Recent debates about who pays taxes and how much miss the point.  Instead, people should be asking why the current system allows unlimited power to tax, restricted only by the "wisdom" of Congress.

The taxing power of the federal government was debated prior to ratification of the Constitution.  The Pennsylvania minority, who voted against ratification, raised the issue of unlimited taxing power in their dissenting addressⁱ:

By virtue of their power of taxation, Congress may command the whole, or any part of the property of the people.

Many did not see the danger of out-of-control government spending, thinking the Constitution would limit for what purposes taxes could be used.  This point of view was addressed in the Anti-Federalist Papersⁱⁱ (Brutus, Essay VI, 27 December, 1787):

But it is said, by some of the advocates of this system, "That the idea that Congress can levy taxes at pleasure, is false, and the suggestion wholly unsupported:  that the preamble to the constitution is declaratory of the purposes of the union, and the assumption of any power not necessary to establish justice, etc. to provide for the common defence, etc. will be unconstitutional. 

 

I would ask those, who reason thus, to define what ideas are included under the terms, to provide for the common defence and general welfare?  Are these terms definite, and will they be understood in the same manner, and to apply to the same cases by everyone?  No one will pretend they will.  It will then be a matter of opinion, what tends to be the general welfare; and the Congress will be the only judges in the matter. 

As "Brutus" could see in 1787, confidence in the limits provided by the Constitution proved too optimistic.  In recent decades, the words "general welfare" have become magic, enabling the federal government to do whatever it wants.  In the 1987 case of South Dakota v. Dole, the Supreme Court ruled the "general welfare" essentially unlimited, leaving the meaning up to Congress.

Justice Sandra Day O'Connor noted in her dissentⁱⁱⁱ:

If the spending power is to be limited only by Congress' notion of the general welfare, the reality ... is that the Spending Clause gives 'power to the Congress ... to become a parliament of the whole people, subject to no restrictions save such as are imposed.'  This ... was not the Framers' plan and it is not the meaning of the Spending Clause.

The words of James Madison^iv confirm that such was not the Framers' plan:

If Congress can do whatever in their discretion can be done by money, and will promote the general welfare, the government is no longer a limited one possessing enumerated powers, but an indefinite one subject to particular exceptions.

James Madison repeatedly argued that the power to tax and spend did not confer upon Congress the right to do whatever it thought to be in the best interest of the nation, but only to further the ends specifically enumerated elsewhere in the Constitution, a position supported by Thomas Jefferson^v.

The power of the federal government to tax has become indefinite, and the uses of those taxes out of control and often unrelated to the citizens who pay them.  All three branches of government act as if the words of James Madison were never spoken, the words of Article I, Section 8 defining congressional powers never written.  It is time to ask the philosophical and moral question: "What principle justifies a government demanding money from its citizens?"

In the real commonsense world we inhabit every day, a simple rule applies.  I am morally and legally obligated to pay for goods or services provided for me.  If my roof is fixed, I owe the contractor the agreed-upon price.  If I ask the neighbor's son to mow my lawn, I owe him.  If he doesn't show up, I don't.  If I buy something, the seller is entitled to payment.  If a charity asks for a donation, I am not under any obligation, but free to agree or decline.

In the less commonsense world of government, there is no such rule.  The government, simply by imposing a "tax," can take from us without having to provide any good or service.  Taxes have no relationship to the extent, if any, to which the government is providing something.  Services government does provide should be billed to all citizens, but half of American taxpayers owe no federal income tax, and most of those filers actually net benefits from federal income taxes.  Despite this, there are continuing calls for the "wealthy" to pay more of their "fair share," turning the meaning of "fair" upside-down.  It is as if my neighbor fixed up his house and sent me the bill.  Since I am wealthier, it is only my "fair share."  A court applying the logic of government would agree that I should pay, since the improvement of the neighbor's house is in "the general welfare."

A substantial portion of federal government spending is for neither goods nor services for most of us.  Under the "commonsense everyday life" rule, I would not be legally obligated to contribute to, among other things, government funding for ACORN to register Democratic voters and pressure banks, 61 billion for the Department of Housing and Urban Development, 25 billion in farm subsidies, or 535 million for a loan to a company with the right political connections.  None are goods or services for me, and I should not be forced to pay for them. 

Were the federal government to be held to the same standard as we have in our daily lives, there would be no staggering deficits.  Only government spending which actually serves the citizen could be billed.  Paying the government bill would be subject to the same legal standards which already apply to any other debt.  Some would not pay, and the loss would be distributed over the rest, but for most of us, paying a bill is a moral principle and a necessity to continue our economic lives.

A government allowed to bill only for services provided would be prohibited from giving out money to those with political connections or to buy votes.  So-called "entitlement programs" such as Social Security and Medicare would have to be fully funded by the participants.  There would be no legal loophole for redistribution of wealth.

In Ayn Rand's discussion of government financing^vi, she states:

In order to fully translate into practice the American concept of government as a servant of the citizens, one has to regard the government as a paid servant.

A paid servant must serve in order to be paid -- the moral standard of a government for the people.  The current concept of taxation reduces the government to the moral standing of the extortionist, and an extortionist is not for the people.

ⁱ Ralph Ketcham. ed., The Anti-Federalist Papers (New York, Signet, 2003), page 243

ⁱⁱ Ibid, page 284.

ⁱⁱⁱ Edwin Meese III, ed., The Heritage Guide to the Constitution (Washington, D.C., Regnery, 2005), page 96.

^iv Quoted from Mark R. Levin, Liberty and Tyranny (New York, Simon & Schuster, 2009), page 110.

^v Meese, op. cit. page 93.

^vi Ayn Rand, The Virtue of Selfishness (New York, New American Library, 1964), page 119.