Most Harmful Government Program: The Tax Code

Our judges could not have made a finer choice.

A panel of 36 distinguished public policy experts and scholars—ranging from Nobel laureate Milton Friedman to Eagle Forum President Phyllis Schlafly to former House Majority Leader Dick Armey—has selected the Internal Revenue Code as the No. 1 item on this year’s Human Events list of the Ten Most Harmful Government Programs.

Unlike the Legal Services Corp., which was voted No. 1 in 2003, and the Medicare prescription drug plan, which was voted No. 1 in 2004, this year’s No. 1 lamentable program is actually—and unfortunately—authorized by the U.S. Constitution.

The 16th Amendment, ratified by three-quarters of the states in 1913, authorizes the federal government to impose a direct income tax. Immediately after it took effect, newly inaugurated Democratic President Woodrow Wilson used it to enact a progressive income tax.

Compounding Complexity

Ever since then, politicians in Washington, D.C., have been compounding the tax code’s complexity and its injurious impact on American liberty.

In 1939, a Democratic Congress and Democratic President Franklin Roosevelt formally consolidated an already complex body of tax laws into the Internal Revenue Code. Four years after that, Roosevelt signed a law compelling employers to withhold income taxes from their employees’ paychecks and send the money directly to the government. That vastly increased the amount of tax politicians could extract from the populace without inciting a political revolt—making it possible for the federal government to fund the modern welfare state.

Appropriately, our judges elected tax withholding the No. 4 most harmful government program.

This year’s list carries a different title from our lists in previous years. Last year it was the 10 “worst” government programs. Now it is the 10 “most harmful.” We made the change for two reasons: We were inspired by the debate sparked by our recent list titled, “The Ten Most Harmful Books of the 19th and 20th Centuries,” and, more importantly, the word “harmful” better describes what we don’t like about bad government.

The programs elected by our judges don’t just cost money, they also attack our values and corrode the spirit of liberty that makes America the greatest nation.

As in previous years, we initially asked our judges to nominate programs for the list. The judges were then sent ballots listing the nominated programs. They ranked their choices 1 through 10, with No. 1 being the program they believed to be “most harmful.” A program received 10 points for each No. 1 vote it received, 9 points for each No. 2 vote, and so on. The program with the highest aggregate score—the Internal Revenue Code—was named No. 1 on the list. When the ballots were tallied, we phoned spokesmen for the federal agencies responsible for each program to see if they could point out the constitutional provision, if any, that authorized the program.