During his second inaugural address, Jefferson said of Tariffs charged on foreign imports, “…revenue on the consumption of foreign articles is paid cheerfully by those who can afford to add foreign luxuries to domestic comforts. Being collected on our seaboards and frontiers only, and incorporated with the transactions of our mercantile citizens, it may be the pleasure and pride of an American to ask, what farmer, what mechanic, what laborer ever sees a tax gatherer of the United States?” It was a matter of pride to Jefferson that those who could not afford to pay taxes, did not have to pay taxes. Jefferson expanded on this thought in 1811, “These revenues will be levied entirely on the rich, the business of household manufacture being now so established that the farmer and laborer clothe themselves entirely. The rich alone use imported articles, and on these alone the whole taxes of the general government are levied.” So, Jefferson was not opposed to the Rich paying all of the taxes that kept the government running. He even comments on what should be done with a surplus of revenue, “Our revenues liberated from the public debt and its surplus applied to canals, roads, schools, etc., the farmer will see his children educated, and the face of his country made a paradise by contributions of the rich alone, without being called to spend a cent from his earnings.”
Many are now shouting, “Jefferson wanted to redistribute wealth!” However, Jefferson was clear that he did not want these taxes as a means of redistributing wealth, “We do not mean that our people shall be burdened with oppressive taxes to provide sinecures for the idle or the wicked under color of providing for a civil list.” He also stated that, “Every man is under the natural duty of contributing to the necessities of the society; and this is all the law should enforce on him,” and Jefferson believed, “Taxes on consumption, like those on capital or income, to be just, must be uniform.”
With that in mind, there are several things that are standard practice today that I don’t believe Jefferson would agree with. For example, I don’t believe he would agree with our current policy of giving enormous tax refunds to families who do not pay any taxes at all. I believe Jefferson would see that as a redistribution of wealth. Something he was opposed too. Giving people a hand up is different than giving someone making low wages a hand out.
Also, Jefferson would not approve of our complex tax code. Jefferson was all about simplifying and making things easy to understand. He wrote, “I think it an object of great importance…to simplify our system of finance, and bring it within the comprehension of every member of congress…we might hope to see the finances of the Union as clear and intelligible as a merchant’s books, so that every member of congress and every man of any mind in the Union, should be able to comprehend them, to investigate abuses, and consequently to control them.” I believe Jefferson would want to see the same principle applied to our tax code. However, not only is our tax code not simple or easy for anyone to understand, it is far from uniform or fair.
In addition to his disapproval of the tax code, Jefferson would greatly disapprove of our mounting federal deficit, which our Nation will never have paid off in twenty years time; which is what Jefferson considered the standard time for repayment if you wanted to pay something back in one generation. In the eighteen hundreds, Jefferson was adamant that one generation had no right to burden the generations that came after. He said, “We may consider each generation as a distinct nation, with a right, by the will of its majority, to bind themselves, but none to bind the succeeding generations, more than the inhabitants of another country…..The laws of nature impose no obligation on one generation to pay another’s debts.” To this end, Jefferson believed that you, “never borrow a dollar without laying a tax in the same instant for paying the interest annually, and the principal within a given term; and to consider that tax as pledged to the creditors on the public faith.” I guess, he wasn’t a big supporter of robbing Peter to pay Paul. It seems he actually believed that if you levied a tax to pay a certain debt, it should be used to pay that debt and only that debt, until the debt was paid and then, as stated above, the surplus would go for schools, roads, canals, etc.
So where does that leave us today? We have free trade, so there are no tariffs collected on imports to generate needed revenue. In fact, opening up free trade helped our manufactures ship our jobs overseas. Although Jefferson did say that tariffs would eventually be waived on some goods that became staples in society, he believed that tariffs would help support American manufactures because the poor and middle class could by goods made in America cheaper than items imported from other countries. Jefferson also believed that those who wanted to buy imports would be willing to pay higher prices; thus providing needed revenue to the Federal government. However, today thanks to free trade, and the loss of American manufacturing, everything is imported so what worked in the nineteenth century will not work for us today. The poor as well as the rich would be hit by tariffs.
Therefore, maybe it’s time to start looking at spending cuts, as well as ways to increase revenues; to look at paying our debts as we go and not passing the buck on to our children; to look at ways to simplify our tax code so that businesses and wealthier Americans are not using loop holes to pay less taxes than average working Americans. Remember, “Taxes must be uniform to be fair.” Maybe both sides need to sit down and really talk about what is best for America. When you look at Jefferson’s views of taxation, you find tenets from both the democratic and republican platforms. So, while we cannot solve our problems by going back to the policies of the eighteen hundreds, maybe if both parties take the time to look to our past, they can learn enough to forge a compromise for our future.
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