due to high food prices in Europe and various famines.  But it fails to explain why they were suffering from agricultural problems.  We'll see an example of why below by looking at Hungary. 

http://library.thinkquest.org/J003298F/immigration.htm

Here's an interesting bit of history - and this really was the predominant experience for most other people in the world:

"In the early to mid-eighteenth century, Hungary had a primitive agricultural economy that employed 90 percent of the population. *The nobles failed to use fertilizers, roads were poor and rivers blocked, and crude storage methods caused huge losses of grain.* _(the rulers - i.e. government were mismanaging things and had stifled the economy so that there was no incentive for anyone to perform these jobs...imagine that...)_

*Barter had replaced money transactions,* 

_(The economy broke down due to mismanagement...)_

and little trade existed between towns and the serfs. After 1760 a labor surplus developed. The serf population grew, pressure on the land increased, and the serfs' standard of living declined. Landowners began making greater demands on new tenants and began violating existing agreements. In response, Maria Theresa issued her Urbarium of 1767 to protect the serfs by restoring their freedom of movement and limiting the corvee. Despite her efforts 

_(government action failed to resolve what government action created in the first place...imagine that...)_

 and several periods of strong demand for grain, the situation worsened. Between 1767 and 1848, many serfs left their holdings. Most became landless farm workers because a lack of industrial development meant few opportunities for work in the towns._ (With the nobles and royals managing the economy, there was no free industry - the market was stifled)_

Joseph II (1780-90), a dynamic leader strongly influenced by the Enlightenment, shook Hungary from its malaise when he inherited the throne from his mother, Maria Theresa. Joseph sought to centralize control of the empire and to rule it by decree as an enlightened despot. He refused to take the Hungarian coronation oath to avoid being constrained by Hungary's constitution.

_(Uh oh...I'm already nervous...sounds a little Bush-like...)_

 In 1781 Joseph issued the Patent of Toleration, which granted Protestants and Orthodox Christians full civil rights and Jews freedom of worship.

_(hmmmm... so there wasn't much personal freedom either...well imagine that...)_

 He decreed that German replace Latin as the empire's official language and granted the peasants the freedom to leave their holdings, to marry, and to place their children in trades.

_(peasants - the common people had no property rights, no marriage rights, and no right to educate their children due to previous government action...it's a shame we can't get the tax rates on them...I'm sure it's high)_

 The "Kingdom of Hungary", "Kingdom of Croatia", and the "Grand Principality of Transylvania" became a single imperial territory under one administration, called "Lands of the Crown of St. Stephen". When the Hungarian nobles again refused to waive their exemption from taxation,

_(so the other lesser rulers were exempt from taxation due to previous government action...talk about some hypocrites...they want to run everybody else's life but be exempt from their own rules)_

 Joseph banned imports of Hungarian manufactured goods into Austria and began a survey to prepare for imposition of a general land tax.

_(and of course the guy loses to his own megalomania and blocks free trade and raises taxes...somehow I knew we wouldn't have a happy ending on this one...LOL)_

http://en.wikipedia.org/wiki/Hungary...d_19th_century





> That only leaves State taxes....which, in most cases are not as nasty as Federal taxes.


No, the states at that time also had a relatively low tax burden.





> I could definitely live with that...it's a shame that the government has broken down so much though, and now we're taxed to death (via direct taxes, indirect taxes, and hidden taxes---like inflation).


Yes, but there can always be change, and we should keep doing all we can do to make sure that change takes place.  But in the meantime, move your money offshore and out of the dollar.  Don't just sit back and suffer due to the stupidity and corruption of this government.  All of my retirement accounts are in Switzerland and denominated in Swiss francs.  I don't want to see this country go down the tubes, but I'll be damned if I go down with it.  Actually, the country isn't going down the tubes - it's being dragged down by this insane government.

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## HOLLYWOOD

Which leads me to...


When WESLEY SNIPES going to endorse Ron Paul?  lol

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## Truth-Bringer

> By 1808 the national debt had been reduced from $80 million to $57 million, even though the Louisiana purchase had added an $11 million liability. By 1806, duties proved so lucrative that Gallatin and Jefferson fretted about what to do with the surplus above that required for debt retirement. Treasury reserves increased from $3 million to $14 million between 1801 and 1808."


And the HUGE story behind the story on this one is that revenues to the Treasury increased, and Jefferson actually reduced the national debt.

And yet all the lying statists in the media claim it's impossible to reduce taxes and reduce the debt...

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## torchbearer

> And the HUGE story behind the story on this one is that revenues to the Treasury increased, and Jefferson actually reduced the national debt.
> 
> And yet all the lying statists in the media claim it's impossible to reduce taxes and reduce the debt...


yup, all you have to do is follow the constituion and reduce government to only the functions its suppose to be doing and we'll be debt free sometime before I die.

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## Truth-Bringer

> yup, all you have to do is follow the constituion and reduce government to only the functions its suppose to be doing and we'll be debt free sometime before I die.


Actually, we could be debt free rather quickly from selling the trillions of dollars worth of federal assets and abolishing the Federal Reserve.

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## Truth-Bringer

> Actually, we could be debt free rather quickly from selling the trillions of dollars worth of federal assets and abolishing the Federal Reserve.


The Libertarian Party has always had a plan for such:

http://www.harrybrowne.org/hb2000/stands/natldebt.htm

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## Chibioz

If we lived under such a government in this modern age could you imagine the prosperity Americans would experience?

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## danberkeley

> If we lived under such a government in this modern 
> age could you imagine the prosperity Americans would experience?


What are you talking about? Wouldn't you rather have the government tell what 
to do, how to do it, and when to do it? At least the Obama and Clinton supporters 
do and preach it rigorously. Gosh, you and the freedom-loving peoples are selfless. 
Is it so hard to accept a tax that not even God imposes on you? (sarcasm)

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## Truth-Bringer

> If we lived under such a government in this modern age could you imagine the prosperity Americans would experience?


That's why the statists don't dare allow the income tax to be repealed.  It would be the end of their ideology.

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## Truth-Bringer

> Which leads me to...
> 
> 
> When WESLEY SNIPES going to endorse Ron Paul?  lol


I'd love to see Ron Paul doing appearances for him as well as Vince Vaughn.

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## tmosley

I think that all functions of government ought to be outsourced to private companies with profit seeking motives in such a way that there is competition in all of the former government sectors.

For example, with border crossings, charge non-citizens some nominal fee to enter the country (none to leave), and charge citizens a similar nominal fee to leave, but none to come back (or something like that).  Companies might be leased different portions of the border, and they would compete based on who could offer the lowest price for crossings while maintaining security.  Military protection could be outsourced to a merchant marine company that provides protection from pirates for fee, perhaps in combination with port fees.  Mises.org had a great primer on how police protection could be provided without government intervention.  Etc. Etc.

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## Austrian Econ Disciple

> I think that all functions of government ought to be outsourced to private companies with profit seeking motives in such a way that there is competition in all of the former government sectors.
> 
> For example, with border crossings, charge non-citizens some nominal fee to enter the country (none to leave), and charge citizens a similar nominal fee to leave, but none to come back (or something like that).  Companies might be leased different portions of the border, and they would compete based on who could offer the lowest price for crossings while maintaining security.  Military protection could be outsourced to a merchant marine company that provides protection from pirates for fee, perhaps in combination with port fees.  Mises.org had a great primer on how police protection could be provided without government intervention.  Etc. Etc.


Judicial Civil Courts should be the realm of a "Government". I also think a well regulated militia, IE private citizens for the common defense under the direct of the States (Governors), should become the realm of our defences once more like it was in the time of the War of Northern Aggression. The two area's that prevent me from being 100% An-Cap, is common defense and judicial civil courts. Other than that I fully 100% agree, and Thomas Jefferson was the de-facto greatest American in the history of our country by far. 

Part of me just wants to see the Army of the Potomac once more  I kid I kid, but seriously, we do not need a standing army. It is a drain of resources, men, and material.

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## Truth-Bringer

> Judicial Civil Courts should be the realm of a "Government". I also think a well regulated militia, IE private citizens for the common defense under the direct of the States (Governors), should become the realm of our defences once more like it was in the time of the War of Northern Aggression. The two area's that prevent me from being 100% An-Cap, is common defense and judicial civil courts. Other than that I fully 100% agree, and Thomas Jefferson was the de-facto greatest American in the history of our country by far. 
> 
> Part of me just wants to see the Army of the Potomac once more  I kid I kid, but seriously, we do not need a standing army. It is a drain of resources, men, and material.


I agree.  The principle Founders were definitely against wars of aggression and standing armies.  For example, Madison didn't want the War of 1812.  He was doing his utmost to negotiate a peace treaty.  He was pressured into war by the "War Hawks" in his own party.

"Known at the time as ‘Madison's war’ after the US president who prosecuted it so badly. This war was a failed attempt by the young USA to seize Canada while Britain was engaged fighting Napoleon in Europe. *It might better have been called ‘the Republicans' war’, for it was this party, and in particular the ‘war hawks’ who dominated the House of Representatives thanks to the leadership of Henry Clay of Kentucky, that most wanted it."*

Link

I will admit that there does seem to be a change at times in Madison's *words* regarding support of a standing army.  After Jefferson was elected President in the House of Representatives, Madison said:   

"True to his Democratic-Republican party creed that a standing military is a threat to liberty, Madison writes to Jefferson, "And what a lesson to America & the world is given by the efficacy of the public will when there is no army to be turned [against] it!"

Of course, when we're looking at such a change, one must ask: * When did he say it?  Why did he say it?  And what were his actions after he said it?*

If Bill Clinton said "I truly believe in the institution of marriage and that one man can be faithful to one woman" - it would be meaningless because his actions would refute his words.  If he said it before getting married or after a divorce, the context would change the validity of the statement as well.

So when did Madison change and begin to allegedly favor a standing army?  It was during wartime, during the War of 1812, in which the capital was burned.  Obviously, quite an emotional experience for someone to live through, and emotion has a way of clouding reason:

(from the same source) *"the 63-year-old Madison remained on horseback for most of four days and nights while the capital burned and then returned immediately to its charred ruins to resume official business.* Within a month of the burning of the White House he sends his sixth State of the Union message to Congress candidly acknowledging England's potential "deadly blow at our growing prosperity,* perhaps at our national existence."*

His choice of words there is clearly emotional.  America could not have been conquered by England.

Another factor that most likely influenced his thinking on the issue was that the war was not popular, and some of the state governors exercised their independent rights and refused to allow their militia to serve in the war:

"Initially the war goes badly, and Madison, who has made some bad appointments, must bear some of the blame. Federalists heap criticism upon Madison's leadership and label the war "Mr. Madison's War." The merchants in New England trade with the enemy, and in reward the British blockade imposed in 1813 exempts New England. *New England's Federalist governors refuse to let their militia serve outside their own states.*"

Since Madison was seeing the results of the war first hand, and had to watch Washington DC being burned, such a refusal by governor's could obviously seem very threatening.

But what were Madison's *actions* after the war ended?  Did he relentlessly pursue a standing army?  No. * In fact, he reiterated his support of the militia in his state of the union speech in 1815.*  He did call for more military schools, which would also potentially be used for training of the militia as well, but he did not want the primary means of defense to be a standing army:

"As an improvement in our military establishment, it will deserve the consideration of Congress whether a corps of invalids might not be so organized and employed as at once to aid in the support of meritorious individuals excluded by age or infirmities from the existing establishment, and to procure to the public the benefit of their stationary services and of their exemplary discipline. *I recommend also an enlargement of the Military Academy already established, and the establishment of others in other sections of the Union;* and I can not press too much on the attention of Congress such *a classification and organization of the militia as will most effectually render it the safeguard of a free state. If experience has shewn in the recent splendid achievements of militia the value of this resource for the public defense, it has shewn also the importance of that skill in the use of arms and that familiarity with the essential rules of discipline which can not be expected from the regulations now in force.* With this subject is intimately connected the necessity of accommodating the laws in every respect to the great object of enabling the political authority of the Union to employ promptly and effectually the physical power of the Union *in the cases designated by the Constitution."*

Link

Madison would not have supported today's foreign policy.  You will note from his writings that he constantly states of "asking Congress," "asking Congress" and "asking Congress."  He knows the President has no authority to do such things at his own whim.  He would not have been in favor of a President able to deploy troops or other military operatives, such as the CIA, to foreign countries in the defense of abstract "American interests."

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## RileyE104

> Which leads me to...
> 
> 
> When WESLEY SNIPES going to endorse Ron Paul?  lol


I was wondering about that myself...

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## fj45lvr

> Indeed. Americans were the richest people in the world precisely because of those two policies. Now, it's hard to find economic statistics from that time period, but it's clear that the rest of the world was very poor in comparison.


 
these are not the ONLY reasons......


the european settlers had a whole continent of natural resources to exploit...that was some pretty heavy duty benefit to the Americans.

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## SimpleName

Now THAT sounds like the kind of America I want to live in. Jefferson had quite a mind. Still not so sure about that Louisiana Purchase and the contradictory slave/anti-slavery deal, but his mind was an absolute utopia of knowledge. I can't imagine what would happen if he saw what happened to his country.

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## lx43

Wouldn't it be wonderful if we didn't have to pay any of these taxes?

Federal Income tax
FICA
FUTA
Corporate Income Tax
Capital Gaines Tax
Estate Tax
State Income Tax
State Sales Tax
Property  Tax

I could name a ton more but you get the idea.

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## gimmeliberty

I wonder how nuclear weapons would affect Jeffersons views on government policies?  
On "national security"? secrecy? research and development?

....to what degree do secrets need to be kept? 

and at what costs?...

...perhaps, at the cost of suppressing 
civilization saving technologies? 
..so how long is, too long?

The national security blanket of, BLACK BUDGETS, and "Special Access Programs", are so out of control, that I believe it's beyond repair,  to ever hope for a return to a responsible and accountable governance. 

I mean what would Ron Paul do?  ...woops, I meant Jefferson,...


can  "HONESTY IS THE BEST POLICY" be applied here?


???

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## Zippyjuan

The really big ticket items are not the black programs but Social Security and Medicare/ Medicaid.  Add in the interest on the debt and you already have almost two thirds of government spending (according to the 2009 budget).  http://en.wikipedia.org/wiki/2009_Un...federal_budget

Customs duties and excise taxes currently account for only about three and a half percent of government revenues.

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## Truth-Bringer

> The really big ticket items are not the black programs but Social Security and Medicare/ Medicaid.


Paid for by FICA taxes, etc. - not the income tax.




> Add in the interest on the debt and you already have almost two thirds of government spending (according to the 2009 budget).  http://en.wikipedia.org/wiki/2009_Un...federal_budget
> 
> Customs duties and excise taxes currently account for only about three and a half percent of government revenues.


The national debt could be paid by selling off most federal assets, as former Libertarian Party presidential candidate Harry Browne demonstrated.

The revenues for excise taxes and tariffs would increase as overall economic activity increased from the other major tax repeals.

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## Truth-Bringer

> Now THAT sounds like the kind of America I want to live in. Jefferson had quite a mind. Still not so sure about that Louisiana Purchase and the contradictory slave/anti-slavery deal, but his mind was an absolute utopia of knowledge. I can't imagine what would happen if he saw what happened to his country.


Jefferson did end the overseas slave trade, but, yes, he still continued to own slaves.

I recently found some new information that helps to explain that contradiction, as well as defend him from charges of raping his female slaves (Sally Hemming):

"*Why Didn't Jefferson Free His Slaves?* 

A good question. Thomas Jefferson did not free his own slaves for several reasons, we can surmise. *First "freeing" slaves was not an easy task. The owner had to put up a bond to pay for any transgressions the slave commited on society while free. Also, slaves being considered property, they were subject to debt and property laws. If an owner of slaves was in massive debt, as was Thomas Jefferson to the tune of $100,000.00, freeing them was impossible. In fact once Jefferson died his creditors seized the slaves along with Monticello and sold them at auction.* Thomas Jefferson also knew that his own fellow Virginians were not ready nor willing to support emancipation. Jefferson's many attempts at emancipating slaves in the state failed. Also he knew that it would not be humane to free a people into a society that did not want them, and who had their habits nurtured in slavery. Jefferson was a progressive. Many of his fellow Virginians felt he was a dangerous radical on slavery. Being progressive he knew that time and patience would eventually destroy the institution. It is amazing how modern Americans want simple solutions to complex social problems, i.e: slavery in the 18th century. We must remember 18th century Americans had no example of a multi-racial society with blacks and whites living together in a state of equality. Thomas Jefferson was very radical and progressive for his time (and ours to a certain extent) and to judge him by 21st century morals and standards is ahistorical and unscientific. Many modern Americans forget that Jefferson lived in a time where equality even between different economic classes of white men was considered dangerously radical."

Link

Secondly...

"While Jefferson did not free all of his slaves on his death (as did Washington), a law passed in Virginia in 1806 required that the legislature pass a special bill that would attest to the exemplary behavior of each slave to be freed. If freed, the slave had to leave the state without his or her family. *Jefferson tried unsuccessfully to get this law changed. Further, Jefferson trained his slaves in skills that would be useful when they were free. He believed that to free them first would be irresponsible -- since they would be homeless and without family.*"

Link

From the same source:

Jefferson's anti-slavery efforts include:

--Introduction of a bill in 1769 the Virginia legislature to abolish the importation of slaves into that state.

--Inclusion of an anti-slavery provision in his original draft of the Declaration of Independence in 1776.

--Initiated the Congressional ban on slavery in all federal lands in 1784 (his effort to extend the act to the 13 states lost by only one vote).

--In 1808, as President, he signed into law a bill banning the slave trade with Africa.



"For two excellent articles that address the subject of the DNA tests, see:  "Research Report on the Jefferson-Hemings Controversy: A Critical Analysis" by Eyler Robert Coates, Sr.; and  "The Jefferson-Hemings DNA Study" as told by Herbert Barger, Jefferson Family Historian.

And, for two other excellent articles that address the unproven "facts" of the Jefferson-Hemings allegations, see "The Thomas Jefferson - Sally Hemings Myth and the Politicization of American History" by David N. Mayer; and "Thomas Jefferson and Sally Hemings: Case Closed?" by Lance Banning."

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## gimmeliberty

> The really big ticket items are not the black programs but Social Security and Medicare/ Medicaid.  Add in the interest on the debt and you already have almost two thirds of government spending (according to the 2009 budget). ...


....what about the other BIG ticket, military spending, defense manufacturing contracts, etc., 
aren't black budgets a part of it? not to mention the secrecy behind the black programs that entitle them to not even disclose the means and ways in which the money is spent?
and if so how can "we" even begin to understand and judge their importance to the "common defence" ?
my point is, what middle ground is there, between NATIONAL SECURITY and genuine responsible governance?

oh, and lets not forget what Rumsfeld said,.. "According to some estimates we cannot track $2.3 trillion" 

http://www.cbsnews.com/stories/2002/...in325985.shtml

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## Zippyjuan

The DOD would be the next largest item after those I listed. 
Black budget items are included in the regular Department of Defense budget.  It is just hidden exactly what the money is actually going for.  Obviously that makes it diffifiult to know exactly how much goes to such programs, but estimates put it at about $30 billion- out of a total US budget of $3 trillion this is not much and getting rid of that spending would have little impact on the deficit. Not saying that it should not be looked at- it is just not a significant target as far as trying to get rid of your debt and in turn taxes.  There are a lot of educational funding programs in the Department of Defense as well including federal student loans. I don't know how they got the $2.3 trillion figure, but that is some four years of the total defense budget. 




> Paid for by FICA taxes, etc. - not the income tax.


FICA is an income tax.  True it is not counted as part of the Income taxes but it is a tax based on your income. If you want to get rid of all internal taxes you would include FICA as well.  If you were to keep tarrifs and excise taxes where they are now and got rid of all internal taxes you have to get rid fo 97% of current government spending.  If you keep current spending then excise taxes need to be increased thirty two times what they currently are.  This would severely reduce your imports and thus mean you need to raise the taxes even more.   You need to get rid of the spending before you get rid of the taxes otherwise the debt continues to grow. 




> The national debt could be paid by selling off most federal assets, as former Libertarian Party presidential candidate Harry Browne demonstrated.


Try selling national parks and buildings. See how far you get. That is the major portion of government owned lands. Leasing resources (such as for mining or farming) brings in a continuous stream of funds.  Selling them brings in a one-time amount. 

http://www.allvoices.com/contributed-news/914109



> Government land is used comprised mainly of military bases, testing areas, nature and wildlife reserves, Indian reservations, or commercial leasing for mining or agriculture. Administrations that oversee these lands include the US Army Corps of Engineers, the US Department of Defense, the US Forest Service, the US Fish and Wildlife Service, the National Park Service, and the Bureau of Indian Affairs, among others. Altogether, government land makes up about 30% of the entire territory of the United States.

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## sratiug

A tariff based tax system supports free trade much more than an internal tax system.  Internal taxes destroy the free trade of Americans far more than a flat tariff.  We could actually replace internal taxes with tariffs over a period of 10 years.  People would vote for this.

The argument that tariffs would have to be increased too much is bogus, that just shows how much imports are subsidized currently and makes it obvious why our economy is being destroyed.  With a 10 year phaze in there would be time to cut government spending to acceptable levels and time for manufacturers to reopen factories here to benefit from real free trade.

Foreignors do not pay internal American taxes, and foreignors do not pay our tariffs.  Americans pay the tax either way, so the obvious choice is the one that supports free trade for Americans the best, and that is a flat tariff system.

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## Zippyjuan

A tarrif is a restriction on competing firms entering an industry and are thus a barrier to free markets and free trade. Subsidies are also market distortions.  China subsidising their producers by keeping their currency artificially valued is a distortion. Tarrifs raise the cost of imports and act as a subsidy to domestic producers- allowing them to sell their goods for higher prices than they could without the foreign competition. 

It is true that foreign manufacturers do not pay things like US income taxes and Social Security taxes but they do pay whatever labor taxes are assesed in their own countries. They also have to pay higher transportation costs to get their goods to other markets. It is also true that US consumers end up paying the taxes either way (unless the foreign producers absorb some of the costs via lower profits to keep their sales level going). 




> The argument that tariffs would have to be increased too much is bogus,


How much money do you need to raise?  That will determine how high your tarrifs will have to be.  If you have to raise the $3 trillion we currently spend, your tarrifs have to rise by a factor of 32.  But these tarrifs only apply to a portion of our imports.  In 2008, we imported some $2 trillion worth of goods.  If we taxed all of them the same then you could use a 150% import duty at current spending levels.  That would raise the price of oil for example from $70 a barrel to $105 a barrel.  OOps.  That is just the tax on a barrel of oil.  The price of a barrel would actually go to $175 ($70 cost plus the $105 tax).  Obviously if you are spending less you can have lower tarrifs.  Remember that if you start raising your tarrifs by a lot, the people you are raising the tarrifs on may respond in kind- making your exports to them much more expensive and lower in number as well meaning your own domestic producers will sell less abroad.

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## sratiug

> A tarrif is a restriction on competing firms entering an industry and are thus a barrier to free markets and free trade. Subsidies are also market distortions.  Tarrifs raise the cost of imports and act as a subsidy to domestic producers- allowing them to sell their goods for higher prices than they could without the foreign competition.


A flat tariff is not a subsidy of American producers.  Replacing internal taxes with a tariff removes the subsidy for imports that exists today.  Internal taxes prevent American production and are more of a barrier to free trade and competition than a flat tariff can ever be.




> It is true that foreign manufacturers do not pay things like US income taxes and Social Security taxes but they do pay whatever labor taxes are assesed in their own countries. They also have to pay higher transportation costs to get their goods to other markets. It is also true that US consumers end up paying the taxes either way (unless the foreign producers absorb some of the costs via lower profits to keep their sales level going).


What foreignors pay in taxes is not under our control.  Certainly most of the world has far lower taxes than Americans who pay for our global military empire and the rest of our crazy unconstitutional programs. 




> How much money do you need to raise?  That will determine how high your tarrifs will have to be.  If you have to raise the $3 trillion we currently spend, your tarrifs have to rise by a factor of 32.  Obviously if you are spending less you can have lower tarrifs.  Remember that if you start raising your tarrifs by a lot, the people you are raising the tarrifs on may respond in kind- making your exports to them much more expensive and lower in number as well meaning your own domestic producers will sell less abroad.


Internal taxation makes our production more expensive now and makes us sell less at home and abroad now, not after some hypothetical trade war.  Foreign tariffs are none of our business.

It is worse to raise prices of American products enough to pay our 3 trillion dollar budget as we do now than it would be to raise prices on imports to pay for the same budget.  That is an inescapable fact of logic.  Free trade must begin at home.   High internal taxes with low to nonexistant tariffs are subsidizing foreign production.

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## Truth-Bringer

> FICA is an income tax.  True it is not counted as part of the Income taxes but it is a tax based on your income. If you want to get rid of all internal taxes you would include FICA as well.


Yes, FICA should ultimately be repealed as well.  But the point is that Social Security is not paid for by the general income tax.

Since corrupt politicians have made many senior citizens dependent on Social Security, we would need to gradually phase it out in order not to hurt those who had blind faith in government and rely solely on Social Security as their means of survival.




> If you keep current spending


That's just the point - we will not keep current spending levels.





> Try selling national parks and buildings. See how far you get.


Try raising the national debt to $1 quadrillion and taxes by 90% at all levels - and see if the country still exists.

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## tmosley

Cut taxes first.  Then we can talk about raising tariffs.  I think you will find that without taxes or regulations, America will be quite prosperous again without the need for any destructive tariffs.

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