Death and taxes
“In this world nothing can be said to be certain, except death and taxes.”
-- Ben Franklin
Benjamin Franklin's declaration is likely the most famous tax quote ever.
The Philadelphia inventor, American statesman and prolific writer included the commonly used paraphrase in a 1789 letter. "Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes," wrote Franklin to Jean-Baptiste Leroy.
Scholars cite several other versions of this encapsulation of the inevitability of 2 of our most-feared situations. But Franklin's place in America's fight for freedom secured his quote in the country's consciousness.
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Taxes and civilized society
“Taxes are what we pay for a civilized society.”
-- Oliver Wendell Holmes Jr.
That phrase is inscribed above the entrance to the IRS headquarters in Washington, D.C.
It comes from Oliver Wendell Holmes Jr., who served as a U.S. Supreme Court justice from 1902 to 1932. Holmes immortalized a version of the comment in his dissent in the high court's 1927 ruling in Compania General De Tabacos De Filipinas v. Collector of Internal Revenue. The lawsuit sought to recover tax that a Spanish company operating in the Philippines alleged was illegally imposed.
Apparently, however, it was a long-held belief by Holmes. He reportedly used the phrase in a speech in 1904.
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Taxes and an organized society
“Taxes, after all, are dues that we pay for the privileges of membership in an organized society.”
-- Franklin D. Roosevelt
Franklin D. Roosevelt apparently was an Oliver Wendell Holmes Jr. fan, as he echoed the jurist's sentiment.
The only president to serve 3 terms also believed the wealthy should pay higher dues.
Roosevelt relied on taxes, particularly from rich taxpayers, to fund programs designed to pull the country out of the Great Depression. The various New Deal revenue acts in the mid-1930s substantially boosted the tax burden on the wealthy, raising the effective income tax rate on the top 1% from 6.8% in 1932 to 15.7% in 1937.
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Government's power to tax
“The power of taxing people and their property is essential to the very existence of government.”
-- James Madison
James Madison, the United States' 4th president, is not treated kindly in the Broadway musical "Hamilton." In the smash hit, Alexander Hamilton, the country's first Treasury Secretary, describes his political opponent as mad as a hatter.
Anti-tax folks might agree with that assessment, upon hearing Madison's defense of taxes.
Since the American Revolution was fought for representation when it comes to taxation, it's no surprise that the new country's post-war battles centered on fine-tuning that process. Madison's plan was used as the basis for our current Congressional system.
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The fair share of the rich
“What people really want is fairness. They want people paying their fair share of taxes.”
-- Barack Obama
This notion of "fair share" is a recurring theme throughout Barack Obama's presidency. In videotaped New Year 2013 remarks, President Barack Obama cited the fiscal cliff deal that increased the tax rates of top earners. He also said that future federal debt reduction efforts would require that "the wealthiest 2% of Americans … pay higher taxes for the first time in 2 decades."
The phrase quickly became a Democratic rallying cry. Versions of it are still being heard in the current presidential campaign.
The battle, both philosophically and practically, continues to be over what is a fair share. Recent data show that the wealthy are paying most of the U.S. taxes collected, but that they are still paying less than they did in the mid-1990s.
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Taxes vs. government spending
“The problem is not that the people are taxed too little. The problem is that government spends too much.”
-- Ronald Reagan
Ronald Reagan, president from 1981 to 1989, is considered by many Republicans as their party's patron saint.
He's also known for working with Democrats to enact the last major tax code overhaul, the Tax Reform Act of 1986. That bill lowered individual tax rates and eliminated many popular tax loopholes. But he did raise taxes when circumstances required the revenue.
Reagan may be most remembered for his statement about government overspending, but that observation didn't come during his presidency. His words appeared in a 1993 opinion piece in The New York Times.
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No new taxes
“Read my lips: No new taxes.”
-- George H.W. Bush
George H.W. Bush, in accepting the 1988 Republican presidential nomination, told the country, "Read my lips: No new taxes." In 2014, he received the John F. Kennedy Profile in Courage Award for breaking that pledge.
Bush changed his tax mind in 1990. Facing a growing federal deficit, he reached a budget deal with congressional Democrats that included tax increases. The decision is widely believed to have cost Bush a second term.
In honoring Bush, the JFK Library Foundation noted that the 41st president "risked his reputation and ultimately his political career by forging an important compromise ... that moved our country forward, and should not be forgotten."
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Tax and criminal connection
“The income tax created more criminals than any other single act of government.”
-- Barry Goldwater
Most Americans live in fear of an IRS audit. But Barry Goldwater, U.S. senator from Arizona and the Republican Party's 1964 presidential candidate, believed that the tax law actually produced tax scofflaws.
The U.S. lawmaker was a committed political conservative who wanted to replace the progressive income tax system with a flat tax. However, he never got the chance to push for that from the Oval Office, losing to Democrat Lyndon B. Johnson by the largest popular vote margin in U.S. history.
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Taxes and trouble
“Make sure you pay your taxes; otherwise you can get in a lot of trouble.”
-- Richard M. Nixon
Richard M. Nixon is famously known for declaring, "I am not a crook." That pronouncement came during a 1973 news conference during which Nixon defended himself against claims that he had illegally profited from his public service.
But the 37th president also had some good tax advice. He spoke from experience. Nixon's taxes filed between 1968 and 1972 were audited, primarily in connection with an unusually large charitable donation. The IRS eventually determined Nixon owed an extra $476,431; that's around $2.5 million in today's dollars.
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Taxes as legal robbery
“Collecting more taxes than is absolutely necessary is legalized robbery.”
-- Calvin Coolidge
Calvin Coolidge earned the nickname "Silent Cal" as Warren G. Harding's vice president. His reputation for succinctness continued when he became the 30th president in 1923 following Harding's death.
"The words of a President have an enormous weight, and ought not to be used indiscriminately," Coolidge wrote.
However, Coolidge backed up his view on taxation by signing into law several Revenue Acts during his administration that reduced income taxes across the board.
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Eyeing tax evasion
“I can't define tax evasion, but I know it when I see it.”
-- Fred T. Goldberg Jr.
Fred T. Goldberg Jr. is eminently equipped to adapt the famous Supreme Court "I know it when I see it" assessment of pornography to taxes. He served as IRS commissioner from 1989 to 1992.
During his years as IRS chief, Goldberg no doubt saw many situations he knew were tax evasion.
The IRS has been on the lookout for tax evasion since 1913 when the federal income tax was enacted. Some people knowingly evade paying taxes. Others are unsuspecting taxpayers lured into illegal tax evasion schemes.
To stay out of tax trouble, take Goldberg's words to heart and keep your eyes open.
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Taxation with representation
“In 1790, the nation which had fought a revolution against taxation without representation discovered that some of its citizens weren't much happier about taxation with representation.”
-- Lyndon B. Johnson
So how do Americans feel about taxation and representation 240 years after declaring independence? As many of the prior tax quotes show, there's still some ambivalence.
President Lyndon B. Johnson's remarks in his commencement address to the U.S. Coast Guard Academy in June 1964 still apply in large part today.
But at least today, the representation is much nearer and easier to change via voting.