Tax Reform Flops You Want Real Change? Support the Fair Tax

President Bush gave his tax advisory commission the mission of finding changes that would make the tax system simpler, less costly and foster economic growth.

Although the panel's final report isn't due until Nov. 1, advocates of serious tax reform are repulsed by the tentative recommendations so far. Recent suggestions called for getting rid of the Alternative Minimum Tax - a desirable goal - by cutting back on popular tax deductions for home mortgage interest and tax-free employer-provided health insurance. That's not tax reform; that's just fine tuning a code which contains about 20,000 pages and weighs untold pounds.

Real tax reform would not only get rid of the AMT, but also income, Social Security, Medicare and death taxes. Real tax reform would also kill off the Internal Revenue Service and save billions in tax compliance costs.

This could be done by replacing the existing tax system with a progressive national tax, as explained in the current best-seller, The FairTax Book, authored by U.S. Rep. John Linder, R-Ga., and radio talk show host Neal Boortz. Yet Bush's tax panel specifically rejects the national sales tax, claiming it's unfair to poor people.

Obviously they haven't read the book, or they're lying about it, because the Fair Tax protects poor people as well or better than the current system does. What the Fair Tax doesn't protect are the special interests that depend on the existing behemoth tax labyrinth for special treatment by Congress.

The tax panel's rejection of the national sales tax was basically a tacit endorsement of the status quo with minor changes. That doesn't cut it. Bush should send the panel packing, read FairTax if he hasn't already, then offer his own set of reforms.

"A hand from Washington will be stretched out and placed upon every man's business; the eye of the federal inspector will be in every man's counting house....The law will of necessity have inquisical features, it will provide penalties, it will create complicated machinery. Under it men will be hauled into courts distant from their homes. Heavy fines imposed by distant and unfamiliar tribunals will constantly menace the tax payer. An army of federal inspectors, spies, and detectives will descend upon the state."
-- Virginian House Speaker Richard E. Byrd, 1910, predicting the consequences of an income tax.

A Taxreform bump for you all.

If anyone would like to be added to this ping list let me know.

John Linder in the House(HR25) & Saxby Chambliss Senate(S25) offer a comprehensive bill to kill all income and SS/Medicare payroll taxes outright and replace them with with a national retail sales tax administered by the states.

H.R.25,S.25
A bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national retail sales tax to be administered primarily by the States.
Refer for additional information:

search: "national sales tax" OR "national retail sales tax" OR "fairtax"

It would be a hard government that should tax its people one-tenth part of their income.
-Benjamin Franklin

So lets look at what the maximum it would take to fund those functions clearly authorized under Article I Section 8 of the Constitution, in current dollars:

http://w3.access.gpo.gov/usbudget/fy2001/guide02.html#Spending

$334 Billion --- Defense & Military related expenditure
$ 31 Billion ---- Administration of Justice
$ 16 Billion ---- General Government
$199 Billion ---- Interest on the Debt
=========================
$580 Billion ---- Total

And a practical strategy to get there from where we are at:

Institute an across the board, Flat rate, single stage National Retail Sales Tax, which taxes all imports and domestic products with the same rate.

Replacing all current federal tax law with a retail sales tax would be 23% on new goods and services paid and receipted at the retail register. No hidden tax, no exceptions, exemptions everyone participates.

Such a tax acts in a natural manner to encourage the elimination of excess government functions through visibility of burden among all constituencies of the electorate.

Federalist #21:

It is a signal advantage of taxes on articles of consumption, that they contain in their own nature a security against excess. They prescribe their own limit; which cannot be exceeded without defeating the end proposed, that is, an extension of the revenue. ... Impositions of this kind usually fall under the denomination of indirect taxes, and must for a long time constitute the chief part of the revenue raised in this country.

The total federal government budget would move from $2,000 billions towards something less than $580 billions calculated.

The across the board federal tax rate on new goods and services would decline towards less than 6.7%.

As tax rate on sales decreases the economic burden on retail items, the sales volumes and growth in the economy would be tremendous allowing even further reductions in tax rates below that less than 6.7% theoretic level.

That is what I perceive as the ultimate achievements possible under a National Retail Sales Tax structured in the manner of the revenue bill H.R.25. Simple common sense applied to the principal of TANSTAAFEL,( no free lunch, everyone participates in paying their way in proportion to the benefit the extract from their consumption.) encourages the natural change in attitudes required of the electorate as regards the burden of government largess in their lives.

Thomas Hobbes from Leviathan

It is fairer to tax people on what they extract from the economy, as roughly measured by their consumption, than to tax them on what they produce for the economy, as roughly measured by their income

Hmmmmmm....... It's do able, with time and effort, once the blinders are removed from the electorate.

The suppression of unnecessary offices, of useless establishments and expenses, enabled us to discontinue our internal taxes. ... The remaining revenue on the consumption of foreign articles, is paid cheerfully by those who can afford to add foreign luxuries to domestic comforts, being collected on our seaboards and frontiers only, and incorporated with the transactions of our mercantile citizens, it may be the pleasure and pride of an American to ask, what farmer, what mechanic, what laborer, ever sees a tax-gatherer of the United States?
-Thomas Jefferson (Second Inaugural Address, March 4, 1805)

Only problem there is such a tax tends to hide the burden from the eyes of the electorate, who in the end all taxes get passed down to in their roll as consumers, providing little incentive to keep that eternally vigilant eye on them Congress critters more than willing to buy a vote with largess all the time picking the back pocket of their constitutents to get the job done.

Federalist #35:

"if the jurisdiction of the national government, in the article of revenue, should be restricted to particular objects, it would naturally occasion an undue proportion of the public burdens to fall upon those objects. Two evils would spring from this source: the oppression of particular branches of industry; and an unequal distribution of the taxes, as well among the several States as among the citizens of the same State."
"The maxim that the consumer is the payer, is so much oftener true than the reverse of the proposition, "

"When they are paid by the merchant they operate as an additional tax upon the importing State, whose citizens pay their proportion of them in the character of consumers. "
"Suppose, as has been contended for, the federal power of taxation were to be confined to duties on imports, it is evident that the government, for want of being able to command other resources, would frequently be tempted to extend these duties to an injurious excess. There are persons who imagine that they can never be carried to too great a length; since the higher they are, the more it is alleged they will tend to discourage an extravagant consumption, to produce a favorable balance of trade, and to promote domestic manufactures. But all extremes are pernicious in various ways. Exorbitant duties on imported articles would beget a general spirit of smuggling; which is always prejudicial to the fair trader, and eventually to the revenue itself: they tend to render other classes of the community tributary, in an improper degree, to the manufacturing classes, to whom they give a premature monopoly of the markets; they sometimes force industry out of its more natural channels into others in which it flows with less advantage; and in the last place, they oppress the merchant, who is often obliged to pay them himself without any retribution from the consumer. When the demand is equal to the quantity of goods at market, the consumer generally pays the duty; but when the markets happen to be overstocked, a great proportion falls upon the merchant, and sometimes not only exhausts his profits, but breaks in upon his capital."

Federalist #30:

"The more intelligent adversaries of the new Constitution ...qualify ... by a distinction between what they call INTERNAL and EXTERNAL taxation. The former they would reserve to the State governments; the latter, which they explain into commercial imposts, or rather duties on imported articles, they declare themselves willing to concede to the federal head. This distinction, however, would violate the maxim of good sense and sound policy, which dictates that every POWER ought to be in proportion to its OBJECT; and would still leave the general government in a kind of tutelage to the State governments, inconsistent with every idea of vigor or efficiency. Who can pretend that commercial imposts are, or would be, alone equal to the present and future exigencies of the Union? Taking into the account the existing debt, foreign and domestic, upon any plan of extinguishment which a man moderately impressed with the importance of public justice and public credit could approve, in addition to the establishments which all parties will acknowledge to be necessary, we could not reasonably flatter ourselves, that this resource alone, upon the most improved scale, would even suffice for its present necessities.

If this nation is to tax to meet it's obligations then it must tax openly and visibly under the eye's of the electorate, not through mechanisms that hide source of revenues from the perceptions of those who ultimately much finance them through their commerce, the American people.

If we expect to see control of government growth and spending, we had best look to make the burden visible to the whole of the electorate, not just the few designated as the token guy behind the tree.

That my friend is one of the bottomline purposes of going to the NRST, make the cost of largess perceptible to the entire electorate, even the lowest most rungs of the economic ladder.

To remove perception of the tax burdens of the individual, is to remove the goad which assures accountability of government to the electorate. Federal tax rates are high and government grows ever larger because a majority of the electorate do not perceive proportionately the burden their demand for largesse imposes on the minority of citizens.

The siren call for representation without taxation is the formula that got us where we are at today.

The ability to hide or disguise taxation from the view of large sectors of the electorate allows the Congress to get away with the creation of the evergrowing monster that it fosters.

Liberty and freedom have a price, responsibility. If the perception of burden laid by government is interfered with or avoided there are no brakes on the growth of government, the ultimate result is the end of freedom through creeping socialism.

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