Cruz: Abolish The IRS

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.”

The 16th Amendment can never be nullified in state courts. The Supremacy Clause in Article V makes the Constitution the supreme law of the land. SCOTUS has has already ruled “[i]t is emphatically the province and duty of the judicial department to say what the law is.” Marbury v. Madison (1803) 5 U.S. 137, 177. SCOTUS has also expressly rejected state nullification of federal law. Cooper v. Aaron (1958) 358 U.S. 1, 18 (”No state legislator or executive or judicial officer can war against the Constitution without violating his undertaking to support it.”) Also, no Federal court has come close to holding the 16th Amendment was never ratified in the 100 some odd years the argument has been repeatedly raised.

Even so, repealing the 16th Amendment will not abolish the personal income tax. The 16th Amendment was ratified to get around the Pollock holding regarding direct taxes. A direct tax is a tax on real or personal property, imposed solely by reason of a taxpayer’s ownership. But Pollock held a tax on such property, such as a tax on rents or the interest on bonds, is also considered a direct tax, being basically a tax on property ownership, requiring apportionment. Pollock v. Farmers’ Loan & Trust Co. (1895) 158 U.S. 601, 637. The 16th Amendment abolished the apportionment requirement. However, Congress has had power to lay and collect taxes on personal income from the time the Constitution was ratified since the tax is indirect. Brushaber v. Union Pac. R. Co. (1916) 240 U.S. 1, 17. So, abolishing the tax on personal income will require an amendment of Art. I, § 8, cl. 1 to expressly prohibit such taxes and any other tax to be abolished.

What you say is true Allagion and I thank you for your concise learned view of Pollock and Brushaber.

Congress does indeed have the power to tax incomes as an indirect tax but such taxes must be ‘uniform’ and today they are graduated, therefore in violation of the uniformity clause and therefore again falling in the direct tax category now authorized by the 16th.

With respect to HR 25 (https://www.govtrack.us/congress/bills/113/hr25/text), the NRST rate is uniform and conforms completely as an indirect tax with the US Constitution. Therefore, the NRST can exist and operate outside the 16th and that is good news for when the 16th is repealed.

The problem with indirect taxes on incomes or spending is that it imposes a ‘disporportionate burden’ on those who are of lesser income. This was also a point taught to communist party members of the USSR who were schooled in how a progressive income tax system was a tool for wealth redistribution in capitalist societies. It is used and repeated, not surprisingly, by liberal leftist members of Congress when asked for their view of a consumption tax.

Such indirect taxes are labeled ‘regressive’ and are to be shunned in favor of ‘progressive’ taxes, where the adjective ‘progressive’ has nothing to do with political ‘progressive’ philosophy.

The ‘disproportionate burden’ argument was caricatured in this true story published in Harper’s Magazine in 1867 involving Congressman Davy Crockett:

http://fee.org/library/detail/not-your-to-give-2

“The power of collecting and disbursing money at pleasure is the most dangerous power that can be intrusted to man, particularly under our system of collecting revenue by a tariff, which reaches every man in the country, no matter how poor he may be, and the poorer he is the more he pays in proportion to his means. What is worse, it presses upon him without his knowledge where the weight centers, for there is not a man in the United States who can ever guess how much he pays to the government. So you see, that while you are contributing to relieve one, you are drawing it from thousands who are even worse off than he. “

Although the ‘disproportionate burden’ argument is valued by leftists and progressives, it is not surprising that it should be waved on their flag, for their role is to find whatever weakness exists in the American idea and exploit it. And as conservatives, it is our role to counter their actions by strengthening flaws or defects they find in the edifice of our Constitution.

The FairTax addresses the ‘disproportionate argument’ in a brilliant, innovative and inspiring way that adheres to the true spirit of the US Constitution. In so doing it injects tax progressivity (again nothing to do with progressive politics) that is eminently fair to all. One goal is not to tax the poor who cannot afford it but the provision in HR 25 is exactly much broader as it applies to all Americans, rich and poor alike.

In addressing the leftist criticism of how indirect regressive consumption taxes disproportionately burden the poor, the remedy included in HR 25 can be stated as follows:

“THERE SHALL BE NO FEDERAL TAXES ON SPENDING FOR THE ESSENTIALS OF LIVING.”

Such exemption must apply to each American and must be uniform for otherwise variable exemptions would translate to non-uniform net indirect tax rates.

To accomplish the above principle, a uniform ‘level’ of spending for the essentials of living must be determinable. Fortunately, it is. The ‘level’ is taken to be the poverty line.

For decades now the DHHS has perfected a means tested formula for determining the poverty line of income, earned or unearned.

HR 25 applies this poverty line to all Americans regardless of their income. A person’s income is not even a consideration when applying HR 25.

Although income is used in determining the poverty line and hence the level of essential income, it is translated to spending under a reasonable presumption that all Americans at or above the poverty line will spend at least the poverty line level of spending for essentials.

That means a family at the poverty line will spend ALL of any income they acquire on essentials (e.g. food, shelter, clothing, heat, etc.). For example, a grandmother relying on Social Security as her sole source of income is expected to spend all of her income on essentials. We are speaking here in a statistical sense.

To accomplish the principle of no federal taxes on spending for the essentials of living, HR 25 must design a practical means to ensure that no American pays taxes on spending at or below the poverty level. The provision in HR 25 that accomplishes this goal is known as the ‘Rebate’ or ‘Prebate’ (Chapter 3, Section 304; https://www.govtrack.us/congress/bills/113/hr25/text).

It is important to note that such a Rebate is a tax cut and therefore fully in line with Conservative principles.

It is also important to note that the Rebate cannot be abused because it must be uniform and it applies only to spending and not to income earned or unearned. Therefore, even criminals who do not pay income tax or even foreign tourists who also pay no income taxes must spend on the necessities and essentials of living thereby paying the consumption taxes are eligible to receive a tax rebate on consumption spending only up to the essentials or poverty line.

Unconstitutional federal acts are subject to state nullification. There is nothing in the Constitution barring states from rejecting unconstitutional federal acts and the Tenth Amendment supports such IMO.

In Marbury v Madison, Justice Marshall and SCOTUS rightly claimed the constitutional power of judicial review of legislative acts. Marbury, however, does not rule against the power of the states to declare a federal act unconstitutional. The ruling does not directly address this issue at all. However, the ruling, in correctly characterizing the Constitution, does give weight to the inherent power of the states to so rule against either unconstitutional federal legislation or rulings.

The powers of the Legislature are defined and limited; and that those limits may not be mistaken or forgotten, the Constitution is written. To what purpose are powers limited, and to what purpose is that limitation committed to writing, if these limits may at any time be passed by those intended to be restrained?...[T]he theory of every such government must be that an act of the Legislature repugnant to the Constitution is void…From these and many other selections which might be made, it is apparent that the framers of the Constitution contemplated that instrument as a rule for the government of courts, as well as of the Legislature. Marbury v Madison, 5 U.S. (1 Cranch) at 176, 177, 179-80.

http://www.law.cornell.edu/supremecourt/text/5/137#writing-USSC_CR_0005_0137_ZO

Arizona has just passed such a law which allows the state legislature and court to determine whether a questionable federal act, like Obamacare for instance, is unconstitutional and if so, the state reserves the right to reject that law.

Likewise if a federal or state court found that the 16th Amendment is not a validly ratified amendment, then I think there's grounds for at least that state to nullify since it would not be truly part of the Constitution.

no Federal court has come close to holding the 16th Amendment was never ratified in the 100 some odd years the argument has been repeatedly raised.

Need a relevant case sited here preferably with an opinion founded on Constitution-based reasoning, something many modern-day SCOTUS opinions are sadly lacking. Since a case questioning the validity of the 16th Amendment could directly affect the paychecks and employment of federal employees like federal judges, one wonders how neutral a federal court would be about such a case. I'd like to see a state case that tried and had a Constitution-based ruling on this.

Barring invalidating the 16A, as previously discussed, a Constitutional Amendment repealing the 16th and implementing a CLEARLY DEFINED "consumption" tax (no VAT) could work.

Whether repealing the 16A would abolish the income tax is not a settled issue by any means. Pollack invalidated the income tax in question and Brushaber was a case about a stockholder who objected to a company volunteering to pay income tax thus reducing the stockholder's dividends. Not really on point although the Left and government loves to use it.

There's much confusion and controversy about the original intent and meaning of "direct", "indirect", and "excise" taxes" in the Constitution. Along with repealing the 16A, the proposed Constitutional Amendment could also prohibit any form of income tax with clear language stating such. The chances of passing such an amendment seems remote to me, but I'd like to see it.

Barring removal of the 16th Amendment, we're back to a flat income tax, although I agree with Hostage's reasoning that income tax is a kind of involuntary servitude (slave) tax. But until income tax is removed from off the table, the best we can do is a low flat tax around 10%.

Besides all of this, the greatest challenge we have in America is cutting out the unconstitutional portion of the $4 trillion federal government, which would shut down most of it. Because the likelihood of that happening is also remote, states who believe in a free Constitutional Republic with limited government need to seriously consider nullification of unconstitutional federal acts.

Could you answer me this? Do the states also have the power to nullify SCOTUS decisions such as Roe v. Wade or National Federation v. Sebelius if they consider them repugnant to the Constitution?

What is your definition of "Constitution-based reasoning" for the purpose of finding a case regarding 16th Amendment ratification? I ask because there are too many varied opinions on what is and is not constitutional.

As to the cases, yes, Pollock invalidated the Revenue Act of 1894. But it did not prohibit indirect taxes on incomes not derived from properties described in the case.

Brushaber is directly on point. The case was not just about corporate taxes. Brushaber was also challenging the statute since it required corporations to withhold and return individual income taxes derived from gains on investments the company held. So, interest on bonds, pre-distribution dividend payments, a percentage of return on a transaction, etc.

Furthermore, Brusharber claimed the Revenue Act of 1913 could not retroactively collect personal income taxes on dividends or bond interest from March 1, 1913 to October 3, 1913 when it was enacted. Why? He claimed the 16th Amendment didn't come into effect until a law was passed invoking it, which was October 3, 1913. Therefore, Pollock was still in effect until that date and he did not have to pay taxes on his investments absent apportionment.

SCOTUS rejected this argument. The 16th Amendment came into full force and effect when adopted on February 3, 1913. Therefore, the income tax on his investments as of March 1 did not have to be apportioned.

The Constitution defines the limitations and extent of federal power. SCOTUS, as the third branch of the federal government, is bound by the Constitution just as are the first two branches. Decisions regarding questions of the extent of federal power must therefore be made based on a good-faith effort to apply the Constitution AS WRITTEN and as ORIGINALLY INTENDED.

Judicial activism, as regards to the Constitution, is when a Justice inserts his own moral views in place of the Law of the Land, the Constitution as written and originally intended, thus attempting to rewrite the Constitution from the bench as the Justice sees fit. SCOTUS has had a sad history of judicial activism especially beginning with the 20th Century during which many earlier constitutionally-based assumptions and SCOTUS decision were either ignored or overturned without sufficient constitutional explanation.

Back to the point of this discussion which I think turns on

1) Is the “consumption” tax (with no VAT) better than the income tax? I believe it probably is. I think the “slave” tax argument is a good one and the extent to which government is allowed to meddle into our private lives to get an income tax is unconscionable and not what the framers of our Constitution had in mind at all.

2) What would it take to get a court decision (preferably state court) to declare the 16th Amendment null and void becasue it was never validly ratified? In the alternative, what would it take to get a new Constitutional Amendment that would repeal the 16th Amendment AND prohibit the income tax AND replace it with a “safe”, clearly limited consumption tax?

As I have said, either the 16th Amendment is removed or the discussion about the consumption tax is removed. One or the other. And if the 16th Amendment can’t be either declared invalid or repealed, then we’re back to pushing for a low, flat tax of around 10%.

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.