In 1913, two things happened that put the United States of America on the trajectory that has led us here. And they are heavy debts and a United States Senate unresponsive the needs of their individual states. First, the Revenue Act of 1913 was passed and imposed a one percent tax on incomes above $3,000, with a top tax rate of six percent on those earning more than $500,000 per year. Approximately three percent of the population was subject to the income tax. It was sold on the idea that only the rich would pay it. Sound familiar? Today, the rates are from 10% to 37% based on income. In general, higher income people pay more in income tax and middle to lower income people pay more in payroll tax. Prior to 1913, the federal government had to make their case to add tariffs or other kinds of taxes. The Revenue Act of 1913 opened the door to out-of-control spending. In 2019, before Covid, we took in more revenue than any year in the history of our country and still overspent by round about a trillion dollars and that is all thanks to the Revenue Act of 1913.
Second, also in 1913, the 17th Amendment to the Constitution was ratified that allowed direct election of United States Senators instead of appointment by the state legislatures. On its face, one might say, “Direct election is better because the people decide, right?” You would think so but here is the truth. When a senator is appointed to the Senate by its state legislature, then the senator is beholden to the state’s interests which is what the Constitution outlines. My old boss, Sen. David Perdue said, “If that was the case, I wouldn’t have been senator.” I said, “You might not have felt the need to run if the senators were doing their jobs and meeting the needs of the states.”
To be honest, the direct election of senators “gets my goat” the most. Here are a couple of examples from recent history. Sens. Ossoff and Warnock should have been just a concerned about the loss of the All-Star game as anyone in the Governor’s office or in the Georgia Legislature. There should have been a united front supporting Georgia on that but because senators have become more nationally partisan than representing their states, they were afraid to buck the leadership in the senate. Another example is when the tornado hit Coweta County and FEMA turned down funding to help, Governor Kemp and Congressman Ferguson issued a statement, but our senators were nowhere to be found. That should have been a unified front also. If these senators have been appointed by the legislature, then they would have put Georgia first and been involved.
Finally, the direct election of senators caused the skyrocketing amount of money needed in all elections. A line can be drawn directly from the change in 1913 to direct election of senators to today and it is not pretty. Why should a senator from Georgia have to raise money from all over the country? It is because now senators have been nationalized, they answer to leadership in the body of the senate over the people of Georgia. They will deny it, but it is true. Georgia, or any other state a senator is representing, should be first on the list of priorities for a United States Senator from that state, but they are not. Heck, the state a senator represents is lucky to break the top 10 if you look at how they spend their time and resources.
I know things are not going to change, but we must analyze the costs of all the decisions we make and measure the unintended consequences. Next week we will look at 1966, the second worse year in policy in American history. That was the year that President Lyndon Baines Johnson mixed the Social Security and Medicare money with the general budget receipts and no one stood up to stop him.
