from MODERN TIMES : The World from the Twenties to the Nineties
- Revised Edition, by Paul Johnson, page 14
The destructive capacity of the individual, however vicious, is small; of the state, however well-intentioned, almost limitless.
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from FOR GOOD AND EVIL : the impact of taxes on the course of civilization
- by Charles Adams, page 382
Historians in the future will discover that in the tax system of the 1950s no bank informed the IRS about customers' affairs. Interest was not reported, withdrawals of cash were not reported, and nothing that went through an account was photographed and held in storage for Big Brother to see. Real Estate transactions were not reported to the tax man, stock transactions and dividends were not reported, income from other sources, as with independent work or services (form 1099), was not reported. Only wages were reported, and that was for the taxpayer's benefit in order to claim a refund. U.S. Customs did not require a declaration of the amount of cash you carried with you, nor did it confiscate any amount in excess of the limits permitted without informing on yourself. It was an honor system, through and through, and it worked.
The erosion of the honor system began over twenty-five years ago and has continued, year in and year out, until today practically everything of any fiscal significance is reported to the tax man. Before this avalanche of tax surveillance legislation, in the 1950s it was routine for a tax auditor to begin an audit with the comment that ours was an honor system, which is required for a free society. Taxpayers usually responded positively to this. Today, that is not the case, and the honor part is gone. Does this also mean that free society is in jeopardy as well?