ABSTRACT
Taxation without representation, an eminently unfair idea from the perspective of many colonists, led to the famous "tea party" in Boston Harbor in 1774 that directly defied the authority of the British colonial administrators. During World War II, the government instituted automatic payroll deductions for federal taxes using a graduated schedule in which the tax rate rose with income. Conservatives generally favor levies on consumption or other activities that will not distort an individual's decision to work or save. Adam Smith was one of the first economists to understand that capitalism cannot thrive without the accumulation of a financial surplus for investment. The Conservative argument for a progressive consumption tax is embedded in the notion that the economy remains fundamentally constrained by insufficient savings on the part of individuals. Political ideologues of either the Right or Left will eventually come to understand that an optimal system of taxation can never be achieved.
