Skip to comments.Should You Support the Liberty Amendment?
Posted on 11/25/2002 8:37:11 AM PST by winner45Edited on 11/25/2002 8:57:06 AM PST by Admin Moderator. [history]
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Report # 004 - June 11, 2001 * Copyright 2001, Vernon K. Jacobs
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Recently, Rep. Ron Paul (Rep., Texas) and others in the Congress introduced a bill to require a two thirds majority on any legislation that would require any kind of tax increase. The bill was defeated. Now, he is sponsoring a resolution to repeal the income tax. H.J. Res. 45 -- The Liberty Amendment would repeal the 16th Amendment, which enabled the government to impose an income tax. A brief summary of the reasons for the Liberty Amendment is available online at http://capwiz.com/liberty/issues/bills/?bill=28657
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But the Supreme Court has ruled that the 16th gave teh Federal government no bnew taxing authority, so measures beyond merely repealing teh 16th Amendment would be needed, like an explicit prohibition on any form of tax based on income.
You are both right and wrong.
It would indeed be a good idea to include an explicit prohibition on any form of tax based on income, since simply repealing the 16th Amendment would not prevent the taxation of income, based on apportionment.
However, the SCOTUS rulings that you referred to, state that the 16th Amendment granted the government the authority to tax income without apportionment. Try to tax income based on apportionment and you will find that many poor states (more than 50%) will go ballistic and fight such a tax. It would never make it through the Senate.
You are both right and wrong.
The 16th amendment was proposed to overcome the impairment that the Pollock decisions put on taxing income. Those decisions affected explicityl income from real and personal property only, it upheld the taxation of income from trades, occupations, professions and employments as being consitutional even though it struck down the current tax law in total for lack of servability and the intent of Congress to primaryily tax investment income of the time.
However, the SCOTUS rulings that you referred to, state that the 16th Amendment granted the government the authority to tax income without apportionment.
Only incomes from real and/or personal property.
Income from trades, occupations, professions, employments etc were seen to be taxable as excises (i.e. indirect taxes) not subject to the rule of apportionment.
First. We adhere to the opinion already announced,-that, taxes on real estate being indisputably direct taxes, taxes on the rents or income of real estate are equally direct taxes.
Second. We are of opinion that taxes on personal property, or on the income of personal property, are likewise direct taxes.
Third. The tax imposed by sections 27 to 37, inclusive, of the act of 1894, so far as it falls on the income of real estate, and of personal property, being a direct tax, within the meaning of the constitution, and therefore unconstitutional and void, because not apportioned according to representation, all those sections, constituting one entire scheme of taxation, are necessarily invalid.
16. The injustice of the conclusion points to the error of adopting it. It takes invested wealth, and reads it into the constitution as a favored and protected class of property, which cannot be taxed without apportionment, while it leaves the occupation of the minister, the doctor, the professor, the lawyer, the inventor, the author, the merchant, the mechanic, and all other forms of industry upon which the prosperity of a people must depend, subject to taxation without that condition.
You skipped pretty quickly over who would make the determination of what exactly constitutes GDP, and to what percentage of that arbitrary observation the government would become entitled, much less how and from whom it would collect it...
Excise taxes are the best vehicle, if we're to have taxation. By their nature (relating as they do to specific goods) they empower the citizen to pursue alternative goods if the government becomes to greedy. Sadly the producers of the targetted goods suffer, but indirect taxes empower the consumer to limit govt. growth. A universal sales tax, were it to replace the income tax, wouldn't manage that feat, it would just shift the burden around.
. A universal sales tax, were it to replace the income tax, wouldn't manage that feat
I don't know of any "universal" sales taxes being proposed other than "VATS" and their equivalent the Flat Tax.
Retail Sales taxes do not tax business to business sales, do not tax used goods, do not tax investment purchases, do not tax personal labor or industry applied to ones one benefit ...
Looks to be plenty of alternatives to avoid a retail tax should one be so inclined.
, it would just shift the burden around.
Seems to me some burden shifting is long over due. There are too many who do not participate or have inordinately low burdens as regard the tax system as it is.
The Honorable James DeMint (R-SC)
United States House of Representatives
THURSDAY, APRIL 5, 2001
"There has been a shift in the relationship between individuals and government, he argues, such that fewer and fewer are paying taxes at the same time that more and more are receiving increasingly generous benefits. If it becomes the case that most voters do not bear a financial burden for this largess, then there will be little to restrain--and significant political incentives to encourage--the continued growth of government. And at that point, DeMint warns, we have reached a major crisis in our democracy."
Everyone should at least participate in the nations tax system for the purpose of awareness of the cost that largess imposes, even if they their expenditure is such that rebates, credits or similar mechanisms cover the actual tax burden.
According to the most recent U.S. Treasury Department figures, in 1997 the top 1 percent of income-earners (those with income of $250,000 and higher) paid 33 percent of all federal income taxes. The top 5 percent of income-earners ($108,000 and over) paid 52 percent, and the top 50 percent ($36,000 and over) paid 96 percent of income taxes. Guess what the bottom 50 percent of income earners paid?
If you're among those who pay little or no federal income taxes, what do you care about tax cuts? Moreover, if you think tax cuts pose a threat to government handout programs, you might be openly hostile and support Al Gore's silly "risky scheme" talk. So many Americans paying little or no federal taxes makes for a natural spending constituency. It's like me in the restaurant: What do I care about extravagance if you're footing the bill?
To remove taxation of the individual, is to remove the goad which assures accountability of government to the electorate. Federal tax rates are high because a majority of the electorate do not share proportionately in 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.
Sir Alex Fraser Tytler (1742-1813). Scottish jurist and historian:
"A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largess from the public treasury. From that time on the majority always votes for the candidates promising the most benefits from the public treasury, with the results that a democracy always collapses over loose fiscal policy, always followed by a dictatorship.
Liberty and freedom have a price, responsibility. If that price is avoided there are no brakes on the growth of government, the ultimate result is the end of freedom through creeping socialism.
Right now the bottom 60% perceive little to no "Individual Income Tax" burden,(in many cases even a handout) and 70% of the public clamors for more from government looking for the top 40% of income earners/producers to foot the bill. That perception continues to grow ever stronger by eliminating even more participants from the Federal Individual Income Tax rolls as proposed in the tax reduction proposals through changes in personal exemption limits and other mechanisms such as the EITC.
We wonder why over 60% of the voters PERCEIVE no problem with the taxrates and vote for polidiots that promise to bring home the most bacon because they are the only ones that benefit from higher taxes with more spending on socialistic "gimme" programs. As this continues under Bush or anyone else for that matter, expect a liberal tax and waste congress for many years to come.
We are all paying through the nose, rich and poor while politicians play the tune of envy and resentment that Americans continue to respond to not understanding the full picture what is happening to them. The NRST is a means to open VOTERS eyes to the reality.
The Original Intent of the individual income tax is for political and social control not revenue collection. The Individual Income tax is maintained to establish and hold every person in the country perpetual legal jeopardy. That is a situation that must end with the repeal of the income tax from the statutes, and the prohibition of its use by Constitutional amendment that future generations will not face the same manner of manipulation and interference in their lives.
Of course I wouldn't trust the government with the numbers--I wouldn't trust the government to tell the truth even if they had nothing to gain by lying. Misleading the sheeple is such a way of life with them, they probably enjoy it on its own merits.
Also, you have to understand that my idea is not intended to stand on its own (although it would be a start); but as a backstop to prevent an end run around some other tax reform proposal, such as the main topic of the thread.
My general philosophy is that money is the lifeblood of politicians, and if their supply of it is forever limited, then so is the chicanery they can get into with it. Force them to beg for every penny, and they won't have enough time or money to interfere in the lives of citizens with honest jobs.
First, I would stay away from using quotes by Harry Browne. By his post 9/11 idiocy, he has reduced himself from the status of "also-ran" to the status of "persona non grata" in the eyes of most Americans. As soon as people see his name, they stop reading, discount the whole concept and go on to something else. Even though Browne is right on many issues and leans in the right direction on the 16th Amendment (albeit, for the wrong reasons), his vocal anti-American sentiment over the WTC and Pentagon attacks means that associating an issue with him is like a conservative candidate getting the endorsement of the ACLU and the Rainbow Coalition.
Next, the author correctly suggests that should the 16th Amendment be repealed, it would probably be replaced with a National Retail Sales Tax (NRST). But then, he makes the preposterous statement that, "the added cost of the goods that are subject to a national sales tax would result in some decrease in the use of those goods." The author has obviously either not done enough homework or is one of those looneys who thinks that we can get along without taxes. In fact, it has been shown conclusively, that in all but a few direct to market items, the intermediate costs of income taxes and compliance, that is built into the retail cost of every retail item is well over 50%. So, although there would be 23% or so added to the cost of each item, the resulting drop in intermediate tax and compliance costs would drive the net cost, including sales tax, down.
Then the author makes a totally unsubstantiated assumption that the states would begin to rely more on income taxes and less on sales taxes. I have read at least 10 major studies, on both sides of the tax issue and none of them have even alluded to such a ridiculous claim. Since the NRST would provide the same level of funding to the federal government as does the income tax, there would be no incentive in either direction, for the states to change the way that they are doing things today. Although I agree with the author's conclusion, that we need to repeal the 16th Amendment, it's becoming clear that he arrived at his conclusion based on incomplete data and as a result, some of the incorrect things that he is saying, actually hurts his argument.
On top of all of the above, the author makes the ludicrous suggestion that he would lose his Social Security, Medicare and other government services. Duh? He obviously has not read H.R. 2525. The NRST, as laid out in that proposed legislation, does not decrease any government services even one iota. That same legislation is certain to be introduced in the 108th Congress.
Then the author gets back on his Harry Browne kick. Enough already with Harry Browne! I voted for him, before he went anti-American. He now has as much credibility as Dan Blather.
Finally, the author makes his two most inane statements back to back, saying "Repeal of the 16th Amendment would simply prohibit the Federal Government from imposing a tax on income. It would then be up to the politicians to decide how to cut the various projects or programs that are being funded with the income tax." And, this guy is supposed to be an international financial planner? From what planet?
In fact, repeal of the 16th Amendment would not prohibit the federal government from imposing a tax on income. It would only mean that any tax on income would have to be apportioned. That is the only thing that the 16th Amendment did. It removed the apportionment clause, in Article I, Section 9 of the Constitution, as applied to a tax on income.
Constitution, Article I, Section 9 -
No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or enumeration herein before directed to be taken.
The 16th Amendment -
The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.
In the second part of that last statement, the author suggested that there would have to be cuts in many government programs. Yet, earlier in his article, he indicated that the income tax would likely be replaced with a National Retail Sales Tax. Therefore, since the NRST is revenue neutral, the author's suggestion is preposterous, as there would be no need to cut any government programs.
I applaud the author's attempt to promote the worthy cause of repealing the 16th Amendment. But, I fear that through his incomplete understanding of the issues, he is actually spreading misconceptions that could actually hurt his and our cause.