Frank Chodorov on the income tax
If we examine the income tax carefully we find that it is not a tax on income so much as it is a tax on capital. What the government takes from me is not what I consume but what I might have saved. To be sure, I might have spent some of it for a new suit or to paint my house, but some of it I might have put in the bank, where it would have become available, at interest, to someone who would have used it to build a new factory, enlarge his plant, open a store, or buy a farm. That's what generally happens to savings. Certainly, a good part of the earnings of a corporation are put to plant improvement or expansion, which it cannot effect if the earnings are confiscated. Hence, the effect of income taxation is to impair the capital structure of the country.
Since all wages come out of production, and since the amount of production is in proportion to the amount of capital in use, it follows that the income tax, by depleting capital investment, tends to reduce both job opportunities and wages. Furthermore, the goods that are not produced because of the lack of capital surely do not help the consumer; the less goods on the market the higher the prices he must pay. The income tax therefore hurts the wage earner to a far greater extent than by what is filched from his pay envelope. It hurts him by increasing his cost of living and reducing his earning power.