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OPINION

Taxing, But Not a Tax

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Okay, the first leg of the fight on the constitutionality of Obamacare got under way yesterday and set a great tone for those looking to retain rights for individuals and preserve the balance of power in Washington.  Today is the big day; however, the individual mandate gets two hours of argument.  The notion is the federal government can make you buy a product you may not want or make you pay a penalty.  I interviewed Grace Marie Turner, president of the Galen Institute on Payne Nation and she said the law would cost the average family $20,000 a year, every year, for life.  The financial impact is enormous but potential loss of liberty is even more critical.

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So, conventional wisdom says the court will decide if penalties in Obamacare are not taxes, but of course, they are taxing and part of a long trail of government overreach that looked to citizens to foot the bill for reckless and gutless spending binges.   Here are some of the taxes that England tried throughout the years in efforts to pay for the royal family, colonize the world, or simply fill coffers depleted by lavish outlays. 

History of Obamacare-like Taxes

Not only a great oppression to the poorer sort, but a badge of slavery upon the whole people, exposing every man's house to be entered into, and searched at pleasure, by persons unknown to him.

William and Mary on repealing Hearth Tax, but it sounds like the intrusive nation of the new healthcare law and other initiatives by the administration.

Someone came up with the idea that you could have a progressive tax by checking out how many hearths (chimneys) were inside and so a tax was established that exponentially raised taxes based on the number in a single home.  As you could imagine, this tax was not popular.  Nobody liked the idea of government coming inside their homes and businesses.  Sort of like people not liking the idea of the government coming between patients and doctors or a panel deciding on the end of late healthcare.  The tax was collected twice a year, half on Michaelmas (September 29) and the other half on Lady Day (March 25), which made it easy to evade.

People bricked up their fireplaces long before inspectors arrived.  Moreover, the collectors stole much more money than was actually due.  There were exemptions made for those on poor relief and churches and charitable institutions, but it didn't stop the outrage.  The tax was repealed in 1689 by William and Mary who acknowledged it as a "badge of slavery."

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King William felt the people's angst at government trampling through their homes to count chimneys, but the money was a great lure.  So the next bright idea was a window tax.  You could count windows from outside, and surely the more windows one had the more money they must possess. In essence, it was a combination income tax and capital gains tax combined (An income tax was not introduced in Great Britain until 1842.).  There was a flat rate of 2 shillings per window, but those with more than ten paid 4 shillings.

Once again people were outraged from the start as it was clear the repeal of the hearth tax was a ruse, and this was the same thing.  So, people resorted to the same methods to evade paying.  Windows were bricked up or camouflaged in different ways.  I read where dummy windows were built and even though I can't figure out that strategy it is an example of how far people will go to avoid unfair taxes.  Opponents called the window tax a tax on air and light.  The glassmaking industry protested it would kill their industry.

I'm not sure why it took so long to repeal, but there was an official income tax in place by the time the plug was pulled on this.

Queen Anne came up with this possibly after admiring her own wallpaper.  And so there was a tax placed on patterned and painted wallpaper.   People got around this by purchasing plain paper and hen stenciling it by hand later.  Such a large cottage industry grew to get around the tax that in 1806 the falsification of wallpaper stamps was added to the list of offenses punishable by death.

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Note: 1712 also brought the UK the Soap Tax which saw tax collectors lock up soap boiling pans at night to prevent evasion of the tax. The tax was repealed in 1853 at a loss of one million pounds to the government. 

Hat retailers had to buy a license and display the sign Dealer in Hats by Retail.  Each man's hat had to be stamped inside the lining.  The cost of duties depended on the cost of the hat.  The rationale was the tax would be progressive as a rich man would have more hats than a poor man.  There were huge fines for milliners or hat owners that attempted to evade the tax and death for those that forged stamps.  

King George needed cash as his fight with the American colonies was taking a financial toll.  I imagine there was a meeting of trusted advisors and someone staring at the walls must have had a "Eureka" moment.  When the tax was placed on bricks, the construction industry responded with larger bricks.  The government came back with a tax on volume of bricks.  Homebuilders decided it was better to return to timber and even weatherboarding to build homes and businesses.  (Maybe it's a coincidence, but the famous fairy tale The Three Little Pigs first appeared in print around 1840 although the story was around before then—maybe back to 1784?)

Conclusion

I'm happy it seems the Supreme Court doesn't consider the penalties associated with the new healthcare law as official taxes or maybe thinks it's a moot point but in the end the whole thing is not unlike ruses tried in the past to extract more money from citizens.  I find it interesting the most overreaching of these gimmicks saw pushback even under monarchies.  I understand maybe President Obama thinks he is lurching toward a de facto monarchy (see comments to Medvedev) but these taxes slowed innovation, frustrated people and harmed economies in the past.

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