Posted on 01/12/2015 6:21:42 PM PST by 2ndDivisionVet
Republican Sen. Ted Cruz said Monday that Republicans should take advantage of their control of Congress to abolish the Internal Revenue Service.
“We need to pass fundamental tax reform making our tax code simpler, flatter, fairer,” he said Monday at Heritage Action’s 2015 conservative policy summit. ”And I’ll tell you, the single most important tax reform, we should abolish the IRS.”
“The last two years have fundamentally changed the dynamics of this debate [on the tax code],” he said. “As we have seen the weaponization of the IRS, as we have seen the Obama administration using the IRS in a partisan manner to punish it’s political enemies.”
“In my view there is a powerful populist instinct to take the 110,000 employees at the IRS, to padlock the building, and to put all 110,000 of them down on our southern border.”
Cruz quickly clarified that that remark was somewhat tongue in cheek, but joked that anyone who had traveled thousands of miles to cross the border and saw thousands of IRS agents in their way would definitely turn around and go home.
He acknowledged it’s not really possible to abolish the IRS or adopt a flat tax while Obama is in office, but said Republicans should take steps in that direction by doing whatever they can to simplify the tax code and make its burden lighter and reduce the power of Washington.
Republicans will get “walloped” in 2016 if they return to business as usual while controlling Congress, he said, and urged leadership to take on a bold agenda.
The election was not an embrace of a particular party but a rejection of the path the country is on, he said. “It was the voters saying, ‘the Obama economy, it ain’t working. We want something different. We want real leadership.’”
“If we simply settle into business as usual in this town and keep growing and growing and growing the leviathan and keep shrinking and shrinking and shrinking that sphere of individual liberty, we will demoralize the men and women who came out in November,” he added.
He outlined an agenda that includes repealing and replacing Obamacare, securing the border, passing the Keystone XL pipeline, auditing the Federal Reserve and taking a hard line against ISIS and Iran.
“Let’s lead with a big, bold, positive agenda that says to the American people you had a referendum and you rejected the Obama agenda — there is a better way,” he said. “That’s our opportunity.”
I rely pretty heavily on Milton Friedman's caution about going to a "consumption" tax becasue of the potential pitfalls, mainly the "value-added" tax feature ("VAT") which would be a disastrous complexity and opportunity for almost unlimited government intrusion into business operations. The first thing that needs to be decisively dealt with is the 16th Amendment: if it's valid, forget it, it won't be repealed. But if it could in fact be proven in court that the amendment was never ratified, then the states could begin working on nullifying an illegal and invalid "amendment."
If the 16A proved to be legally bogus, then we're back to Art I Sec 9 Clause 4 of the U.S. Constitution which only allows taxation based on proportion of (state?) census, which sounds like a flat rate, but not an income tax. A tax based on proportional population based on the census could mean no income OR consumption tax - simply a tax based on proportion of population based on the census.
This CPA completely supports the FairTax! Many other do too, but not enough of them.
OK, I’m seeing some really good arguments against the income tax, even a flat tax.
But the first and most difficult issue is the 16the Amendment. If it’s a valid, legally ratified amendment, forget it, it won’t be repealed and your best shot is a flat income tax.
But if it could in fact be proven in court that the amendment was never ratified, then the states could begin working on nullifying an illegal and invalid “amendment.”
If the 16A proved to be legally bogus, then we’re back to Art I Sec 9 Clause 4 of the U.S. Constitution which only allows taxation based on proportion of (state?) census, which sounds like a flat rate, but not an income tax. A tax based on proportional population based on the census could mean no income OR consumption tax - simply a tax based on proportion of population based on the census
I rely pretty heavily on Milton Friedman's caution about going to a "consumption" tax becasue of the potential pitfalls, mainly the "value-added" tax feature ("VAT") which would be a disastrous complexity and opportunity for almost unlimited government intrusion into business operationsAs would the new Excise Tax Bureau under the Fairtax.
As one who is eagerly looking forward to Cruz declaring for the presidency, I wish he'd stop the tongue-in-cheek crap and the pie-in-the-sky platitudes and start concentrating on what his vision is. No, he will never be able to do away with the IRS so why joke about it? What does he think he could realistically do with the tax code as president? I'd certainly like to hear about that. Why does he continue the conspiracy theories about the Fed? What is his realistic plan to secure the border and deal with the millions of illegals we have in this country? What is he going to do about health care once he repeals Obamacare?
The time for kidding around is over. The time for laying out how you differ from the GOPe and showing why you are our best hope in 2016 has arrived. I wish he'd get to it.
This “consumption” tax shouldn’t even be talked about until the 16th Amendment is deemed likely removable.
If and when the 16th Amendment is removed, we’re back to Art I, Sec 8, Clause 1 (only allowable reason for taxation) and Art I, Sec 9, Clause 4 (only allowable assignment of taxation) of in U.S. Constitution.
With the 16A gone (a long shot) the only constitutional assignment of taxation would be based on population proportion in the jurisdiction (probably state). So taxes would not be derived from income OR sales, but population proportion based on the census. Sounds good to me.
The biggie is shrinking government back to its constitutional size and limited functions. At that point, the amount needed to pay for defense and constitutional activities by population proportion would be a small fraction of what it is today.
2. Over the last 10 years why has the HR 25 FairTax had more than ten times the number of sponsoring members in Congress than the Flat Tax?So? Where has it got you? Why not?
3. With respect to
40 + states have sales taxes, some with no income tax, why can't you get yours passed?...Because, beginning with the rate itself it's being sold with lies and half truths.flat taxFairtax/no deduction laws:
a. How many have been passed in US world history?
b. What year was the first flat taxFairtax/no deduction passed?
c. Why did they not hasn't it succeeded?
You people have wasted 15+ yrs., including a Republican President with a Republican Congress and all you did was stomp your feet and jump up and down about how 23% is the same as 30%...Pure lunacy.
If you Fairtaxers want to see one reason why it doesn't get anywhere, look in a mirror.
> “But the first and most difficult issue is the 16the Amendment. If it’s a valid, legally ratified amendment, forget it, it won’t be repealed and your best shot is a flat income tax.”
HR 25 requires the 16th Amendment to be repealed within 7 years or else the new consumption tax goes away (sunsets). Here is the logic:
A. When HR25 is enacted it abolishes the Income Tax code completely and that means the income tax code can never come back unless it starts from scratch by passing legislation (it will no longer be law).
B. In the interim 7 years, the public will have had a taste of the new tax code based on ‘retail’ spending/consumption and the bet is they will prefer it greatly. Statistically, this is a given great odds on bet.
C. When the public sees the economic boost of 10% in GDP in the first year of the new tax code (originated by Harvard economic studies and other corroborators), the freedom of no filing, the beginning of the repatriating of $20 Trillion in offshore capital, the yearly congressional votes on the retail tax rate, the transparency, etc. etc. etc., will oppose the specter that it all go away if the 16th is not repealed.
LEGITIMATE CRITICISMS:
1. Americans will be shocked to see their purchases include a 23% federal retail sales tax at all retail counters and service. What is a retail counter? It is restaurants, grocery stores, home improvement stores, a plumber’s bill to a residence, an airfare ticket or hotel bill for individuals not businesses, etc. There will be no business taxes, no business to business taxes (B2B). There will only be taxes at the retail endpoint which is the bulk of GDP. Used goods are not taxed.
Presently all of the supply, production and service chain taxes are hidden in retail prices. For example, an 8’ 2 X 4 stud in Home Depot sits presently on the shelf priced at $2.00. Under the new code it will be priced at $1.54. At the cash register, the final purchase price will include $0.46 (23%) federal tax bring the total purchase out the door back to $2.00.
But as Americans see enormous federal taxes in their consumption, they will also note that January each year Congress is required to vote on the retail tax rate. The fact that the public sees for the first time the overall federal taxation in the things they purchase will be a huge check on Congress’ vote. This fact alone accounts for so much of the disinformation thrown at federal retail consumption tax proposals. One of the best secrets since 1913 is how tax amendments can be slipped through so easily to the Income tax code; for example at midnight when no one is looking.
2. Another legitimate criticism is that the sunset clause of HR 25 could be possibly extended and allow for the reintroduction of an income tax. Introduction of income taxes always sneaks by the public at a promised rate of only 1% and then it grows. For example, progressives in Congress who worship the Income Tax (including a Flat Tax which is an embryonic income tax) may introduce a bill to tax by only 1% on incomes of $10,000,000 or more to raise funds for emergencies like hurricane damage, floods, riots or whatever. They are sneaky.
The bet is that Americans will be be awake to these schemes just as they have been awake to Executive Amnesty and other hot button issues, and they will stay awake until the 16th is gone. Then it doesn’t matter.
After HR 25 is enacted into law, many of its supporters will be immediately tasked to repeal the 16th. There will be 7 years for that repeal but it is thought it will take much less than 7 years.
> “But if it could in fact be proven in court that the amendment was never ratified, then the states could begin working on nullifying an illegal and invalid “amendment.””
No need as HR 25 already calls for repealing it, or else.
> “If the 16A proved to be legally bogus, then we’re back to Art I Sec 9 Clause 4 of the U.S. Constitution which only allows taxation based on proportion of (state?) census, which sounds like a flat rate, but not an income tax.
Under Article 1. Section 8. Clause 1. indirect taxes such as excise or sales taxes and others are authorized but must be uniform throughout the United States.
Under Article 2. Section 9. Clause 4. direct taxes are authorized with apportionment.
Direct taxes were used primarily for funding wars or large public works projects like the Erie Canal and the Panama Canal. But direct taxes were apportioned according to the state populations and the states were tasked with collecting the tax however it was deemed fit according to their census numbers.
Some states taxed property such as lands, or horse carriages (”if it moves, tax it”) and so on. But there were huge problems as tenant farmers did not own the land they worked on yet landowners would pass on any property taxes to the tenants. As rents paid to landowners by tenants came into focus, some states decided to tax incomes from rents which they could ascertain by asking tenant farmers what was paid to landowners. This set off the income tax as a means of raising the required revenue that states needed to raise. It was shot down in courts many many times.
Another very large problem with raising direct taxes which the states were tasked and liable to raise was that states like New York, Massachusetts, Connecticut and Rhode Island were wealthy and states like Oklahoma were poor. So for every 100 residents of Oklahoma, the raised revenues would be a small fraction of any 100 residents in the wealthier states unless the rate was raised so high as to be a debilitating burden on the taxpayer. This also gave cause to impose an income tax without apportionment.
> “A tax based on proportional population based on the census could mean no income OR consumption tax - simply a tax based on proportion of population based on the census”
Article 1. Section 8. Clause 1 allows for a consumption tax as long as it is uniform in all states.
There are many many other advantages to a consumption tax. For instance, when there is an economic downturn, consumption tax revenues are more stable and robust than are income tax revenues which are quite volatile. People will forego big ticket purchases like boats, 2nd homes, exotic vacations, etc. but they will still need essentials such as water, food, transportation, medicine etc. And the essentials make up more than 80% to 85% of all purchasing. Even when a person loses their job or becomes disabled, they still have income for spending on essentials. States without income tax and only retail sales taxes survive economic downturns much more smoothly than states with income taxes (e.g. Washington State vs. California).
Another huge advantage is that American companies are not taxed at all and especially not on any goods and services sold or contracted overseas. That means American business is greatly and suddenly more competitive globally.
The consumption tax is hands down the winner in any debate but the problem is the Beltway tax crowd is scared to death of it because it takes their power away. Income tax legislative amendments is the bread and butter of tax lobbyists in Washington DC.
There are about 50,000 tax lobbyists camped inside the Beltway versus 144 million individual income tax filers.
My bet is on the 144 million. The process is one of education which can take awhile. It will come and happen just at the right time.
CPAs will have even more and more lucrative business under the new code from HR 25 because they get paid by retail businesses and state tax collection agencies, and not individual 1040 filers who can be a drag.
Many CPAs also prefer to work in business design, planning and maintenance rather than with individual income tax filers.
Bottomline the new tax code is better for accountants.
But the VAT crowd has also made their voice heard. What in HR 25 clearly disallows a value-added tax inside the supply chain and what would keep Congress, always lusting for more of our money, from putting a VAT in later (so they can hide the actual tax by keeping the % tax low but hidden behind the multi-layer tax)?
(BTW its (Art I, Sect 9, clause 4, for direct taxes authorized with apportionment)
lewislynn is a longtime troll who is a hater and heckler of the FairTax.
> “40 + states have sales taxes, some with no income tax, why can’t you get yours passed?...Because, beginning with the rate itself it’s being sold with lies and half truths.”
That’s a set of false statements.
> “You people have wasted 15+ yrs., including a Republican President with a Republican Congress and all you did was stomp your feet and jump up and down about how 23% is the same as 30%...Pure lunacy.”
It took 51 years to legalize the income tax without apportionment. It will take less time for the new code based on consumption.
And your reference to 23% versus 30% is easily seen as garbage by anyone that understands simple grade school arithmetic.
For example:
1. There are four pennies. Take away one penny from the four and you have taken away 25% FROM the total.
2. Now there are three pennies left. Add a penny to the three pennies and you have added 33% TO the total.
Where’s the lunacy in the above arithmetic?
HR 25 is not introducing a VAT but cannot prohibit a VAT from being introduced as separate legislation.
A VAT is authorized under the original Constitution. A VAT is an awful tax, it is largely hidden and it drives prices up.
To understand why a VAT does not exist in America today, ask yourself WHO would a VAT be imposed on?
The answer is that a VAT would be imposed on businesses.
American businesses are SO OPPOSED to any form of VAT that a VAT has never been seriously considered for legislation. It has ZERO support among the American public.
European and Canadian VATS are different because those governments have wide latitude over how they configure their tax policies. Whereas in America, all hell can break loose over proposed taxes. This is why Obamacare was never called a tax in the beginning but later deemed a tax in court. I hope it’s repealed entirely.
Note that for more than 98% of the American public, the 1914 income tax was levied at 1% and Americans shrugged their shoulders and said they could handle it.
The ‘sneaky 1%’ trojan horse was even tried in Washington State driven by billionaire Bill Gates’ father with a ***it’s for the children*** argument (schools). His initiative crashed and burned even inside liberal Seattle.
You see people do wise up to government sneak attacks over time.
With HR 25, I have met and worked with the writers of the legislation, the architects, professors, lawyers, economists, committee members, congressional staffers, etc. and I played devil’s advocate on every question. The writers of the legislation had turned over every stone and every issue multiple times to see what was possible to blow up in the future. There are some really intelligent minds, smart people behind HR 25.
Going from the antiquated Income Tax to a new Consumption Tax is really like going from dial-up to 4GB Broadband.
The fight is now not technical, it’s political.
...and educational, as are many things related to a better way of life with less government in our country.
How exactly can a Congressional law (HR 25) repeal a Constitutional Amendment? I don't believe that would be constitutional becasue the Supremacy Clause demands all laws must be IN PURSUANCE of the Constitution which would include constitutional amendments.
That puts 16A right back in the middle of what needs to be nuked first. In my view, the only way around the 16A (it will never be repealed) is to prove in court it was never validly or legally ratified. Once that was done, then we could pursue the arguments, pro and con, on HR 25.
With 16A in place, IMO, we can't talk about another tax because Congressional law cannot overturn a constitutional provision, and we would unwittingly be adding another layer of taxation on an already existing one.
> “How exactly can a Congressional law (HR 25) repeal a Constitutional Amendment?”
HR 25 cannot repeal a Constitutional Amendment. It can only make itself go away ‘sunset itself’ if the 16th is not repealed.
Repeal is done by separate legislation now before Congress, H.J.RES.104:
http://thomas.loc.gov/cgi-bin/query/z?c113:H.J.+Res.+104:
As soon as HR 25 is passed and signed into law by President Cruz, then a large portion of resources get shifted over to pushing the above legislation for repealing the 16th.
The thing to understand here is that the guys and gals on the committees who deal with the nuts and bolts of taxation, and the tax lobbyists, members and staffers of the CBO and the JCT; they all know each other, lunch with each other, their kids have play dates with each other.
Except the progressives will eat at one end of the lunch room away from conservatives and their kids are not allowed to play with kids from conservative families, usually.
Now progressives know that if Ted Cruz gets in, then HR 25 is front and center. They know this and they know it now.
They know they have lost the debate. But now they try to use scare tactics, name calling, smears and lies, anything to taint HR 25 supporters and sponsors; samething they do with the ‘Tea Party’ name.
But here’s the thing, they have to have an alternative to HR 25. And that alternative is the Flat Tax with no deductions. For progressives the Flat Tax preserves their cherished 16th Amendment and in fact it needs it to be legal. The Flat Tax gives them a clean slate to start their whole tax favor sales business over again.
I have seen them. As soon as HR 25 passes or HR 1040 for the Flat Tax passes, they will be getting to work the next day on raising the whole beast back up. To them it will be like remodeling a home.
So don’t be surprised if you see a lot of trolls here on FR quacking “Flat Tax”.
You can almost hear them now:
“Flat Tax”, “Flat Tax”, “Flat Tax”, “Flat Tax”, “Flat Tax”, “Flat Tax”, “Flat Tax”, “Flat Tax”
“Simple”, “Simple”, “No Deductions”, “No Deductions”, “No Deductions”, “Simple”, “Simple”, “Flat Tax”, “Flat Tax”, “Flat Tax” ...........
And when asked about the consumption tax? They will quack:
“Liars!”, “Lunatics!”, “23% vs. 30%!”, “BAH!” “Scammers!”, “Con Artists!”, “BAH!”, “Liars!”
And ask them again about the alternative?
“Flat Tax”, “Flat Tax”, “Flat Tax”, “Flat Tax”, “Flat Tax”, “Simple”, “Simple”, “No Deductions”, “No Deductions”, “Flat Tax”, “Flat Tax” ...........
That’s where they’re at.
I get so tired of the ranting lunatics who pop up around here, not reasonably discussing their side of the argument and seeking the best answer, but defending their pet idea at all costs. That’s what political parties end up becoming - not what’s best for America, but what’s best for the continuance of the political party.
As far as I know, you haven’t answered the Supremacy Clause and Amendment Clause problem about repealing the 16th Amendment (your link was basically a blank page). There’s only one way for the Constitution and its Amendments to be further amended and that’s found in Article V (must be a Constitutional Amendment, NOT an act of Congress).
Without the 16A gone, I am against a new layer of taxation. With 16A gone (looks like the best shot is state court(s) finding it was never legally ratified) your argument is a strong one IMO.
Getting rid of the 16A is the big deal IMO. If not, I move for a flat tax. Milton Friedman, who I highly respect, didn’t have too much of a problem with a low, flat tax. Again, adjudicate the 16A as invalid or constitutionally remove the 16A, and I’m all ears with HR 25.
That’s a real blast from the past.
At one of Gingrich’s town hall meetings back in the day, in answer to my question about the FAIR TAX, Gingrich declared that the then 100,000 IRS agents should be given M-16s and sent to the southern border.
Would work then. Works even better now!!!
Did you read the part that specifies that the states collect the FairTax?
And the part where the Feds monitor the states collection of the tax?
And the part where the businesses and the states that collect the tax get paid for doing so?
Under the FairTax, on American will ever have to annually disclose his/her private financial matters to a faceless bureaucrat: how much money a person earns is nobody’s business!
That single provision — I call it the FREEDOM! provision — makes the FairTax worthwhile!
You know LurkeyLiarLou, you are still full of lies, innuendo and pure speculation!
> “As far as I know, you haven’t answered the Supremacy Clause and Amendment Clause problem about repealing the 16th Amendment (your link was basically a blank page). There’s only one way for the Constitution and its Amendments to be further amended and that’s found in Article V (must be a Constitutional Amendment, NOT an act of Congress).”
Constitutional Amendments are proposed and then voted on but are NOT made law. If 2/3’s of both Chambers of Congress vote for the proposed Amendment, then the amendment proposal is passed with a choice selected for ratifying mode either by State Legislatures or by State Conventions. The 2/3’s+ passed amendment then goes to the office of the National archives where it is sent out to states for ratification and received back.
The States can also follow a similar route via a Convention of States.
I don’t recall you bringing up anything about the Supremacy Clause. I had said that HR 25 cannot repeal a Constitutional Amendment, it can only sunset itself if the 16th is not repealed.
The only entity that can repeal the 16th is comprised of 3/4’s of states (38) via ratification.
The Supremacy Clause is not a part of the constitutional repeal or amendments processes. But it does apply to passed laws. But we are reminded that HJ Res 104 is not made to be law but acts as official commitment.
The link I posted to you before for the House Joint Resolution goes blank periodically; I don’r know why. Try this link for the full text of the Amendment:
https://www.congress.gov/bill/113th-congress/house-joint-resolution/104/text
Note it is not a bill and does not need the President’s signature. The President is out of the loop when it comes to Constitutional Amendments.
I met Milton Friedman and he was very close to someone on my doctoral committee. He wasn’t against the FairTax and in fact encouraged its study and called it the ‘ideal’ tax:
“It’s central to the design of the FairTax that it is added only once: at the point of sale to the retail purchaser. It’s an upfront charge, not a series of hidden costs. If you hear someone refer to the FairTax as a VAT, you can be sure you’re listening to someone who hasn’t done his homework. Or who, for whatever reason, it trying to torpedo the FairTax.” — Milton Friedman
http://www.ontheissues.org/celeb/Milton_Friedman_Tax_Reform.htm
Interesting. You knew Milton Friedman? That’s pretty cool. I greatly admired him. And I have seen him say that a “consumption” tax would be a mistake and I assumed it was for the “VAT” reasons. But I’ve also know Friedman to change his mind. Maybe he did on this one.
I didn’t know you were talking about a Constitutional Amendment. You were talking earlier about a Congressional bill and HR 25 and stuff - that’s why I brought up the Supremacy Clause.
A constitutional amendment coming out of an Article V Convention of States could be a way of killing the 16th Amendment. I hope it happens.
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