How necessary is the income tax?

Ok, here’s the situation.

I’ve been arguing back and forth with a guy who claims there is no need for any kind of income tax. His claims are that the income tax accounts for only a small percentage of the government budget (in the US) and that the government could still function with most of its full services. With the exception, of course, of a few programs such as social security and medicare which apparently are an affront to all the founding fathers wanted.

I have no idea how much the US gov’t pulls in from other sources of revenue: property taxes, import tax, and the like. So what would happen without an income tax? Would society crumble? be much worse off?

I’ve heard this before myself, that other taxes make up the vast bulk of government revenues. The US didn’t even have an income tax until … when? 1916? It certainly had some sort of income before then. I will be interested to learn the Straight Dope on this.

Prior to 1916, the United States federal government budget was also significantly lower. REALLY significantly lower. Wars, and Rooseveltian democracy (though, to be fair, progressivism was already increasing the budget in the years around and just after the turn of the century) have substantially increased it. A permanent standing military of significant size (which we didn’t use to have prior to WWI), federal entitlement programs, and, of course, our friend the now extremely large federal debt, make for a substantially larger yearly outlay than 100 years ago.

Here is a link to a brief history of the income tax and other forms of taxation used in the past by the federal government.

Well according to this website it would appear that personal income tax accounted for 81.4% of the revenue in 2006. So it would seem you fellows have been hearing alot of bull-hooey.

I haven’t actually heard this one. I’ve been known to run my mouth off when inebriated about how the income taxes aren’t necessary because most functions of federal and state governments are not needed… at least by a drunk me. I seriously doubt that the government would make such a big deal out of extort^H^H^H^H^H^Htaxing individuals if it wasn’t a sizable chunk o’ change.

From the link above, the Federal government collected ~half a trillion in non-income tax revenue. That would be enough to the interest payments on the national debt, but only leave ~$100 billion or so for other programs. To say their would be major cutbacks in government services and programs would be to put it mildly.

I assume he is aware that Social Security and Medicare have their own taxes, separate from income tax…how entitlements actually get paid out is a whole other issue of course.

The economy would collapse overnite without the redistribution of money that currently occurs from the income tax. At a practical level it is essential. At a theoretical level there can be many sources of income besides income tax, either individual or corporate.

The vast majority of tax-payers get far more in benefits than they pay in income tax so until we manage to bankrupt ourselves, it’s not going anywhere. It’s a pretty good deal for the majority right now.

A lot of folks mix factiods from different areas, perhaps deliberately, perhaps inadvertantly.

As a percentage of total tax take by all levels of government in the US, the federal personal income tax is not a huge number. As a percentage of just the federal government’s tax take, it’s much larger.

Choosing a numerator from one category & a denominator from a larger or smaller category is a standard politcal / polemical trick.

Alrighty, this is what I was looking for:

The total income tax collected is approximately $2 Trillion.
The total IRS collections, including corporate and excise tax is 2.5 Trillion.

The total US presidential Budget for 2006 was 2.6 Trillion

So assuming that 81.4% of 2006 revenue comes from personal and corporate income, this means that… Yeah the income tax is pretty necessary.

The only problem I can see is that I’m using Taxpolicycenter.org as one source and Wikipedia as another. The two seperate sources might skew my answer.

I don’t think that matters. You’ve got it right, or so close to right that it doesn’t really matter.

Here’s a good pie chart for 2005. Looks like the number was actually 84% for that year if we include all the withholdings and not just what we think of as personal income tax (ie, what you file for every April). Keep in mind that lots of people pay more for FICA (Social Security) than they pay for income tax.

Thanks to all for the info. I knew the government had lower expenses before 1916, but I still thought maybe the assertion that the income tax was not that important might be true because of the increases in corporate income tax and tariffs over the years. Never was sure.

Pretty much every Western Industialized nation has an Income tax.

And depending on tariffs for so much income was really not such a good idea then and likely wouldn’t work at all now.

Can you provide some support for these claims? Why is massive redistribution of income necessary to keep the economy going? Why wasn’t it necessary until 100 years ago?

How do you know that most tax payers get more in benefits than they pay in income tax? One of the central problems to any planned economy is that without a free market for a particular good or service, it’s tough to figure out exactly what those things are worth, and thus whether people are or are not getting their money’s worth.

From what I understand taxation helps us control fluctuations in the economy and therefore it would seem that taxation in some way helpful to the country to keep us from being at the mercy of business cycles.

This is getting out of GQ territory, but 100 years ago we were not a major world power, we did not have a federally funded transportation system, we did not have federal regulations of food and drugs, we did not have federally funded research, we did not have much of a parks system, etc., etc. Some of the money goes to the federal government and back to the states - you might argue that this is unnecessary, but it is required if we want some uniformity in policy, such as No Child Left Behind. The biggest chunk though is national defense.
Here’s a breakdown. Of 2.5 trillion, about $600 billion is non-discretionary from HHS, and a bit more than that goes to Social Security. So, that’s half.
Defense gets $420 billion, and Homeland Security gets another $30 billion. So, almost half the budget goes to defense, where that was trivial 100 years ago. Going to be hard to fund that without an income tax.

Any time I think of a prosperous government I envision a spoiled 17 year old with daddy’s credit card. When I think of the less prosperous governments I see a pregnant 17 year old with a toddler under each arm waiting for her welfare check.

:dubious: