Benjamin “Bibi” Netanyahu (Credit: Wikipedia)

This is, however, the same man who—with every bit as much outward certainty–-declared that Saddam Hussein was “feverishly” developing nuclear weapons as he urged the United States on to an invasion that proved wholly unjustified. While Netanyahu’s assertions about Iran’s nuclear program are grave, it could be the gravest of errors to assume that what he’s saying is true.

Netanyahu in 2002: “No Question” Iraq Pursuing Atomic Bombs

On September 12, 2002, Netanyahu testified at a U.S. House of Representatives hearing titled, “Conflict with Iraq: An Israeli Perspective.”  At the time, “conflict with Iraq” wasn’t underway; rather, it was being contemplated—and aggressively pushed by the Bush administration, Netanyahu and others.

Scanning his testimony, we find little to distinguish what Netanyahu told us about Iraq in 2002 from what he tells us about Iran in 2012:

• “There is no question whatsoever that Saddam is seeking and is working and is advancing towards the development of nuclear weapons—no question whatsoever.”
• “Saddam is hell-bent on achieving atomic bombs, atomic capabilities, as soon as he can.”
• “Every indication we have is that (Saddam) is…pursuing with abandon, pursuing with every ounce of effort, the establishment of weapons of mass destruction, including nuclear weapons.  If anyone makes an opposite assumption…that is simply not an objective assessment of what has happened.”
• “…this is not a hypothesis. It is a fact.  Iraq, Iran and Libya are racing to develop nuclear weapons.”
• “Mr Kucinich…it is simply not reflecting the reality to assume that Saddam isn’t feverishly working to develop nuclear weapons, as we speak.”

We now know his emphatic claims were emphatically wrong.  That knowledge came at a terrible price—in American and Iraqi lives and limbs, and in more than $800 billion of U.S. taxpayer money…and counting. If Netanyahu was so categorically wrong about Iraq, is it wise to put faith in his claims about Iran?

Evaluating Today’s Claims About Iran

It wouldn’t be equitable to evoke the fable of The Boy Who Cried Wolf without acknowledging that, while the Aesop character’s first cries of “wolf” were false, his final one was not.  Ignoring his pleas, the villagers’ inaction allowed a very real wolf to slaughter the boy’s flock of sheep. With that in mind, and given what’s at stake, we have a duty to carefully examine warnings about Iran now presented by Netanyahu and others.

Whether said explicitly or not, these justifications for pre-emptive war typically have three underlying tenets:

1. Iran has decided to build a nuclear weapon.
2. Iran is genocidal.
3. If Iran acquires nuclear weapons, it will use them regardless of the consequences to itself.

Let’s examine each one separately.  As we do, bear this in mind:  The question isn’t whether Iran’s public rhetoric is offensive or its human rights record highly defective—those factors alone wouldn’t be sufficient to wage war.  If they were, we’d be bombing or invading much of the world.

Has Iran decided to build a nuclear weapon?

While 84 percent of Americans think Iran is already building nuclear weapons, the answer is actually no, according to:

• U.S. intelligence.  American intelligence still adheres to its finding in a 2007 National Intelligence Estimate on Iran:  ”We judge with high confidence that in fall 2003, Tehran halted its nuclear weapons program.”
• Israeli intelligence.  Earlier this year, the Associated Press reported that, according to senior Israeli officials, “Israeli has come around to the U.S. view that no final decision to build a bomb has been made by Iran.”
• The International Atomic Energy Agency.  The IAEA, which inspects the nuclear operations of Iran and other countries that have signed the nuclear Non-Proliferation Treaty, says it continues to confirm nuclear material isn’t being diverted to military use.  (It hedges, however, noting it can’t assure “the absence of undeclared nuclear material and activity.”  That is, it can’t prove a negative.)

While those who study Iran closest agree it isn’t developing a nuclear weapon today, some are concerned that its peaceful nuclear program could turn military, noting that the further its peaceful program advances, the faster Iran could pivot into military use.

Iranian Scientist Mostafa Ahmadi Roshan, Killed in January 2012 Car-Bombing Attributed to Israel and the MEK Terrorist Group (AP Photo)

However, those advocating the reinforcement of “crippling” sanctions, additional Israeli-sponsored terrorist assassinations of civilian scientists or unprovoked military attacks to send Iran “back to the Stone Age” should consider the possibility that their approach makes it more likely Iran will decide it needs nuclear weapons—as a deterrent…particularly when you remember:

• Iran has already seen the United States execute “regime change” invasions and decade-long occupations of both its eastern and western neighbors.
• The United States and Great Britain overthrew Iran’s own democratically elected leader in 1953 to replace him with a West-friendly tyrant.

Are Iran’s leaders bent on genocide?

Iranian President Mahmoud Ahmadinejad is widely quoted as declaring “Israel must be wiped off the face of the map.”   Time and time again, these words are offered as proof of genocidal intent, repeated not only by Netanyahu but by politicians, reporters, commentators and everyday citizens—the trouble is, he never said them.

What he did say, as he in turn quoted the Ayatollah Khomeni, was, “The Imam (Khomeni) said this regime occupying Jerusalem must vanish from the page of time.” As Arash Norouzi explains in a detailed analysis of the sentence and its context, Ahmadinejad was comparing the Israeli “regime” with other once-powerful regimes that had fallen, including the Soviet Union.

In other words, he wasn’t calling for the annihilation of a population, but for the dismantling of a governing entity. That’s highly antagonistic language, to be sure, but it’s not genocidal—any more than Ronald Reagan’s assertion that “freedom and democracy will leave Marxism and Leninism on the ash heap of history” was a pledge to incinerate the Soviet, Chinese or Cuban people.

Iran’s leaders have made countless more anti-Israel statements, but when examined closely—understanding that Iran does not officially recognize the government of Israel, claims it was wrongly created and says it denies the rights of Palestinians—these statements likewise seem focused on the Israeli government and not Jews as a people.  (The Anti-Defamation League maintains a catalogue of Ahmadinejad’s most provocative lines; review them for yourself in that light.)

Anti-Zionist Jews of the Neturei Karta

Ahmadinejad’s inflammatory statements are also awash with contempt for “Zionists,” yet, significantly,  not “Jews.”   There is a distinction: “Zionism” refers to the nationalist movement which championed the creation of the Jewish nation-state of Israel.  Underscoring that distinction, there are Jewish anti-Zionists who embrace Judaism but actively oppose the concept of the modern country of Israel.

Iranian leaders’ opposition to the formation and perpetuation of a government or country may be objectionable, but is it genocidal?  Those who accuse Iran of genocidal intent must reconcile the fact that Iran has the second-largest Jewish population in the Middle East—behind only Israel itself—living peacefully and openly, praying in synagogues and even operating Hebrew schools and hospitals …and the fact that the Ayatollah Khomeni, after the 1979 revolution, issued a fatwa prohibiting the harassment of Jews and other religious minorities.

If Iran acquires nuclear weapons, would it use them regardless of the consequences to itself?

This question might be rephrased another way:  Are Iran’s leaders rational and concerned with self-preservation, or are they impulsive and suicidal?  After all, a nuclear strike executed by Iran or by terrorists it equipped would invite Iran’s own devastation.

Some argue that religious fervor makes Iran’s leaders indifferent to their own nuclear destruction—a notion that first assumes a certain interpretation of Islam and further assumes religious considerations outweigh Iranian leaders’ interest in perpetuating their own power and privilege.  Even assuming those things, there’s a religion-rooted flaw in the hypothesis:  In 2005, Iran’s Supreme Leader, Ayatollah Khamenei, issued a fatwa declaring, per an Iranian government statement at the time, ”that the production, stockpiling and use of nuclear weapons are forbidden under Islam and that the Islamic Republic of Iran shall never acquire these weapons.”

Let’s turn again to those who have observed Iran most closely:

• “I think the Iranian leadership is composed of very rational people.”  Israeli Defense Forces Chief Benny Gantz.
• “We are of the opinion that the Iranian regime is a rational actor.  They act and behave as a rational nation-state.” U.S. Chairman of the Joint Chiefs General Martin Dempsey.
• “The regime is a very rational regime.  There is no doubt they are considering all the implications of their actions.”  Former Israeli Mossad Chief Meir Dagan.
• “Iran poses a serious threat but not an existential one.”  Former Israel Defense Forces Chief of Staff Dan Halutz.
• “We continue to judge that Iran’s nuclear decision-making is guided by a cost-benefit approach.” U.S. Director of National Intelligence James Clapper.
• “Iran is unlikely to initiate or provoke a conflict.” U.S. Defense Intelligence Agency Director Ron Burgess.

Finally, while proponents of military action against Iran may find fault with many Iranian government actions and policies, can they point to a single one that demonstrates an impulsive, reckless, suicidal or self-destructive tendency?

A Citizen’s Duty: Focus on Facts, Question Everything

The case for preemptive war against Iran withers under close scrutiny, revealing that the common caricature of Iran—as a maniacal, fanatical nation bent on nuclear genocide—cannot be substantiated.

If the United States is to act justly and in a way that advances our nation’s true best interest and avoids shedding blood in vain, our policies must be rooted not in misinformed passion, but an objective evaluation of the facts. Regrettably, when it comes to Iran, its nuclear program and its implications for global security, the American public operates in a thick fog of myth and misunderstanding—so much so, that when the truth is shared, it sounds to many like a falsehood…or perversely, a sign of disloyalty.

A truly loyal American, however, relentlessly seeks what’s best for the United States.  Doing so requires an unwavering dedication to learning the truth, and a never-ending vigilance against misinformation that flows both from honest mistakes and from purposeful manipulation by those advancing their own, separate interests.

If you found this enlightening, share it to enlighten others. 

Paul Krugman (Photo credit: Wikipedia)

Paul Krugman recently declared that the Apple iPhone—capitalists’ favorite example du jour of the power of free markets—somehow presents a compelling argument for higher government spending.  I give him full credit for achieving new heights of audacity, though perhaps we’d all be similarly audacious if we found that, no matter what sort of dubious logic we publicly embraced, our societal stock only continued to rise.  (Note to the mainstream media: Your de facto Economist Laureate has no clothes.)

A Sleight-of-Hand

Krugman begins his deftly deceptive economic foray by citing a JPMorgan research report that estimates the launch of the iPhone 5 could add between .25 to .50 percent to gross domestic product growth in the fourth quarter.

Noting that most of the iPhone’s price tag represents money spent on retailing, wholesaling and advertising, Krugman then observes that “these short-run benefits have almost nothing to do with how good (the iPhone) is.” Rather, he says, “the reason JPMorgan believes that the iPhone will boost the economy right away is simply that it will induce people to spend more.”  And if you agree that “more spending will provide an economic boost…you have to believe that demand, not supply is what’s holding the economy back.”

As Krugman dangles his Nobel Prize in one hand, he uses the other for a quintessentially Krugmanesque sleight-of-hand, in the form of his dismissive treatment of the money Apple spends on retailing, wholesaling and advertising—costs that are, like others, passed on to consumers in the final sale price.  He seems to imply that only the physical iPhone brings value to the economy, and that the other costs embedded in the final price are so much fluff.   They aren’t, and their role in boosting GDP shouldn’t be trivialized.  Apple spends significant sums on these functions in exchange for real-world benefits: enlightening the public about the features and benefits of its product, motivating them to take action and then closing the sale.

In many ways, these processes are as vital to the iPhone’s success as the design process. And what product’s price tag doesn’t include a host of costs that don’t convey a direct benefit to the consumer (from groundskeeping to corporate tax preparation)?  Of course, given his insatiable appetite for government spending no matter what the utility (this is the same Paul Krugman who said massive government spending under the guise of a hoaxed alien invasion would be a good thing), it’s easy to see why he might be blinded to the value of real service work when he sees it.

In Krugman’s World, Measures Are Ends in Themselves

Difficult as it may be, pretend for a moment that the service component of the iPhone’s cost offers only flimsy “short-run benefits” that are largely unworthy of consumers’ dollars.  Resting on that faulty foundation, Krugman’s conclusion that “the reason JPMorgan believes that the iPhone 5 will boost the economy right away is simply that it will induce people to spend more” is particularly telling.

An Apple iPhone: Exhibit A in the Case for Deficit Spending? (Photo credit: Wikipedia)

It’s telling because he derides the service contribution of the iPhone to GDP, and then declares this supposed waste is ultimately a success merely because it made the GDP needle move higher.  For Krugman, then, it seems GDP isn’t a diagnostic tool, it’s an end in itself. He embraces any phenomenon that inflates the measure regardless of whether the activity that drives it is beneficial to consumers or not.  In treating the patient that is the American economy, Dr. Krugman is a physician obsessed with altering the reading on the thermometer, without regard for whether his prescription fosters a healthy and lasting recovery.

Is summing the nation’s output of goods and services, GDP serves to measure the health of the economy.  However, a truly healthy economy is one where growth in the output of goods and services is driven by market forces—that is, the goods and services serve bona fide needs and offer real value that consumers and businesses are willing to pay for.

The iPhone 5 won’t “boost the economy” in the fourth quarter merely because it boosts GDP per se.  GDP is a measurement. Apple’s new phone will boost the economy because it represents a valuable good, as signaled by businesses and consumers making individual purchase decisions with their finite resources—decisions that are then reflected in GDP.

Bent solely on moving the GDP measure, Krugman advocates another debt-fueled federal spending spree, with little care for where the money goes.   As Robert Tracinski at RealClearMarkets notes in his own dissection of Krugman’s iPhone stimulus theory, “what Krugman is advocating is precisely the plain transfer of money from one person to another, as if that is the only economically relevant fact.”

An economy isn’t healthy merely because money trades hands or the GDP measure rises in a given quarter—if that were the case, the prescription for prosperity would be simple: Let the Federal Reserve print money and pay everyone to do nothing.   Offered sarcastically, that credo is uncomfortably close to the nation’s policy trajectory.

Forever mistaking spending per se and “aggregate demand” for real-world economic progress, Krugman’s views might be amusing if they weren’t deemed credible by the legions of politicians and pundits he and his fellow Keynesians have duped.  Krugman’s opinions are dangerous because they ultimately amount to an irrational call for Congress to pile on debt at an even faster rate than today—as we sit $16 trillion in the red—and they provide Ivy League intellectual cover for those who would shrink from administering the uncomfortable prescriptions our country sorely needs.   

For a more thorough dissection of Krugman’s iPhone stimulus theory, read Robert Tracinski’s piece, “In Krugman, Keynes Meets Orwell,” at RealClearMarkets.  

Regrettably, war casualties now garner scant attention from a U.S. populace grown numb and a media complex increasingly fueled by celebrity news and shallow Red vs Blue political commentary.  And yet, there is another casualty of the War on Terror that receives even less attention:  the devastating damage to American civil liberties.

A Multi-Front Assault

Like the War on Terror, the assault on civil liberties has been waged across many fronts, some of them less known than others.  Conducted in the name of safeguarding citizens from harm, key elements of this onslaught have included:

• The USA PATRIOT Act.  Hurriedly passed by Congress and signed into law by George Bush just weeks after 9/11, the Patriot Act undermined Americans’ 4th Amendment protections against unreasonable searches and seizures.  Among other things, it empowers the government to demand financial records and telephone, internet and other communication data without court approval, lets the government obtain “John Doe wiretap” authorizations that fail to specify either the person or place to be surveilled, and—in Orwellian fashion—even infringes on the free speech rights of individuals only tangentially tied to federal investigations. 
  
• The National Defense Authorization Act.  Dodging public notice as best he could, Barack Obama quietly signed the NDAA into law last New Years Eve in the quiet of a vacation home in Hawaii.  The trouble lies in Title X, which codifies broad executive claims of the power to militarily detain, without trial and without a time limit, anyone suspected of being a member of Al Qaeda or the Taliban or—vaguely—”associated forces,” whether overseas or on American soil.  The vague language also snares those who are considered to “substantially support” them.  Ominously, there is no exception for American citizens.  And remember, none of these determinations is subject to court scrutiny, and those who are detained have no right to contest their confinement or, as South Carolina Senator Lindsey Graham grotesquely celebrated–a right to speak to an attorney.
• Executive Branch Executions.   Is there any greater example of tyranny than a president who has the unilateral and unchecked authority to execute anyone anywhere in the world, including his own citizens?  As first documented by The New York Times, President Obama, restrained only by his conscience, conducts secret meetings (with participants that disturbingly include political advisors), pores over secret evidence, and then orders secret killings—all beyond the scrutiny of the courts or anyone else.  His Majesty’s fatal touch has already extended to at least two U.S. citizens, one of them just 16 years old.  Most of these executions are carried out by drone strike, sometimes—borrowing from tactics associated with terrorists—followed by strikes on rescuers and funerals.
• Mass NSA Surveillance.  According to whistleblowers who formerly worked at the National Security Agency, a sinister transition took place after 9/11, in which the NSA, originally created to collect and analyze foreign communications, turned its vast spying capabilities on the American public.  They claim the NSA has gone beyond merely eavesdropping on individual citizens without warrants and has embarked upon a massive program, called “Stellar Wind,” that collects and then stores every email, internet visit and financial transaction of most everyone living in the United States.   (Sound far-fetched? Watch this short video at the New York Times.)

Who Are the “Bad Guys”?

Confronted with these developments, Americans tend to fall into one of two camps: Those who are alarmed by the destruction of vital Constitutional safeguards, and those who feel safer knowing terrorists have no place to run.  The latter invariably declare, “I haven’t done anything wrong: Only the bad guys need to worry about this.”

NSA Headquarters at Fort Meade, Maryland.

There’s the rub:  While these law-abiding citizens may understand “bad guys” to mean terrorists, their definition is utterly irrelevant.  Without due process and legislative and judicial checks and balances, the American people have no say in determining who the bad guys are.  In this dangerous new era, that decision is solely left to the President and his executive branch appointees.

Further, when it comes to entrusting the federal government with dangerous and unprecedented powers, we must look well beyond the current office-holders and candidates.  That’s precisely what Mitt Romney failed to do when he justified his support of the NDAA’s indefinite detention provisions with this flawed rationale:  ”I don’t think (President Obama)’s going to abuse this power, and I know if I were president I would not abuse this power.”

Putting aside the fact that unconstitutional and covertly-executed powers leave Americans with no recourse in the event of their abuse, this isn’t about trusting Obama or Romney or any one individual—Constitutional safeguards exist because we don’t know who will hold power one, 10 or 100 years from now.  That’s precisely why Thomas Jefferson, who had witnessed tyranny first-hand and appreciated how quickly it could emerge, urged, “Let no more be said about the confidence of men, but bind them down from mischief with the chains of the Constitution.”

The erosion of civil liberties has gone largely unnoticed by Americans, thanks to a mainstream media that has largely abandoned its duty to keep a watchful eye on the nation’s institutions.  That’s why it’s incumbent on each of us to enlighten our fellow citizens, dissuading them from trading liberty for a false sense of security in the midst of a vague and endless War on Terror.  

If our generation acquiesces in the destruction of our Constitutional safeguards on the flimsy basis that we, as law-abiding individuals, have nothing to hide and everything but the government to fear, we’re condemning our children and theirs to a dismal fate.

Today, that once-hopeful title now serves as a bitter reminder of a Supreme Court decision that—rather than restoring appropriate boundaries to federal power—instead broke an astonishingly wide new hole in the safeguards carefully crafted by our founders.

The Court Ceases Fire on the Commerce Clause

The 1942 case, Wickard v Filburn, inflicted upon the nation an utterly implausible if deviously imaginative interpretation of the Commerce Clause, one that disregarded the context in which the clause was written, severely eroded Constitutional restraint and helped enable the sprawling federal government we have today—and its ever-broadening threat to personal and economic liberty, state sovereignty and its own fiscal security.

In the health care case, while leaving Wickard fully intact, five justices found the Commerce Clause offered no justification for a federal government mandate to purchase insurance—or any other product. Chief Justice John Roberts’ opinion declared:

“The individual mandate…does not regulate existing commercial activity. It instead compels individuals to become active in commerce by purchasing a product, on the ground that their failure to do so affects interstate commerce.  Construing the Commerce Clause to permit Congress to regulate individuals precisely because they are doing nothing would open a new and potentially vast domain to congressional authority.”

The opinion goes further, sounding a series of alarms about what such an expansive Commerce Clause interpretation would imply for the nation:

• “The Government’s logic would justify a mandatory purchase to solve almost any problem.”
• “Under the Government’s logic,… Congress [could] use its commerce power to compel citizens to act as the Government would have them act.  That is not the country the Framers of our Constitution envisioned.”
• “The Government’s theory would…[permit] Congress to reach beyond the natural extent of its authority, ‘everywhere extending the sphere of its activity and drawing all power into its impetuous vortex.’ The Federalist No. 48, at 309 (J. Madison).”

Diabolus ex Machina

Given Roberts’ zeal in illustrating the perils of the government’s Commerce Clause logic, it’s almost inconceivable that he would then embrace a different premise to unleash essentially the same perils—and yet, that’s precisely what he did, declaring that the government’s mandate was within its power to lay and collect taxes.

To do so, he had to first conclude that the Patient Protection and Affordable Care Act’s financial consequence for not purchasing a qualifying health insurance plan—called, in Orwellian fashion, a “shared responsibility payment”—is a tax and not a penalty.  That conclusion flatly contradicts the language of the Act itself, which repeatedly refers to it as a penalty, never once in its 2,700 pages calling it a tax.  It also contradicts the positions taken by the law’s architects—including President Obama, who had memorably ridiculed those who would call it a tax.

More significantly, Roberts’ tax label is inconsistent with how the court has distinguished taxes from penalties throughout its history.  According to the non-partisan Tax Foundation, “tax” has been widely defined as “an exaction imposed for the primary purpose of raising revenue for general spending.”  If, however, Americans all rise to their newly-imposed “responsibility” to purchase health insurance, this so-called tax wouldn’t raise a single penny of revenue—making it clear that revenue can’t be its primary purpose.

On the other hand, the Tax Foundation notes, a penalty “is an exaction imposed for the primary purpose of punishing the payor for an unlawful act.”  As the dissenting justices note in their opinion, the Act:

commands that every “applicable individual shall . . . ensure that the individual . . . is covered under minimum essential coverage”…[and]…states that, “if . . . an applicable individual . . . fails to meet the requirement of subsection (a) . . . there is hereby imposed . . . a penalty.” (emphasis added).

Chief Justice John G. Roberts (Photo: Wikipedia)

Clearly this is not a tax carrot—like a deduction for retirement plan contributions—but rather a federal stick used to penalize those who disobey a federal command.  Roberts embraced the notion that the mandate “makes going without insurance just another thing the government taxes, like buying gasoline or earning income”—blissfully unware, it would seem, of the vast chasm between taxing consumption or income and taxing a citizen’s decision to defy a government order to buy something the federal government thinks he should own.  Or, more fundamentally, the difference between taxing activity and taxing inactivity.

This plot twist was all the more surprising since not one of the lower courts had found the tax argument plausible.  Worse, Roberts remarkably declared the mandate both a penalty and a tax, conveniently calling it the former to permit the court to rule on the case and the latter to uphold its constitutionality.  It was a first:  Until Justice Roberts’ dubious display of cognitive dissonance, never in the long and varied history of Supreme Court tax rulings had an imposition been determined to be both a penalty and a tax at the same time.

A Broad and Intrusive New Federal Power

• “By statute, the (shared responsibility payment) can never be more” than the price of what Washington is commanding them to buy and “for most Americans the amount due will be far less”.   (Note: The insurance penalty varies by income,  reaching, for example, $2,250 at $100,000 of income)
• “It may often be a reasonable financial decision to make the payment rather than (the) purchase”
• The penalty doesn’t apply to households whose income is too low to pay federal income tax
• “The payment is collected solely by the IRS”
• There are no “negative legal consequences…beyond requiring a payment to the IRS”
• It “produces at least some revenue”
• The more the merrier:  Roberts felt it was tax-like because “it is estimated that 4 million people each year will choose to pay the IRS rather than buy.”

Etched in precedent, this list of attributes now offers a recipe for concocting new challenge-proof mandates far from the realm of health care.  Indeed, the universe of things the government can tax you for not buying is largely limited by the imaginations of legislators and lobbyists—solar panels, U.S. automobiles and fitness club memberships could all be fair game.   Who knows—with the federal debt racing toward $16 trillion, Americans may someday face a “solvency responsibility payment” paired with a command to buy U.S. Treasury debt.  

But that’s only just the beginning.  With Roberts noting that “taxes that seek to influence conduct are nothing new”—and with the Supreme Court offering ample evidence of its ability to expand previous boundaries—there may be little standing in the way of financial penalties for disobeying federal edicts that have nothing to do with purchase decisions.

While George Will and others are justified in taking a measure of satisfaction in the Supreme Court’s rejection of an expansion of government power under the Commerce Clause, Americans nonetheless face a grim reality:   The court’s enormously permissive Commerce Clause precedents are fully intact, and are now paired with a precedent that creates a new means of federal intrusion in the lives of American citizens.  

The Last Remedy for Runaway Federal Government 

President Obama, speaking after the decision and seeking to impart a sense of finality, declared, “The highest court in the land has now spoken.” But is the Supreme Court—as implied by Obama and assumed by most Americans—really the final authority on the constitutionality of federal laws?  Thomas Jefferson’s answer to that question is a resounding “no”:

“To consider the Judges of the Supreme Court as the ultimate Arbiters of Constitutional questions would be a dangerous doctrine which would place us under the despotism of an oligarchy.  They have with others, the same passion for party, for power, and for privileges of their corps—and their power is far more dangerous as they are in office for life, and not responsible, as the other functionaries are, to the Elective control.”

If not the Supreme Court, to whom can American citizens turn for protection of their individual liberties?  Jefferson’s counsel is again clear: “The true barriers of our liberty in this country are our State governments.”

With Wickard v Filburn now joined in dishonor by National Federation of Independent Business v Sebelius, and with personal liberty further jeopardized by an ominous new federal power, the time has come for individual states to protect their citizens against unconstitutional federal overreach—with a power that’s largely forgotten but firmly rooted in the American tradition:  nullification.  

In nullifying an unconstitutional federal law, a state declares it void and inoperative within that state, and may also make it a crime for federal or local officials to enforce it.  Wondering what state nullification of the Patient Protection and Affordable Care Act might look like?  Here’s a model nullification act from the 10th Amendment Center. 

 NFIB v Sebelius: Supreme Court’s decision and justices’ opinions 

However, if the Supreme Court merely overturns the insurance mandate—even if it tosses out the entire legislation that was wrapped around it—it will fall short of its duty, missing an opportunity to correct a previous high court decision that has been as disastrous in its effects at it was flawed in its logic.

Specifically, the court should abandon its decision in Wickard v Filburn—and with it, the notion that the Constitution’s Commerce Clause gives the federal government authority to usurp state power and intrude upon nearly every aspect of American life.

A Principal Catalyst of Federal Sprawl

The 10th Amendment, enacted to limit federal power, concisely reads: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” In other words, the federal government cannot assert any power or claim any responsibility not specifically given to it by the Constitution.

Given those constraints, how is it that the federal government has its clumsy hands in so many endeavors never mentioned in the Constitution—from subsidizing home mortgages (and inflating the housing bubble) to funding elementary education (and unleashing No Child Left Behind) to “investing” in green energy (by guaranteeing loans to ill-fated solar panel businesses) and meddling in agriculture markets (by paying farmers—and even non-farmers—to not grow crops)?

Much of the federal government’s current sprawl can be traced to 1942′s Wickard v Filburn and its excessively creative and expansive interpretation of the Constitution’s Commerce Clause.  That clause, found in Article 1, grants the federal government the power “to regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.”  While historical context makes it clear the clause was meant to aid the federal government in promoting free trade among the newly united states, Wickard v Filburn embraced a far broader definition of “commerce” that asserts a federal role in essentially any economic activity—even that of a single individual.

Destructively Creative Reasoning

Wickard v Filburn centered on the Agriculture Adjustment Act of 1938, which imposed federal limits on the production of wheat.  Roscoe Filburn, a small-scale Ohio farmer, dared to grow more food on his own private land than what the government allowed.  It’s important to note that, while the federal limits were aimed at bolstering the national price of wheat, Filburn’s extra wheat was grown for his own use for feeding animals, future planting, and to provide food to his family.  Regardless, the federal government fined him $117.11—the equivalent of more than $1,800 today.  Filburn refused to pay and the ensuing battle was elevated to the Supreme Court.

Roscoe Filburn: Outlaw Farmer (courtesy Mary Lou Filburn Spurgeon)

To side with the government, the court would have to somehow construe Filburn’s growing of wheat for his own consumption—on the mere 12 acres that exceeded his quota—as having a substantial effect on interstate commerce.   Regrettably, the court did just that, reasoning that, by growing his own wheat, Filburn would purchase less in the market.  And though Filburn’s individual activity couldn’t materially affect the national wheat market, the court further reasoned that the aggregation of such individual actions could theoretically have a substantial effect on interstate commerce—and with that, the court reinforced federal authority to punish individual citizens for planting food on their own property.

If only the court’s Constitutional damage were confined to this one atrocity.  Unfortunately, Wickard v Filburn opened a Pandora’s box, licensing federal authorities and the judiciary to use similarly creative thinking to conjure “interstate commerce” connections and thus justify federal impositions of all stripes.

Dissenting in a 2005 decision (Gonzales v Raich) that took Wickard’s flawed Commerce Clause logic to new depths, Justice Clarence Thomas said,  ”If the majority is to be taken seriously, the federal government may now regulate quilting bees, clothes drives, and potluck suppers throughout the 50 states.  This makes a mockery of Madison’s assurance…that the ‘powers delegated’ to the Federal Government are ‘few and defined,’ while those of the States are ‘numerous and indefinite.’ “  Perversely, what was once written with the intent of limiting federal power is now used to justify its relentless expansion.

A Chance to Close Pandora’s Box

Gonzales was especially disappointing since it followed two cases where the Supreme Court had finally demonstrated a willingness to put boundaries on Commerce Clause creativity:

• United States v Lopez, 1994.  A Congressional ban of gun possession within a thousand feet of a school was deemed unconstitutional.  The court wasn’t persuaded by the government’s argument that violence in and around schools could undermine the education system and thus the American economy.
• United States v Morrison, 2000.  The court struck down provisions of the Violence Against Women Act, despite the government’s claim that such violence has broad economic implications.

Opposing the federal position in these cases does not make one a supporter of schoolyard gunfights or violence against women.  Rather, it makes one a champion of our founders’ design of a governing arrangement that purposefully granted more responsibilities to the states than to the federal government—thus guarding the American people from excessive, centralized authority.

With our federal government borrowing 41 cents for every dollar it spent last month, a Supreme Court-prompted return to our Constitutional principles and a far slimmer federal apparatus may very well be the salvation of our republic.  While Lopez and Morrison slowed the runaway Commerce Clause train, it’s time for the Supreme Court to abandon Wickard and derail it altogether.

Recommended reading: In this amicus curiae brief, Senator Rand Paul examines the flawed logic of Wickard and urges the Supreme Court to use the health care case as an opportunity to abandon the decision.

Recommended viewing:  From reason.tv, an entertaining 10-minute video: “Wheat, Weed and ObamaCare: How the Commerce Clause Made Congress All-Powerful.” 

The income tax was originally sold to the American people as a means of “soaking the rich”—a phrase that seems refreshingly candid when compared to today’s cushioned yet calculated talk of asking the rich to “pay their fair share.”  While many early 20th-century politicians shared the feelings of our founders and resisted the notion of a direct federal tax on the product of a citizen’s work or investment, their fear of being tarred as protectors of the wealthy outweighed their conviction and the income tax was unleashed in 1913.

President Taft: Champion of the Income Tax

The original income tax, which Democrats defended as ”the fairest and cheapest of all taxes”, bore very little resemblance to the version confronting individuals and businesses today. Reviewing the first IRS Form 1040, four attributes are particularly striking:

• It was far simpler.  The instructions for the original 1040 fit on just one page, compared to 100 today.  Meanwhile, the full tax code spanned 400 pages, while today’s leviathan consumes more than 72,000.
• Hardly anyone paid it.  While the relentless growth of the federal government would force it to eventually engulf a huge swath of the population, the original income tax focused on only the most prosperous Americans.  Thanks to a generous personal exemption, only those with taxable income greater than today’s equivalent of $67,000 were snared by it, which meant 98 or 99% of Americans kept everything they earned from either their own work or from their savings and investments.
• Those who paid did so at much lower rates than today.  The original income tax applied a mere 1% rate on income all the way up to $452,292 in today’s dollars, according to the Tax Foundation.  Like our current code, the 1913 version applied higher rates to higher incomes—but topped out at just 7% on income over the equivalent of  a whopping $11.3 million today.  In stark contrast, there are many politicians in 2012 who think it’s perfectly reasonable for the federal government to lay claim to a full third of a citizen’s income above a far lower threshold than that.
• Received dividends were exempt from income tax.  At the outset, the income tax avoided what many consider an unjust aspect of today’s tax code:  the double-taxation of corporate dividends.  That is, dividends are paid out of after-tax profits, and those same dividends are taxed again when received by the investing shareholder.  Those arguing today that dividends should be taxed at the same rates as ordinary income would gain allies if they also embraced corporate deductions for dividends— preventing our gluttonous government from taking two bites from the same profit.

Imagine if, instead of proposing the far less invasive original version, politicians in 1913 tried to implement the income tax as we now know it.  Starting from a fresh slate, would Americans have considered it a reasonable proposal?   

Certainly not.  And yet today, after nearly a century over which the income tax has insidiously expanded its intrusion into our economy, our politics and our lives, millions of Americans who never knew a world without the income tax accept its continuation as inevitable.  Without consciously doing so, they surrender to what Milton Friedman called “the tyranny of the status quo,” where existing policies are fiercely guarded from change by politicians, bureaucrats and those who directly benefit from those policies.

Reconsidering the Income Tax

That said, Americans’ tolerance of the income tax could be on the cusp of a steep decline.  Spurred by a growing appreciation of the income tax’s many inherent flaws, legislation to repeal it and replace it with the FairTax—a national sales tax on new goods and services—has attracted 66 co-sponsors in the House of Representatives and eight in the Senate, along with the support of Libertarian presidential candidate Gary Johnson.

Of course, the most prominent voice calling for income tax repeal is Republican presidential hopeful Ron Paul, who would accomplish his goal via passage of the Liberty Amendment.  Like his stand on most issues, Paul’s position on the income tax seems firmly rooted in principle, not politics.  Indeed, when Paul recently discussed the basic concept of rights, he summarized it by saying, “Rights mean you have a right to your life, you have a right to your liberty (and) you should have a right to keep the fruits of your labor.”

Ron Paul

Like many of his other principled stances, Paul’s strident opposition to the income tax prompts some observers to dismiss him as extreme.  Perhaps, however,  what’s truly extreme is the notion that our government should have a presumptive claim on the income of its individual citizens.

If Ron Paul’s growing popularity is any indication, more and more Americans are reaching the conclusion that the “fairest” approach to income taxation is to have no income taxation at all.

On February 3, 1913, the United States ratified the 16th Amendment to the Constitution and the federal income tax was born.  Friday thus marked the 99th anniversary of a dark day in American history, one that continues to cast a long shadow over the nation.  Sadly, that shadow is so broad and omnipresent that it defies detection by the vast majority of Americans, who don’t realize how much brighter their lives could be without it.

Image via Wikipedia

As we enter the hundredth year of this failed experiment, it’s time to seek a completely different alternative.  Building a consensus for that starts with fostering a more acute understanding of the income tax’s many fatal flaws.

Complexity is in the income tax’s DNA.  From its original 400 pages in 1913, the IRS code has exploded to span more than 72,000.  Some of that growth springs from the never-ending competition between lawmakers and those who rightfully and legally exploit gaps in the code to minimize their tax burden.  However, even more so, it’s due to the flexible nature of the code itself, which offers lawmakers an irresistible temptation to leave their own mark for posterity and political gain.

Created for revenue, it’s used for social engineering, economic manipulation and special favors.  The tax code promises countless blessings if only we make the “right” choices in life.  The government uses tax law to entice us to buy electric cars, go to college, have kids, adopt children, buy houses, move to take new jobs, donate money to charity, save for retirement, buy public school bonds, install residential windmills…and on it goes.

Of course, the real action is on the corporate side of the code, where it’s much harder to suspend disbelief about the government’s good intentions—and where special provisions favor both big industries and smaller constituencies like thoroughbred horse owners, Eskimo whaling captains and manufacturers of toy wooden arrows.

It’s a magnet drawing money into politics.  The reason there’s so much money in federal elections is that Washington—with its carrot-and-stick tax code and runaway spending—has undue influence on trillions of dollars coursing through every household and business in the economy, and the ability to alter its course through law.  There’s simply too much money at stake inside the beltway and too many tax-code buttons for legislators to push.

It’s an enormous drain on productivity and resources.  According to IRS estimates, individual taxpayers and businesses collectively burn more than 7 billion hours a year complying with federal income tax filing requirements, diverting the workpower equivalent of 3.5 million people working full-time.

The vast majority of Americans have given up on trying to crack the IRS code single-handedly: 90% shell out money for tax software or a human’s help, to say nothing of the legions of attorneys and accountants retained by corporations.  (Resist the temptation to consider the employment of income tax professionals as a net positive for the economy:   It’s never a good thing to use society’s resources to produce…nothing.)

IRS Form 1040, Circa 1913 (click to enlarge)

It masks the cost of government.  Thanks to the insidious practice of  income tax withholding from employee paychecks—first enabled by the Revenue Act of 1942—it’s fair to say most Americans have little idea how much federal income tax they pay in a given year.  If you doubt that,  just wait for mid-April and ask friends and co-workers how much they paid for 2011.  Many will happily reply, “Nothing! I got money back.”  Concentrating on the final ledger-balancing act that is the filing of an income tax return, they forget that Uncle Sam steadily siphoned their money all year long.

Imagine if, instead of having taxes steadily withheld from their wages, people were required to write one large check representing their entire income tax liability.  If the cost of government were more explicit, it would surely check Americans’ collective appetite for our ever-expanding federal government.

It takes money out of the treasury.  According to the Joint Committee on Taxation, 30% of American “taxpayer units” actually made money from the tax system in 2009—thanks in large part to “refundable” tax credits. Unlike deductions and exemptions—which are used to calculate taxable income—a tax credit is a dollar-for-dollar reduction of your actual tax bill after you’ve calculated your income.

Refundable credits take that notion to an extreme—not only do they reduce your tax bill, but if the credit is larger than what you owe, the U.S. Treasury will actually send you money.  A major trend toward refundable credits prompted IRS National Taxpayer Advocate Nina Olsen to lament that “the IRS no longer is just a revenue collection agency but is also a benefits administrator.”

It opens a wide door to plunder and spillage.  Two examples among too many:

• Remember the first-time home-buyer credit rushed into law during the financial crisis? In 2008 alone, the IRS processed more than $600 million in credits for people who hadn’t purchased a home or who weren’t qualified first-time buyers.   Among them: 580 claimants under age 18, including a budding 4-year old real estate tycoon. It was later revealed that 1,295 prison inmates had used the credit to defraud the government of more than $9 million; 241 of them were lifers.
• The refundable Earned Income Tax Credit (EITC), targeted at low to moderate income individuals, offers an even more glaring example:  In 2009 alone, the IRS processed $11 to 13 billion in fraudulent or erroneous EITC claims.

Credit: Kevin Dean, BetaArt.com

It’s an invasion of privacy.  When it comes to government intrusion in the lives of citizens, nothing holds a candle to the income tax, which requires businesses and individuals to disclose a vast amount of information about their endeavors and their finances and then hold detailed records available for scrutiny by federal inspectors years later.

Filing a 1040 form is the tax equivalent of a TSA backscatter X-ray:  Among other things, the government demands to know how much you earned, where you keep your money, which investments you bought and sold,  how many children you have, how much alimony you paid, which charities you gave to, the medical procedures you had and how many nights you slept in your vacation home.  Is that in any conceivable way consistent with the principle of liberty that once defined our nation?

Finding a better way

While the under-100 crowd has lived under the income tax their entire lives, our nation has lived most of its life without it.  Almost a century after its creation, the income tax must now be recognized for what it is—an unmitigated economic and political disaster that unleashes unintended consequences that still grow in number and magnitude.  At a time when most talk of tax reform focuses on merely tinkering once more with rates, deductions and credits, we should instead focus our collective energy on ending the income tax altogether.

If we aren’t to tax income (something Americans generally feel they have too little of), one alternative is to tax consumption (something Americans tend to do in excess).  Consumption taxes—such as sales taxes—are routinely dismissed out-of-hand by critics claiming they unfairly burden the poor.  Perhaps they don’t realize some models address that concern head-on by providing advance sales tax rebates on spending up to the poverty level.

The most prominent and well-researched of those concepts is the FairTax—which is essentially a national sales tax on final retail purchases of new goods and services.  I’ll write more about the FairTax in the future; until then, visit FairTax.org…and imagine all of the personal work, worry and waste of the income tax vanishing, replaced by a simple and transparent tax paid at the register.

I couldn’t list every flaw of the income tax—which ones would you add to this indictment? Add a comment.