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Thomas Jefferson repealed all internal taxes

Discussion in 'Historical Events & Figures' started by Truth-Bringer, Apr 7, 2007.

  1. Truth-Bringer

    Truth-Bringer New Member

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    Thomas Jefferson repealed all internal taxes and ran the government solely from trade tariff revenue.

    "1800 - With the assistance of his Secretary of the Treasury, Albert Gallatin, newly elected Republican President Thomas Jefferson sought to reorient the fiscal policy of the United States. Jefferson’s four main goals included: (1) a reduction in government expenditures, (2) a balanced budget; (3) a decrease in the size of the national debt, and (4) alleviation of the tax burden. The latter two objectives seemed to conflict with one another; specifically, Jefferson's desire to abrogate Hamilton's funded debt plan and retire all government obligations as judiciously as possible required a steady stream of revenue.

    Nevertheless, Jefferson abolished all internal taxes, including the whiskey excise tax and the land tax. Meanwhile, the Napoleonic Wars in Europe, though a diplomatic minefield for American statesmen, proved a significant stimulus to the economy of the United States. Vigorous commerce enriched merchants while customs duties swelled the federal Treasury. By 1808 the national debt had been reduced from $80 million to $57 million, even though the Louisiana purchase had added an $11 million liability. By 1806, duties proved so lucrative that Gallatin and Jefferson fretted about what to do with the surplus above that required for debt retirement. Treasury reserves increased from $3 million to $14 million between 1801 and 1808."

    http://www.tax.org/Museum/1777-1815.htm

    "Jefferson got repealed all the direct federal taxes passed by the Federalists and boasted that ordinary Americans would never see a federal tax collector in their whole lives."

    http://www.friesian.com/presiden.htm

    "In his term, Jefferson wanted to limit the national government's power. He also wanted to cut the federal budget and lower taxes. Jefferson promised to pay off the national debt, which at that time was $83 million. He encouraged agriculture and trade. To help cut spending, he appointed Albert Gallatin as secretary of treasury. Gallatin worked in the House of Representatives and was a brilliant financer. He greatly cut military and naval spending. Gallatin also cut the staff of the executive branch. Together, he and Jefferson cut the national debt to $43 million. This allowed Jefferson to repeal exise taxes on whiskey and other products and ended all internal taxes."

    http://home.earthlink.net/~mrstephen...ng page.html

    "When Thomas Jefferson was elected President in 1802, direct taxes were abolished and for the next 10 years there were no internal revenue taxes other than excises."

    http://www.ustreas.gov/education/fac...xes/ustax.html

    (Note: the government's site is inaccurate on details. Jefferson was elected in 1800 and the excise taxes were repealed also.)
  2. USMC the Almighty

    USMC the Almighty New Member

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    Yeah, TJ and his embargoes were so successful...
  3. Truth-Bringer

    Truth-Bringer New Member

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    Since "Treasury reserves increased from $3 million to $14 million between 1801 and 1808" and the American people had the highest standard of living in the world, I'd say his policies were very successful.

    Americans became the richest people in the world at that time precisely because they were not taxed and were paid in gold and silver.

    Meanwhile, the rest of the world was pretty much mired in poverty:

    "The Tzar did not share real power with these groups, and the poor classes were the most destitute and impoverished in Europe. In fact, up until the 1850's, the vast majority of Russia's millions of citizens were peasants -- and the majority of these peasants were still serfs! Russia was still based on repressive and grueling serf-based agriculture, while other countries in Europe were undergoing the industrial revolution! Poverty, illiteracy, suffering, and cruelty were the defining characteristics of Russian social and political life. With no protections under law, there was no way to voice discontent or work for change."

    http://www.hcc.hawaii.edu/distance/hist/reform.htm

    (Note the excuses at the end - Americans didn't have any legal protections for revolting against the British - but they did so to secure their freedoms. If you want more rights, you have to be willing to fight for them. The Russians apparently weren't...)

    While the following site on the mining industry doesn't mention taxes (rather conveniently - since it seems liberal) the population figures it shows are revealing. All these people are choosing to immigrate to the United States instead of elsewhere which proves that "word on the street" was that Americans were doing well and if you wanted a chance at prosperity, you should move to America:

    "In 1850, there were about two hundred Chinese people in America. When the Gold Rush occurred, the white workers in the West left their jobs to mine gold, drawing many Chinese to America. Their main goal of coming was to make enough money here to have a more comfortable life when they went back to China. By 1880, there were over 100,000 Chinese here."

    (^ proving they made their money - which was tax free and which was more than they could make in China - and went back with an improved standard of living thanks to our free(er) market economy.)

    The other population shifts occur, the link says, due to high food prices in Europe and various famines. But it fails to explain why they were suffering from agricultural problems. We'll see an example of why below by looking at Hungary.

    http://library.thinkquest.org/J003298F/immigration.htm

    Here's an interesting bit of history - and this really was the predominant experience for most other people in the world:

    "In the early to mid-eighteenth century, Hungary had a primitive agricultural economy that employed 90 percent of the population. The nobles failed to use fertilizers, roads were poor and rivers blocked, and crude storage methods caused huge losses of grain.

    (the rulers - i.e. government - were mismanaging things and had stifled the economy so that there was no incentive for anyone to perform these jobs...imagine that...)

    Barter had replaced money transactions,

    (The economy broke down due to government mismanagement...again, imagine that...)

    and little trade existed between towns and the serfs. After 1760 a labor surplus developed. The serf population grew, pressure on the land increased, and the serfs' standard of living declined. Landowners began making greater demands on new tenants and began violating existing agreements. In response, Maria Theresa issued her Urbarium of 1767 to protect the serfs by restoring their freedom of movement and limiting the corvee. Despite her efforts

    (government action failed to resolve what government action created in the first place...again, imagine that...)

    and several periods of strong demand for grain, the situation worsened. Between 1767 and 1848, many serfs left their holdings. Most became landless farm workers because a lack of industrial development meant few opportunities for work in the towns.

    (With the nobles and royals - i.e. government - managing the economy, there was no free industry - the market was stifled)


    Joseph II (1780-90), a dynamic leader strongly influenced by the Enlightenment, shook Hungary from its malaise when he inherited the throne from his mother, Maria Theresa. Joseph sought to centralize control of the empire and to rule it by decree as an enlightened despot. He refused to take the Hungarian coronation oath to avoid being constrained by Hungary's constitution.

    (Uh oh...I'm already nervous...sounds a little Bush or Clinton-like...)


    In 1781 Joseph issued the Patent of Toleration, which granted Protestants and Orthodox Christians full civil rights and Jews freedom of worship.

    (hmmmm... so there wasn't much personal freedom either in the absence of economic freedom...well imagine that...)

    He decreed that German replace Latin as the empire's official language and granted the peasants the freedom to leave their holdings, to marry, and to place their children in trades.

    (peasants - the common people had no property rights, no marriage rights, and no right to educate their children due to previous government action...it's a shame we can't get the tax rates on them...I'm sure it's high)

    The "Kingdom of Hungary", "Kingdom of Croatia", and the "Grand Principality of Transylvania" became a single imperial territory under one administration, called "Lands of the Crown of St. Stephen". When the Hungarian nobles again refused to waive their exemption from taxation,

    (so the other lesser rulers were exempt from taxation due to previous government action...talk about some hypocrites...they want to run everybody else's life but be exempt from their own rules)

    Joseph banned imports of Hungarian manufactured goods into Austria and began a survey to prepare for imposition of a general land tax.

    (and of course the guy loses to his own megalomania and blocks free trade and raises taxes...somehow I knew we wouldn't have a happy ending on this one...LOL)

    http://en.wikipedia.org/wiki/Hungary_in_the_18th_and_19th_century
  4. USMC the Almighty

    USMC the Almighty New Member

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    You make a strong argument, but look at the direct effects of the Embargo Act. The results were disastrous as exports plunged from $108 million in 1807 to $22 million in 1808. Smuggling was rampant.

    If the Emgargo Act was so successful, then why would Congress repeal it, and replace it with the intriguingly name Non-intercourse act, repeal that, and replace it with Macon's Bill (#2), and ultimately repeal that for good?
  5. RadicalActor

    RadicalActor New Member

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    I don't think embargoes are successful.

    They hurt both the domestic and the world economy.
  6. Truth-Bringer

    Truth-Bringer New Member

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    I'm not advocating an embargo. You guys are getting off topic.
  7. Truth-Bringer

    Truth-Bringer New Member

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    Oh I think the Embargo Act would have never been enacted had Britain and France not been at war with each other. It was a mistake and was repealed at the end of Jefferson's term. It was made as a political, not an economic, decision.

    Look, I don't advocate embargoes or high tariffs. I would support only a flat tariff. But what you are failing to acknowledge is the original intent of the Constitution on these matters and how the government was supposed to be funded. Here are the details:

    "Thomas Jefferson, one of our most important founding fathers, confirmed the purpose of the separation of powers between state and federal governments. He confirmed that the purpose of the federal government was to regulate commerce and interaction with foreign countries and that it never had the authority or jurisdiction to invade within states, either through legislation or through police powers:

    "The extent of our country was so great, and its former division into distinct States so established, that we thought it better to confederate [U.S. government] as to foreign affairs only. Every State retained its self-government in domestic matters, as better qualified to direct them to the good and satisfaction of their citizens, than a general government so distant from its remoter citizens and so little familiar with the local peculiarities of the different parts." --Thomas Jefferson to A. Coray, 1823. ME 15:483

    "I believe the States can best govern our home concerns, and the General Government our foreign ones." --Thomas Jefferson to William Johnson, 1823. ME 15:450

    "My general plan [for the federal government] would be, to make the States one as to everything connected with foreign nations, and several as to everything purely domestic." --Thomas Jefferson to Edward Carrington, 1787. ME 6:227

    "Distinct States, amalgamated into one as to their foreign concerns, but single and independent as to their internal administration, regularly organized with a legislature and governor resting on the choice of the people and enlightened by a free press, can never be so fascinated by the arts of one man as to submit voluntarily to his usurpation. Nor can they be constrained to it by any force he can possess. While that may paralyze the single State in which it happens to be encamped, [the] others, spread over a country of two thousand miles diameter, rise up on every side, ready organized for deliberation by a constitutional legislature and for action by their governor, constitutionally the commander of the militia of the State, that is to say, of every man in it able to bear arms." --Thomas Jefferson to A. L. C. Destutt de Tracy, 1811. ME 13:19

    Note that Jefferson said that the federal government was given jurisdiction over foreign affairs only, which includes foreign commerce. The only exception to this general rule is subject matter within the states over the following:

    1. Slavery under the Thirteenth Amendment.

    2. Counterfeiting under Article 1, Section 8, Clause 5 of the Constitution.

    3. Mail under Article 1, Section 8, Clause 7 of the Constitution.

    4. Assaults and infractions against its own officers under Article 1, Section 8, Clause 18 of the Constitution.

    5. Treason under Article 3, Section 3, Clause 2 of the Constitution.

    Every other type of subject matter jurisdiction exercised by the federal government within the states is not authorized by the Constitution, and therefore can only be undertaken with the voluntary consent and participation of the state governments and the people within them. This type of consensual jurisdiction is called “comity”.

    Jefferson’s statements above are also fully consistent with our system of federal taxation. For instance, Article 1, Section 8, Clause 3 of the U.S. Constitution limits federal taxation powers to commerce with foreign nations and between, but not within, states. 26 CFR § 1.861-8(f) also reveals that the only specific sources of “gross income” that are taxable under Subtitle A of the Internal Revenue Code are those associated with Domestic International Sales Corporations (DISC) and Foreign Sales Corporations (FSCs), both of whom are involved in commerce with foreign countries only. Even the IRS' own publications in the Federal Register confirm that this was the original intent of the founders. Below is an excerpt from the Federal Register, Volume 37, page 20960 dated October 5, 1972:

    "Madison’s Notes on the Constitutional Convention [see Federalist Paper #45] reveal clearly that the framers of the Constitution believed for some time [and wrote this requirement into the Constitution] that the principal, if not sole, support of the new Federal Government would be derived from customs duties and taxes connected with shipping and importations. Internal taxation would not be resorted to except infrequently, and for special [emergency] reasons. The first resort to internal taxation, the enactment of internal revenue laws in 1791 and in the following 10 years, was occasioned by the exigencies of the public credit. These first laws were repealed in 1802. Internal revenue laws were reenacted for the period 1813-17, when the effects of the war of 1812 caused Congress to resort to internal taxation. From 1818 to 1861, however, the United States had no internal revenue laws and the Federal Government was supported by the revenue from import duties and the proceeds from the sale of public lands. In 1862 Congress once more levied internal revenue taxes. This time the establishment of an internal revenue system, not exclusively dependent upon the supplies of foreign commerce, was permanent."

    http://famguardian.org/Subjects/LawAndGovt/Articles/SeparationOfPowersDoctrine.htm
  8. vyo476

    vyo476 Active Member

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    Unfortunately, the only truly damaging portion of Jefferson's economic policies was the principal of "protection." Tariffs and duties cause the price of imported goods to rise, meaning that domestic goods would generally have lower prices in American markets - meaning that Americans would buy domestic good more often than foreign goods. This seems peachy until you examine what Americans needed and Americans could provide in 1800. Jefferson's original vision of America was of an agricultural society, and that was backed up by the overwhelmingly agricultural nature of most of its economics (the only other major economic subgroup being the merchants, and they were just as necessary to Jefferson's vision as the farmers). So, there were plenty of farmers in America and they were producing food just fine...so instead it was manufactured goods, like textiles, that Americans were in want of. Jefferson's tariffs and duties had the negative affect of bringing industry to America - the protection afforded by the tariff meant that new domestic industrial businesses had a fighting chance in American markets against established European manufacturers, which would otherwise have been able to out-price the upstart American manufacturers. In essence, Jefferson's repeal of all internal taxes killed his vision of American society and just gave aid to Hamilton's vision of a class-based industrial America. Personally I think we would have been better off accepting low federal taxes to Jefferson's limited federal government and an extremely limited and selective tariff to encourage some level of independence from foreign markets. If we have to choose between two evils, taxes vs. industrialism (which eventually lead to corporatism) than I would certainly pick taxes any day of the week. Except Friday.
  9. Truth-Bringer

    Truth-Bringer New Member

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    And we have both right now. The percentage of tariffs charged is based on the product/resource. They've been eliminated for some products/resources, but still exist for others. Hey, why aren't you writing your Congressman telling them to stop making the prices for your goods higher?

    Tariffs, if moderate to low in level, are definitely superior to taxes because they don't tax any citizen directly or impede commerce within the United States.

    But I'm all for eliminating both tariffs and taxes and experimenting with user fees as a source of government revenue ;-)
  10. zerorelations

    zerorelations New Member

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    I wouldn't say that tariffs are superior to taxes. They have the same effect. Tariffs tax the citizens directly too since tariffs raise the price of the imported goods.
  11. palerider

    palerider Well-Known Member

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    Do you have nothing better to do that flit around the internet cutting and pasting the same old drivel on board after board after board?

    If you believe anything like what jefferson did would work today, you know even less about economic theory than I had given you credit for. Jefferson thought that this country would be better off as a farming nation than as an industrial nation. So much for his long term economic credibility. The man had some great ideas but his economomic theories were not among them.
  12. Truth-Bringer

    Truth-Bringer New Member

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    The truth needs to be spread. People certainly aren't going to learn about true history from the public fool system. Do you have nothing to do but follow me around? :D

    The U.S. existed and prospered just fine without internal taxation for a very long time. The experiment worked once, it's time to try it again.
  13. palerider

    palerider Well-Known Member

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    There is no truth that is applicable today to be found within Jefferson's mistake. Had he not convinced congress to repeal taxes and institute tarrifs, the US would have become a world power much earlier.

    If you want to spread some truth, tell people that libertarians are whiney "mine mine mine" types who simply don't want to accept any personal responsibility.

    Actually, jeffersons policies were responsible for an economic setback. A shrinking of the economy does not constitute prosperity. The experiment failed back then when world trade was in its infancy, today it would be a disaster. Anyone with an ounce of economic savy could see this. I guess you really do know less about economics than I had given you credit for.
  14. Man arent you the pillar of pleasentness so far every post ive read of yours you seem to think your so much more intelligent and better than the people responding.At least there are some in this country who accept whats happening and are trying to raise the awareness of others despite people like you



    Um your assesment of what Libretarian's are is simply childish, and one dimensional,and frankly WRONG. Nothing like pigeonholing everybody into one demographic
    problem being that is how we got racism ....


    sorry bud Im a Libretarian and i do not exhibit any of the tendancies you have spewed from your pie hole..dont want to accept persoanal responsibility ......your rich pal ....and so far off the mark its incredulous


    Do YOU have nothing better to do than Flit around the internet and spew trash out of your finger tips as i say every post of yours ive read degenerates to the same thing

    been a pleasure reading your tripe it has amused me this morning
  15. palerider

    palerider Well-Known Member

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    So far, in this one short post, you have exhibited them all.


    Care to philosophically defend libertarianism from any charge that I have made? You either embrace the philosophy and the paradox within it, or you don't. If you don't then you prove my point about picking and choosing and further reinforce my assesment of libertarians.

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