Double Taxation
Why are the American people taxed twice to pay fully employed working Americans?
The American people own treasure. Some of this treasure is public lands, rugged beauty, and resources like minerals and crude oil. Some of it is our national capability to set beneficial worldwide conditions for US trade. With some of it, we defend US interests worldwide. For instance, a Columbia-class SSBN submarine represents about 15 billion dollars of the American people’s treasure.
Some of this treasure is money; to have the resources to buy submarines and maintain public lands and roads, we pay taxes out of our income from our work.
This treasure isn’t some mythical “government” treasure. It’s the American people’s money. The US government is the collective worker and executor for the American people, as “governments are instituted among Men, deriving their just powers from the consent of the governed” (Source, US Declaration of Independence). As the executor of assets, the government owns no assets.
We, the American people, give of our annual income because we are committed to maintaining our treasure. This commitment takes the form of taxation.
The collective worker of the American people (the government) gathers this money and awards federal funding through programs, grants, contracts, loans, etc., to organizations, from state and smaller governments to corporations or even individuals. The collective worker even waives rent payments for organizations working on federal property.
When the collective worker awards this money, some of the awardees, such as corporations, smaller governments, or individuals, employ other Americans to perform work.
Some of these organizations pay wages below the poverty level or without essential benefits, such as health insurance.
We, the American people, are then taxed a second time. When Americans who work for these organizations don’t earn enough money to heat their house and put food on the table, they qualify for social programs. The second taxation of the American people supports workers who qualify for these programs because their pay is too little.
A couple of questions arise from the above.
Why would we support American workers at all? Isn’t this their responsibility?
Section 8 of the US Constitution declared, “Congress shall have the power to…provide for the general welfare.” In other words, Congress has the power to guide American prosperity.
On the one hand, Congress guiding national prosperity does not mean we have a right to bread, wine, and houses. Americans work for those.
On the other hand, deliberately paying workers poverty-level wages from our treasure does not promote prosperity. American workers are already working and providing a service to their fellow Americans—what else are they supposed to do?
Another interesting component of this question is, can Americans demonstrate their rights of liberty when they exist on poverty-level wages?
California Law Review published Privacy, Poverty, and the Constitution by Albert Bendich in 1966. It’s 35 pages and thoroughly considers American rights, equality, poverty, and privacy. It’s a fascinating piece. Bendich’s decisive point is:
The ultimate conclusion, therefore, is that the war against poverty is not a war to rescue the poor so much as it is a war to defend the constitutional principles of freedom, dignity, and equality. It is not a matter of charity, but of justice.
Why are the American people taxed twice to pay fully employed working Americans?
Let’s review. Through our tax dollars, we contribute to the treasure of the American people. The government awards a contract or grant to X company. X company hires a worker and pays them poverty wages for their work. The worker applies for social program benefits to have food on the table and heat in the house. Because they receive poverty wages, they qualify for additional taxpayer dollars.
The American people paid that worker twice.
Why did we pay them twice? Because they weren’t paid a high enough rate of pay from their work.
Chief Justice Charles E. Hughes wrote the majority opinion for the US Supreme Court case West Coast Hotel Co. v. Parrish (1937). Hughes noted a similar problem in the challenge to a minimum wage, stating, “What these workers lose in wages, the taxpayers are called upon to pay. The bare cost of living must be met .... The community is not bound to provide what is in effect a subsidy for unconscionable employers.”
Restated and simplified:
We are against the double taxation of the American people to support working Americans. Therefore, we are for raising wages for working Americans.
President Biden signed Executive Order 14026, Increasing the Minimum Wage for Federal Contractors, on April 27, 2021. The order raised the minimum wage for federal contractors to $15.00/hr in 2022, with an annual increase every year depending on inflation, “for those workers working on or in connection with a Federal Government contract.”
Though the stated rationale for why President Biden signed the order might be different than this rationale, the order is a step in the right direction. However, it still doesn’t eliminate the double taxation problem. Now some American workers in a company can get a higher pay rate than others. The American people gave money to that company, and we are still potentially paying workers in that same company extra social program benefits due to low pay.
A company either needs to be on board with the American people, or the American people should leave that company behind.
In other words, if a company wants to enjoy the benefit of federal contracts, they need to commit to paying every individual in the company a wage above the poverty level.
And we need to codify this standard in law:
No agency shall award any federal dollars to any business entity (including any company, subsidiary, or company that operates on property supported by federal dollars or any entity that sells a product to the people of the United States) that pays workers wages below the poverty level plus 50%, assuming the worker and three dependents, for that locality.
The US government claims it is the largest customer in the world. Others disagree. A definitive statement would be that the government contracts a decisive share of goods and services in the United States.
Conservatives and liberals alike can build consensus around raising American workers’ wages. Higher wages for workers. Lower taxes. Reduced need for social programs. Preservation of the rights of liberty.
Another check. From previous articles, our objective and guidelines:
Objective: How do we make a strong, innovative American workforce that can drive world markets?
Guidelines:
Set conditions that enable Americans to provide for their own basic needs.
Consider what can be done for Americans who are self-motivated.
Focus on options that are not a significant burden on the American taxpayer.
This standard relieves the burden on the American taxpayer. We would no longer award a company with federal dollars and subsequently support their workers. We would boost the economy by putting money in the hands of workers who will spend it, and we would generate a higher tax income from the workers who make more wages.
From an American worker’s perspective, it helps Americans heat their house and put food on the table.
Why are the American people taxed twice to pay fully employed working Americans?
Thanks for considering my perspective.
May God bless the United States of America.
