The Power To Tax Involves The Power To Destroy

In the 1819 Supreme Court case of McCulloch vs Maryland, Chief justtice John Marshall is famously quoted, comparing the power to tax with the power to destroy. This case was brought by a bank seeking to fight the government's ability to tax it.

"If the states may tax the bank, to what extent shall they tax it, and where shall they stop? An unlimited power to tax involves, necessarily, a power to destroy; because there is a limit beyond which no institution and no property can bear taxation."

He continues with "If the states may tax, they have no limit but their discretion; and the bank, therefore, must depend on the discretion of the state governments for its existence."

We have the same issue with the income tax today, but instead of businesses, we are talking about the government's ability to tax the income of individuals and families. Some of these people are already struggling to provide themselves with a decent quality of living because of inflation, sometimes called the invisible tax.

In 2016 came a presidential candidate in 2016, Bernie Sanders, who was interested in raising the income tax to pay for his new programs. While he never stated an exact percent that he would raise the tax to, he had no problem stating that it could go as high as 90% as it had in the past. Of course, when the tax was over 90% during World War II, most people weren't paying it, and the government didn't have the stronghold on everyone's personal finance like they do today.

The point here is that if we accept the government's ability to tax our incomes, there is no shortage of people willing to push the rate of that tax to levels that would make it nearly impossible for people to survive.

Publication in Time Magazine in 1958