How Was Government Funded before 1913 and IRS?

[susano]

Duties:

Customs duty is a kind of indirect tax which is realized on goods of international trade. In economic sense, it is also a kind of consumption tax. Duties levied by the government in relation to imported items is referred to as import duty. In the same vein, duties realized on export consignments is called export duty. Tariff which is actually a list of commodities along with the leviable rate (amount) of Customs duty is popularly understood as Customs duty.

Excises:

Unlike an ad valorem, an excise is not a function of the value of the product being taxed. Excise taxes are based on the quantity, not the value, of product purchased. For example, in the United States, the Federal government imposes an excise tax of 18.4 cents per U.S. gallon (4.86¢/L) of gasoline, while state governments levy an additional 8 to 28 cents per U.S. gallon.

Imposts are just another term for tariffs, either import or export.

Thanks. Because it's a forum, I prefer to ask and talk about it rather than just Google.

AF, IIRC, you support tariffs as means of revenue, especially with abolishing the income tax, right? I do and I know that doesn't fully square with some truly free market ideas. I wonder if there's a part of the argument that I missed. Meaning, without tariffs, aren't we were we are now, with globalization which is, obviously, death for anyone who doesn't want to race to the bottom.

 

[susano]

Your astonishment is based on fiction. Liquor taxes were 30 to 40% of Federal Revenue.

I noticed that there was a discrepancy in the answers on this. I thought it may be due to exactly which years are being talked about. I find hard to believe that that much booze was consumed, lol.

 

[susano]

Awesome.

+rep

And that makes me a perfect neighbor.

But I've never perceived you as a curmudgeon. Quite the opposite, in fact.

 

[susano]

It's those same city folk that will stand by that are full of "big ideas" and smarmy, glad handing, shit eating grin, platitudes.

Agreed. As you said, all up in your shit and so willing to tell you how to live your life. That may be due to physical proximity and the need to be sane while living too close. No doubt, Jefferson understood it because of his comments about cities.

 

[Becker]

I can't change it when too many people think like you.

Understood, sounds familiar.

Exactly my point: who the fuck are you to tell me to GTFO?

I just want to be left alone.

You just answered your own question above, because I am in the majority and its always easier to move the small number.

You just want to be left alone, that's nice, luckily just in case you don't, we have safeguards against it too.

YOU are the one supporting a system that feels the need to all up in my shit 24/7.

Not quite, I'm just OK with it enough that I won't fight for your rights unless it benefits me. (first they came for these guys, and I didn't speak up, then they came for me, sorry, I got better things to worry about sometimes)

Which is why I don't necessarily agree with the "pure democracy" of the market.

Nor do I believe that just because an organization may be private, does not mean that it cannot be tyrannical.

Glad we agree there.

 

[Becker]

That world that you want exists, right now, in Singapore.

Ok. Good to know. A little more crowded and smaller than I wanted, but not bad. Luckily I am willing to give up chewing gum and already support death penalty.

I have a friend who just spent several months there. It's extremely modern, spic and span clean, and very controlled. Get out of line and the consequences are harsh.

How welcome are they to westerners becoming citizens or permanent residents?

It's very safe. It's a perfect Stepford world. She said it has a beautiful veneer. Kind of like the Truman Show. Sounds like you would love it. What are you waiting for?

I'm not exactly complaining about the country I live in. It can be better and can be worse.

 

[susano]

Becker, you sound very totalitarian and sociopathic in your preferences. Singapore was a British colony so it might be a good fit, lol.

I don't know what the requirements are to becoming a citizen or permanent residency, but you'll need a job with an industry that's big there - big oil, mining, big pharma, international finance. It is a corporate state, 100%. Good luck!

 

[Becker]

Becker, you sound very totalitarian and sociopathic in your preferences. Singapore was a British colony so it might be a good fit, lol.

I am not totalitarian, I am however practical, and I do not unconditionally support or oppose the government.

I don't know what the requirements are to becoming a citizen or permanent residency, but you'll need a job with an industry that's big there - big oil, mining, big pharma, international finance. It is a corporate state, 100%. Good luck!

now you know what's stopping me.

 

[moderate libertarian]

There was too much human exploitation in America back then, I personally won't be taking notes from that era for good governance examples.

 

[ClayTrainor]

I guess I've never really understood how the government was funded before the Fed and IRS was implemented. I haven't had much of a chance to research it. I don't want to make assumptions. Help me out here. Thanks.

Sure, man. It's pretty simple really. Today it's something along the lines of...

Back then it was more like...

 

[Zippyjuan]

Tarrifs are a form of protectionism. They are basically govenment subsidies for domestic industry-shielding them from competition from other countries.

Suppose you wanted to go back to using tarrifs instead of income taxes to pay for the government. In 2009 (Wiki doesn't have such figures for 2010 so that is why I chose this year), government got its revenues from the following:
http://en.wikipedia.org/wiki/2009_United_States_federal_budget

Estimated receipts for fiscal year 2009 are $2.7 trillion (+7.1%).
$1.21 trillion - Individual income tax
$949.4 billion - Social Security and other payroll taxes
$339.2 billion - Corporate income tax
$68.9 billion - Excise taxes
$29.1 billion - Customs duties
$26.3 billion - Estate and gift taxes
$47.9 billion - Other

Customs duties and Excise taxes (excise taxes are not necessarily just on imports but for this exercise I will include them). That means that $98 billion out of $2.7 trillion or 3.6% of total government revenue came from such taxes.

We also need a figure for total US imports- to know what our base being taxed is. Again going with Wiki, US imports in 2010 totaled $1.9 trillion. That includes things like energy (oil) and foods as well as other goods. http://en.wikipedia.org/wiki/Economy_of_the_United_States

So now let us see what rate we need to set our tarrifs to in order to pay our bills. So now we need a figure for spending. Since we are using 2009 revenues it would only be fair to use 2009 expenditures as well.

Total spending according to the US budget for 2009 was $3.1 trillion. (see earlier link). If we wanted to cover the entire thing via tarrifs (achieving a balanced budget) on everything we import, you would have to impose a duty of 190% which means that everything we import would cost nearly three times as much. That $90 a barrel of oil would suddenly be $260 a barrel. Everything imported. Domesticaly produced goods would rise in price too- those which rely on imported imputs or even just those in competition with imports could now raise their prices since they are not competiing against the imported ones. The level of tarrifs would increase by 3,163% from what they are today (about 32 times higher).

Well, what if we just replaced the income tax then. Should we incude Social Security taxes since they are a payroll tax as well? We can do it both ways. In this case, I will not assume a balanced budget and only consider the revenue generated in 2009 via those forms of taxation. Income taxes totaled $1.21 trillion Taxing every item imported to get rid of the income tax would only require a 63% duty. Adding in Social Security taxes and you would be replacing $2.16 trillion in revenues so that would require a 113% levy so prices of imports would more than double.

Other factors would be set in motion. First, US imports would greatly decline- meaning a large loss of revenue from this source. So in order to maintain the same levels of income for the government, these rates would have to be even higher. Second, in reponce, the countries we import from would impose their own tarrifs on things they buy from us- meaning job losses to those who export.

 

[CCTelander]

Sure, man. It's pretty simple really. Today it's something along the lines of...

Back then it was more like...

LOL!

Exactly. It's always been funded through theft.

 

[Anti Federalist]

Thanks. Because it's a forum, I prefer to ask and talk about it rather than just Google.

AF, IIRC, you support tariffs as means of revenue, especially with abolishing the income tax, right? I do and I know that doesn't fully square with some truly free market ideas. I wonder if there's a part of the argument that I missed. Meaning, without tariffs, aren't we were we are now, with globalization which is, obviously, death for anyone who doesn't want to race to the bottom.

Yes, I do, and yes, it does not square at all with "wide open free market" ideals.

I maintain that there is no business model that can compete with, what amounts to, a prison economy.

It's bad enough we have the largest prison population making critical electronics parts for the military industrial complex, it is economic and national suicide, or, as you rightly noted, a "race to the bottom" to do it on an international scale.

I also maintain that a nation that cannot do for itself as much as possible, just like a person who cannot, will not remain free and independent.

The proof of that is all around us as we get sucked further and further into the globalist "Borg hive".

Therefore I think tariffs play a crucial role in both funding a very limited central government and maintaining economic independence.

Thus the reason that they are the only specific taxes named in the Constitution.

 

[Anti Federalist]

All that is based on a false assumption:

That a $3.1 trillion dollar budget is needed, justified or wanted.

Tarrifs are a form of protectionism. They are basically govenment subsidies for domestic industry-shielding them from competition from other countries.

Suppose you wanted to go back to using tarrifs instead of income taxes to pay for the government. In 2009 (Wiki doesn't have such figures for 2010 so that is why I chose this year), government got its revenues from the following:
http://en.wikipedia.org/wiki/2009_United_States_federal_budget


Customs duties and Excise taxes (excise taxes are not necessarily just on imports but for this exercise I will include them). That means that $98 billion out of $2.7 trillion or 3.6% of total government revenue came from such taxes.

We also need a figure for total US imports- to know what our base being taxed is. Again going with Wiki, US imports in 2010 totaled $1.9 trillion. That includes things like energy (oil) and foods as well as other goods. http://en.wikipedia.org/wiki/Economy_of_the_United_States

So now let us see what rate we need to set our tarrifs to in order to pay our bills. So now we need a figure for spending. Since we are using 2009 revenues it would only be fair to use 2009 expenditures as well.

Total spending according to the US budget for 2009 was $3.1 trillion. (see earlier link). If we wanted to cover the entire thing via tarrifs (achieving a balanced budget) on everything we import, you would have to impose a duty of 190% which means that everything we import would cost nearly three times as much. That $90 a barrel of oil would suddenly be $260 a barrel. Everything imported. Domesticaly produced goods would rise in price too- those which rely on imported imputs or even just those in competition with imports could now raise their prices since they are not competiing against the imported ones. The level of tarrifs would increase by 3,163% from what they are today (about 32 times higher).

Well, what if we just replaced the income tax then. Should we incude Social Security taxes since they are a payroll tax as well? We can do it both ways. In this case, I will not assume a balanced budget and only consider the revenue generated in 2009 via those forms of taxation. Income taxes totaled $1.21 trillion Taxing every item imported to get rid of the income tax would only require a 63% duty. Adding in Social Security taxes and you would be replacing $2.16 trillion in revenues so that would require a 113% levy so prices of imports would more than double.

Other factors would be set in motion. First, US imports would greatly decline- meaning a large loss of revenue from this source. So in order to maintain the same levels of income for the government, these rates would have to be even higher. Second, in reponce, the countries we import from would impose their own tarrifs on things they buy from us- meaning job losses to those who export.

 

[Zippyjuan]

What budget level would you suggest we start at? We have to begin with some assumptions. We could assume zero goverment spending and say we need zero taxes but that is not going to happen."What would things look like now if we did ... under current conditions" is a good place to start. Obvously a smaller budget does mean you can get by with lower tax rates.

Cut the budget in half and you could fund it with "only" a 100% tarrif on all imports. That would only be sixteen times the current average rate. And that still assumes that imports don't tank requiring a higher rate.

 

[Anti Federalist]

Tell you what, let's roll it back fifteen years, which is less than half the 2012 budget, and start with a base line of $1.6 trillion.

That would be reduced enough to be paid for by corporate taxes, excises and tariffs.

You could easily eliminate the $890 billion collected from personal income taxation.

What budget level would you suggest we start at? We have to begin with some assumptions. We could assume zero goverment spending and say we need zero taxes but that is not going to happen."What would things look like now if we did ... under current conditions" is a good place to start. Obvously a smaller budget does mean you can get by with lower tax rates.

Cut the budget in half and you could fund it with "only" a 100% tarrif on all imports. And that still assumes that imports don't tank requiring a higher rate.

 

[GeorgiaAvenger]

Your astonishment is based on fiction. Liquor taxes were 30 to 40% of Federal Revenue.

I better contact Ken

 

[Zippyjuan]

Tell you what, let's roll it back fifteen years, which is less than half the 2012 budget, and start with a base line of $1.6 trillion.

That would be reduced enough to be paid for by corporate taxes, excises and tariffs.

You could easily eliminate the $890 billion collected from personal income taxation.

Nice in theory. Tough in reality. "Mandatory spending" alone is currently $2.2 trillion. Zero everything else out (including defense spending) and take another $600 billion out of this.
http://en.wikipedia.org/wiki/2010_United_States_federal_budget

Mandatory spending: $2.173 trillion (+14.9%)

$695 billion (+4.9%) – Social Security
$571 billion (+58.6%) – Unemployment/Welfare/Other mandatory spending
$453 billion (+6.6%) – Medicare
$290 billion (+12.0%) – Medicaid
$164 billion (+18.0%) – Interest on National Debt

But if you could, then yes, you could come pretty close to balancing and get rid of the income tax.
That would give you about $1.5 trillion in revenue. (actually personal income tax collections are $1.2 trillion though, not $890 billion). There would of course still be the Social Security taxes too.

Estimated receipts for fiscal year 2009 are $2.7 trillion (+7.1%).
$1.21 trillion - Individual income tax
$949.4 billion - Social Security and other payroll taxes
$339.2 billion - Corporate income tax
$68.9 billion - Excise taxes
$29.1 billion - Customs duties
$26.3 billion - Estate and gift taxes
$47.9 billion - Other

 

[Lisle16]

I guess I've never really understood how the government was funded before the Fed and IRS was implemented. I haven't had much of a chance to research it. I don't want to make assumptions. Help me out here. Thanks.

Tariffs were the main way. Of course, a tariff can't be too big or it discourages imports, but that's part of the point-it kept government more or less within its Constitutional limits.

 

[Becker]

Yes, I do, and yes, it does not square at all with "wide open free market" ideals.

I maintain that there is no business model that can compete with, what amounts to, a prison economy.

It's bad enough we have the largest prison population making critical electronics parts for the military industrial complex, it is economic and national suicide, or, as you rightly noted, a "race to the bottom" to do it on an international scale.

I also maintain that a nation that cannot do for itself as much as possible, just like a person who cannot, will not remain free and independent.

The proof of that is all around us as we get sucked further and further into the globalist "Borg hive".

Therefore I think tariffs play a crucial role in both funding a very limited central government and maintaining economic independence.

Thus the reason that they are the only specific taxes named in the Constitution.

good to know I'm not alone on this.