Should You Support the Liberty Amendment?

http://www.offshorepress.com/jacobsreport/repeal16.htm ^ | ? | Vernon K. Jacobs

[winner45]

 

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on International Financial Planning

The JacobsReport is a free email newsletter that will discuss investment, business, tax and financial planning in an international context. Reports will be issued as the author's work schedule permits, but will usually be issued on a weekly schedule.

Should You Support the Liberty Amendment?

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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 

If you are in favor of repealing the income tax, you can express your views on the subject online by going to http://www.thelibertycommittee.org/repeal16petition.htm .

But don't be surprised if a lot of your friends, neighbors and even family think you are nuts.

Supporters of the Income Tax

There are a lot of people who are strongly opposed to any restrictions on the power of Congress to tax as they deem necessary. These are the folks who believe that the government should micro-manage the affairs of its citizens in every conceivable way. Nearly every federal politician benefits from the income tax because it provides the money with which to fund an assortment of programs that appeal to the voters. It also provides an incentive for substantial political contributions from supporters who want legislation to reduce their taxes or to subsidize some activity that the supporters favor. You can expect them to be vocal and strident in their opposition to the repeal of the 16th Amendment to the constitution. You can also expect them to spend huge amounts of money to sustain the status quo. 

For reasons that I don't fully comprehend, the mass media also seems to be highly supportive of the kind of government that taxes some citizens more than others and the kind of government that provides funding for a wide range of "benefits" for the "poor" and other special interest groups. You can expect them to rail harshly against any effort to repeal the income tax.  
 
A majority of people probably feel that any effort to radically alter the tax system in the U.S. is seriously unrealistic and is a waste of time and/or money. I also suspect there are even a lot of people who would not put their name on a petition to repeal the income tax because of a fear that the government or IRS might retaliate. 

Harry Browne, the Libertarian Party Candidate for President, has identified the major source of resistance to elimination of the income tax. Most people are reluctant to give up some benefits they are getting (directly or indirectly) from the government that are supported by the income tax and the Social Security or Medicare tax. For some, that benefit is Social Security for themselves or their parents or Medicare or even Medicaid, which pays for the nursing home care of those who are not able to afford the high cost of such care. In case it's not obvious, the Social Security tax and the Medicare tax are both based on income and would be prohibited if the 16th Amendment were repealed. 

Others have jobs with the government or with companies that get a major part of their income from the government. Millions are dependent to varying degrees on the money spent for military purposes. Almost everyone in the health care system in the U.S. is dependent on Medicare. Employees of non-profit organizations are likely to resist the repeal of the income tax for fear that people would no longer have an incentive to make contributions to their organizations. Companies that offer products that enjoy tax benefits would worry about the impact on their industry. Real estate, farming, education and the tax preparation industry are just a few that come to mind. The entire "military-industrial complex" and most of their employees can be expected to resist repeal of the federal income tax.  A large part of the construction industry produces buildings and roads under government contract. 

If you understand that taxes of every kind (at all levels of government) represent close to 40% of our national income, it should be obvious that a large part of those tax dollars represent income or benefits to someone. Nearly every family has someone who is substantially dependent on some government project or program. 

Then there are the many millions of people who are committed to some special cause which is being supported by government - whether it's the environment, the space program, medical research or any of hundreds (perhaps thousands) of others. 

Growing Opposition to the Income Tax 

But a growing number of people are ready to "storm the barricades" to get rid of the evils caused by the income tax. 

Many of them believe they will save more in taxes than they will lose in some kind of government benefits. This is the essence of the "Great Libertarian Challenge" posed by Harry Browne. He argues that you can't get rid of government programs on a piece mail basis because the support for individual programs will be more vocal and concentrated than the opposition to any specific program. It can only be done by getting a majority of people to agree to give up whatever government programs or benefits they like in exchange for a total elimination of the income tax. For more on this argument see http://www.harrybrowne.org or get a copy of his book, "The Great Libertarian Offer" from http://www.harrybrownestore.com/books.html 

But many of the people who resent the income tax object to it on non-financial grounds. High on the list is a near hatred for the IRS by many citizens. Closely related is the desire to restore some privacy by getting rid of the ability of the government to intrude into every nook and cranny of our private lives because of the income tax. Some object to the income tax because it does what it was intended to do. It imposes a tax on select groups and imposes different levels of tax on different taxpayers or groups of taxpayers. It is truly the most discriminatory tax in recent history. Some opponents of the income tax argue that it punishes those who are productive and rewards those who are not. A few people who have to cope with the complexity and the cost of the income tax system want to get rid of it because of the hidden costs (loss of productivity) it imposes in the form of the time or the expense of compliance. 

A hidden but growing cause of resistance to the income tax is that it is being used to control an assortment of activities in various ways. One example is the punitive taxation on investments in foreign mutual funds. Another is the insane maze of rules for employers who provide employee benefits and the potential penalties for failure to comply with the rules. Absurd penalties for failure to file an information return even when no tax is due is an abomination. Another is the assortment of tax incentives to invest in government approved projects. The income tax is an enormous source of political graft. Jobs are created for those who help successful candidates. Generous cost plus contracts are awarded to companies who support the politicians in power. 

Some of those who advocate the elimination of the income tax argue that its elimination will result in an immediate increase in productivity and investment. Those in the lower brackets who are mostly paying social security taxes may be likely to spend much of their tax savings at first. Those in the higher brackets will be more likely to invest their tax windfall. Those in the middle will do a little of both. Some of the tax savings will result in greater contributions to charitable activities, notwithstanding the loss of the income tax deduction. New spending will lead to some business expansion. New investment will lead to more productivity. The elimination of many government functions will cause those employees to seek work in some activity that is more likely to be productive in terms of producing goods and services that other people really want. There would be a huge increase in productivity by the elimination of the costs of compliance with the many thousands of pages of tax laws and regulations. Accountants would have to focus on accounting instead of on taxes. The cost of most basic goods and services would drop as the supply increases due to increased productivity. 

How Would Government Adjust?

A repeal of the 16th Amendment won't happen overnight. It will be a constant news story for years as various state legislators grapple with the implications and various lobbying groups argue about its merits. If it did pass, those who would be most harshly affected would have time to make plans to adjust to less government funding. 

It's almost a certainty that the Congress would resort to a national sales tax if it became clear that the income tax would be repealed. A national sales tax could be implemented fairly quickly and would provide for transitional funding of existing programs. However, 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. Certain basic goods (like food and lodging) would most likely be exempted. Higher rates would be applied to goods and services that are perceived as being non-essentials or as luxuries. 

If the federal income tax were repealed, the U.S. would become a "tax haven" for the rest of the world. There would be an instant and dramatic increase in the number of people from other countries who would migrate to the U.S. Huge amounts of investment funds would pour into the U.S. from around the world. Other countries would have to respond to prevent a huge loss of funds. In varying degrees, most of the other major countries of the world would be forced to reduce the tax burdens on their residents.

The repeal of the Federal Income tax would not prohibit the various states from continuing to use income taxes to fund their programs. Substantial amounts of the programs now funded by the Federal government could and would be shifted to the states. The states would begin to rely more on income taxes and less on sales taxes. Some states would resist the continuation of various welfare programs and would adopt a low rate of income tax or would not have an income tax at all. Citizens would be free to move to low tax states if they wish to do so. Competition among the states for industry and for residents would result in tax competition between them.

What are the Realistic Prospects for Repeal of the Income Tax?

Nearly half the income in the U.S. is funneled through some level of government. The U.S. Congress is virtually split 50/50 between Democrats and Republicans. (That also implies a similar split among the voters.) An amendment to the Constitution requires a two-thirds vote in each house of Congress and must be approved by three fourths of the states. People don't tend to support radical changes unless they are hurting and as long as the economy is in fairly good shape, drastic change is not likely to be supported. 

On the other hand, when the 16th Amendment was submitted for approval by the states, few of the politicians expected it to pass. But it did - and in nearly record time. (There are some who dispute that it was passed in full compliance with the law, but the courts have held otherwise and have refused to consider any further cases that claim the income tax is not legal -- for various reasons.)

The big question is the extent to which the frustration and dis-satisfaction with the consequences of the income tax have affected the voters. I suspect that most of the folks who are self employed and who believe they can adjust their business to doing without any revenues that are derived (directly or indirectly) from the income tax will vote to repeal the income tax. If everyone in the U.S. had to pay taxes the way the self employed pay taxes, repeal would be a near certainty. Most of those who are self employed have to write quarterly checks to the government for their taxes. For those who are over the 15% tax bracket, their marginal federal tax rate is about 40% of their self employment earnings after expenses. With state income taxes, the total tax bite is close to 50% in many states. 

If we could somehow get rid of the withholding tax for a few years, it would be a lot easier to garner support to repeal the income tax. 

Have I Voted For Liberty? 

After having explored some of the implications and consequences of a repeal of the income tax amendment, am I prepared to take a stand on the issue? Because I'm a tax accountant, most observers might expect me to argue against a repeal of the income tax. 

Obviously, if the income tax is repealed, I would have to focus on non tax related issues as an accountant, author or entrepreneur. If the Social Security tax were repealed, my mother and mother-in-law could become dependent on my wife and I. If the Medicare tax were repealed, we would have to find a way to provide for their extensive medical expenses. One of us would have to quit working to take care of them. My wife and I are both close to the magical "retirement" age and one of us would have to continue working if the income tax were repealed. 

On the other hand, we would have a substantial increase in our disposable income if the income tax were repealed. The tax savings would pay for a lot of our mothers' expenses. I also believe that the cost of a lot of goods and services would decrease substantially when the hidden costs of income taxes are removed. It would take a few years, but I believe the cost of medical care and drugs would fall sharply as government money is no longer available to support the high prices that have been caused by an infusion of government funds. 

Harry Browne doesn't believe it would be necessary to cut off Social Security benefits however. He argues that the Government has enough assets that can be sold to private buyers to pay for lifetime annuities (through insurance companies) for current Social Security recipients. But that would not be an integral part of the Liberty Amendment. 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. It would be up to them to decide how to deal with existing Social Security and Medicare recipients and with those are within a few years of retirement age.

My primary personal objection to the federal income tax is that it's very much like a cancer. It started small and wasn't very painful and didn't cause much economic damage at first. But it's grown to the point where it's almost beyond any cure. If we don't face up to this problem now, it will soon be too late -- if it isn't too late already. 

The income tax provides the money with which the U.S. can engage in imperialist policies toward the rest of the world. As the most powerful military force in the world, we are continuing to use our military and economic power to bully and intimidate many other countries. The citizens and leaders of those other countries may one day decide to retaliate. With the disintegration of the USSR, there are a growing number of smaller countries that have the ability to deploy nuclear weapons. Even if they don't resort to that form of retaliation, there is a growing potential for biological warfare. 

A long time ago, I discovered the basic principle that most people don't like to change unless they are hurting. When people are making enough money to get by and to enjoy a few luxuries, they will put up with an enormous amount of restraint and taxes. Right now, I doubt that enough people are in enough pain to be willing to accept the radical change that would result from the elimination of the income tax. But if no one begins to stand up and support a cure for the cancer that is continuing to eat away at our liberties and economic vitality, it may be too late for a cure. 

Each of us, one at a time, must decide if this is an issue that is important enough to ourselves and to our children or grandchildren to devote some time and money to try to cure the disease.

I have already "voted" for the Liberty Amendment by sending an email to my Congressman in support of the bill. I'm also taking a public stand through this issue of The Jacobs Report. If I'm given an opportunity to vote on it in my state, I will do so.

For More Information

I don't expect any of you to support this idea just on my say so. Rather than present you with a one-side perspective, I've tried to present both the arguments for and against the repeal of the federal income tax. I don't happen to agree with those who are advocates of the income tax. 

But if you are on the fence, I do hope you will be willing to study the issues further until you can arrive at a conclusion. Here are some further Internet information resources you can study to learn more about the subject. 
 

•  The Tax Foundation - http://www.taxfoundation.org 

•  The Libertarian Party Web site - http://www.libertarian.org 

•  The Freedom Network with links to dozens of other liberty groups - http://www.free-market.net 

•  Worldnet Daily - An Internet newspaper with a free market perspective - http://www.worldnetdaily.com 

• Americans for Tax Reform - http://www.atr.org/about/mission.htm 

•  The Cato Institute - http://www.cato.org 

Obviously, these are all groups that are in favor of elimination of the income tax. As far as I know, there aren't any organized groups in favor of keeping the income tax -- but there will be if the Liberty Amendment becomes a significant issue. 

Vernon K. Jacobs

Note:  If you wish, you may forward copies of this article to friends or family. I only ask that you forward the entire document and that my copyright and information about The Jacobs Report be retained in the copy. 

(C) Vernon K. Jacobs, 2001, All rights reserved.

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[winner45]

Sign the Petition to Repeal the 16th Amendment

[Libertarianize the GOP]

bump

[TBP]

I'm all for repealing the income tax and repealing the 16th Amendment (and a couple of others as well.) 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.

BTW, FICA is much worse than the income tax itself. I'd love to see that repealed, but no one talks about that.

[Poohbah]

About the only effect repealing the 16th Amendment would have is that income from rental property would become tax-exempt.

[Still Thinking]

How about a Constitutional amendment limiting the Fed's revenue as a portion of GDP (as calculated by some reasonably tax-averse third party). This would prevent the shift to some new and potentially more onerous form of wealth confiscation, and would, at the same time, give them an incentive to take a cost-benefit approach to legislation which would affect business development and the health/size of the economy.

[Action-America]

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.

 

[TBP]

I would agree with you entirely about a Constitutional amendment limiting the Fed's revenue as a portion of GDP. We should pick a relatively low starting level and roll it back from there. Begin at, say, 25 percent and roll it back 1 percentage point a year until it freezes at, say, 10.

The numbers are a little flexible, but you get the idea.

[ancient_geezer]

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.

 

Springer v. United States(1880), 102 U.S. 586

"The central and controlling question in this case is whether the tax which was levied on the income, gains, and profits of the plaintiff in error, as set forth in the record, and by pretended virtue of the acts of Congress and parts of acts therein mentioned, is a direct tax."

"Our conclusions are, that direct taxes, within the meaning of the Constitution, are only capitation taxes, as expressed in that instrument, and taxes on real estate; and that the tax of which the plaintiff in error complains is within the category of an excise or duty."

"[W]henever the government has imposed a tax which it recognized as a direct tax, it has never been applied to any objects but real estate and slaves."

 

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.

Pollock v. Farmers' Loan and Trust Company, 157 U.S. 429 (1895)

• "The people of the United States constitute one nation, under one government, and this government, within the scope of the powers with which it is invested, is supreme."

• "Without the States in union, there could be no such political body as the United States. Both the States and the United States existed before the Constitution. The people, through that instrument[the Constitution], established a more perfect union by substituting a national government, acting, with ample power, directly upon the citizens, instead of the confederate government, which acted with powers, greatly restricted, only upon the States."

POLLOCK v. FARMERS' LOAN & TRUST CO., 158 U.S. 601 (1895):

• "We have considered the act only in respect of the tax on income derived from real estate, and from invested personal property, and have not commented on so much of it as bears on gains or profits from business, privileges, or employments, in view of the instances in which taxation on business, privileges, or employments has assumed the guise of an excise tax and been sustained as such."

• "If that[rents from land] be stricken out, and also the income from all invested personal property, bonds, stocks, investments of all kinds, it is obvious that by a r the largest part of the anticipated revenue would be eliminated, and this would leave the burden of the tax to be borne by professions, trades, employments, or vocations; and in that way what was intended as a tax on capital would remain, in substance, a tax on occupations and labor. We cannot believe that such was the intention of congress."

• "We do not mean to say that an act laying by apportionment a direct tax on all real estate and personal property, or the income thereof, might not also lay excise taxes on business, privileges, employments, and vocations. "

• Our conclusions may therefore be summed up as follows:

  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.

• Mr. Justice WHITE, dissenting.

  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.

Flint v. Stone Tracy Co.(1911), 220 U.S. 107

• "The Pollock Case construed the tax there levied as direct, because it was imposed upon property simply because of its ownership."

BRUSHABER v. UNION PACIFIC R. CO., 240 U.S. 1 (1916)

• "the conclusion reached in the Pollock Case did not in any degree involve holding that income taxes generically and necessarily came within the class [240 U.S. 1, 17]   of direct taxes on property, but, on the contrary, recognized the fact that taxation on income was in its nature an excise entitled to be enforced as such"

Stanton v. Baltic Mining Co.(1916), 240 U.S. 103:

• "the provisions of the 16th Amendment conferred no new power of taxation, but simply prohibited the previous complete and plenary power of income taxation possessed by Congress from the beginning from being taken out of the category of indirect taxation to which it inherently belonged, and being placed in the category of direct taxation subject to apportionment"

[Gunslingr3]

How about a Constitutional amendment limiting the Fed's revenue as a portion of GDP (as calculated by some reasonably tax-averse third party). This would prevent the shift to some new and potentially more onerous form of wealth confiscation, and would, at the same time, give them an incentive to take a cost-benefit approach to legislation which would affect business development and the health/size of the economy.

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.

[Fiddlstix]

Sign the Petition to Repeal the 16th Amendment

Done

[ancient_geezer]

. 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 Crisis in Democracy

The Honorable James DeMint (R-SC)
United States House of Representatives
THURSDAY, APRIL 5, 2001
12:00 noon

"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.

Milton Friedman as quoted by Northwest Florida Daily News, 10-16-2000:

• "If we're to have an income tax, it's a good thing for everyone to pay at least a nominal amount," he said. "If non-taxpayers become a majority in society, what would restrain them from voting for ever higher taxes on others?"

Walter Williams, World Net Daily, 10-25-2000

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.

[madfly]

Ron Paul ping

[steve50]

Understand your idea but are you really willing to accept government GDP figures and pay percentage based off their numbers? Would just turn into another numbers game, imho

[Demidog]

The Liberty Amendment would repeal the 16th Amendment, which enabled the government to impose an income tax.

Absolutely false.

[verity]

Must be a full moon tonite.

[Still Thinking]

No; remember, I said in my original post that the GDP would be computed by a "reasonably tax-averse third party".

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.

[Action-America]

Although I am a strong supporter of repealing the 16th Amendment and agree with a number of the author's ideas in principle, there are several things in this article that need to be addressed.

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.