Skip to comments.White House Floats Idea of Dropping Income Tax (altogether)
Posted on 02/08/2003 5:56:38 PM PST by Bigun
White House Floats Idea of Dropping Income Tax Overhaul By EDMUND L. ANDREWS
WASHINGTON, Feb. 7 President Bush, having already set off a firestorm over his proposals to cut taxes and revamp retirement accounts, suggested today that the time might be near to drop the income tax as a whole and replace it with some form of consumption tax...
(Excerpt) Read more at nytimes.com ...
You were obviously unaware that all the money that you have spent a lifetime to save and which was taxed as income is already being double taxed.
The change is that you would see the tax. Obviously, this will put downward pressure on taxes.
THEN NO ONE CAN!
Think about it. THis is the time to really grab the bull by the horns. We must really change the fundamental liabilities that the Liberals have chained to our legs.
There are many such problems. The Ninth Circuit Court...it's jurdisction, and it's political bias. The lack of sunset provisions and planning goals - now today all fundamental business procedures...everywhere except in Government.
But of all the changes that can be made... the change that would have the biggest and most direct visible influence on the citizen would be the Income Tax System. Everyone who earns money would be affected. Everyone who works for someone else would see an increase in his and her income. Not a mere $300 or $600 but in terms of 15% or more of their take home income. This would have AMAZING effects on our country.
Sure, it's a gamble. Not so much political as economic. A different kind of tax method must be in its place. But I guarantee you this, now is the time to change the Income Tax System. We only have a small window of opportunity. Soon the Democrats may retake the house and they will spend like Amelia Marcos...
Then blame us.
In short. End it! End Personal Income Taxiation. I don't care at all how it is changed. Just get rid of manditory withholding and income taxiation. Please.
That's a valid observation. But not a reason to not get rid of one of the most intrusive, abusive, and unjust tax systems that has ever been devised. Ths system, as it is, is in trouble and it needs to be reigned in now or we will have a nightmare in the not to distant future. Higher taxes, identity surveilance to prevent unaccounted income, outlawing of cash transactions above a small amount, outrageous loopholes for the influential that make the current system seem fair, resculpturing of our social and cultural system by tax deductions and credits carried to the extent that you will conform to the wishes of the ruling class or live on the streets. Just a few of my predicitions. These are already instituted to some extent, they will become opressive soon.
I have advocated NSRT for about 30 years (before the NSRT was called the NSRT). I've gone from being considered a radical moron for this stance to hearing the President of the United States advocate it. It's an idea whose time is coming. There will be those, like you parents perhaps, who will suffer some bit of injustice, but overall it will be better for all. Those with savings will benefit by having untaxed interest, and probable lower prices for the things they consume. Remember that I am advocating the replacement of all federal taxes on the people and businesses, including SS, income, comp, FICA, etc. We are all paying these taxes now in a hidden way because of the cost of goods that includes them. We would all still be paying them in the future, but we would only pay once, not on every level of production. Commerce would boom for us as we bacame more competitive in world markets by not exporting hidden tax costs along with our goods.
And the teasing continues anyway. ;-)
ONE bite at a time!
That's the main reason I'm apprehensive about this whole NRST idea. If we were starting a new government, and were discussing what would be better, NRST or income tax, NRST would win with me hands down. But the problem is is that we already have an income tax. Throwing another type of tax into the mix, even if you have the full intention of completely replacing the current system (i.e, eating the elephant whole), will more likely result in a hybrid system, which will be worse than what we have now.
Yes, I know you all say that your proposal would completely eliminate the income tax, destroy all IRS records, burn their buildings to the ground and have the NRC declare them contaminated waste sites, etc., etc. But I hardly think it realistic to expect that once you start the debate, you're going to be able to control the direction it'll move in. Call me overly cautious, but flattening the income tax, while not a perfect solution, would drastically improve the current situation, without creating what in my judgment is a highly unnecessary risk.
I agree they are drowning in paperwork but there wouldn't be any other way to collect it. Certainly couldn't rely on an honor type code so it would have to be collected at the point of sale. There would be some elimination of paperwork on the business side as you wouldn't have to deal with withholding although the FICA part would still be there.
I prefer just a flat tax but like you said, ANYTHING is better than what we have now.
1) A "pure" retail sales tax becomes a VAT eventually, for reasons I outlined in a previous post.
The reasoning you previously posted was invalid both in example(i.e. EU taxes as I have pointed out) and in fundumentals, as we already have the VAT like taxes to contend with now. The NRST corrects that situation by providing a fully visible alternative.
Just because American's in the future may allow government to possibly return to a VAT or VAT equivelant situation is not a valid reason to not enact the NRST now for ourselves. You offer only an excuse for inaction and retaining the status quo, and that is an insufficient argument.
(2) A VAT is an invisible and insidious tax. Just like gas taxes, you do not know how much of the cost of a product you purchase consists of taxes.
No argument and that is why we need to do away with like taxes now.
The Government will tax the manufacturers' or the shippers' "added value," which is opaque and obscure.
The "Government" is us. If we allow them to sometime in the future, how is that an argument for not instituting an NRST today to achieve what we can? The "Government" can do alot of things as long as we let them or encourage them, thats up to us and the kind of representation we choose to put in place now isn't it.
(3) The point is, we just like we don't know what the tax on gasoline is, we won't know the VAT tax rate.
That describes now. Not the situation under an NRST.
Taxes will sneak up on us in the dead of the night, and we'll wake up with a Euro style social state.
"Eternal Vigilence" and exercising or responsibilities as citizens is the key to that. That still is not a reason to not implement a fully visible NRST now.
100% of your money is already double taxed... at income and at spending of ANY type.
Under the nrst, the income level taxation is eliminated, but the spending level stays.
But only certain spending is taxed. EG if you buy a home that has already been lived in. Further, if you want to give some of your money away there'd be no tax. If you want to leave some money to heirs, there'd be no tax.
In fact, if you were an astute investor, you would already know that you have to pay taxes anytime you spend your savings. However, under the nrst, that tax is lessened.
A "little"? HAHAHAHA
BTW your double taxation objection is not valid.
I am poor and I am elderly.
I get less than the poverty level of $8590 a year from SS.
The $165 prebate a month would really help me.
You're easily spotted.
Currently, we enjoy ZERO protection against being saddled with both an income tax and a sales tax. It's already legal. It could be implemented overnight.
After passage of HR25, there would be obstacles to having both... obstacles which do not currently exist. Hence, if you fear having both taxes, you do not oppose the nrst on the grounds you state. As I said, you're easily spotted.
1) eliminates withholding
2) defunds the IRS
3) destroys all existing income tax records, save those delinquent
4) erases the entire income tax code from law.
Now, FreedomCalls, there may be a politician that proposes that we re-implement withholding, and there may even be a few pols that will go along with him/her... unless they want to keep their job.
Who would stand up and say, "let's spend 2 billion on an IRS again"? Hmmmmm....
With all existing income tax records destroyed, how could income taxes be re-implemented? We'd volunteer our information? lol.
Employers would have to start withholding again. Yeah, they'd be up for that...not.
And who will write the new income tax laws (the old ones are gone, remember?)? Who will vote for the income tax to be reimplemented... certainly not anyone who wants to be re-elected.
All those things will be obstacles to overcome once the nrst is passed. We currently have NO obstacles in the way of having both taxes.
Regardless, it is fundamentally immoral to tax income. Look into HJR 45. It's an amendment that repeals the 16th AND makes the taxation of any kind of income unconstitutional.
But you knew all this, didn't you?
To say nothing of H&R Block.
Prices of taxable goods won't change. Spend ten minutes at fairtax.org or salestax.org.
FWIW, HRBLockhead supports this measure.
The Federal government could return to assessment of the states as its primary form of revenue.
The System you talk about was what existed under the Articles of Confederation with the Continental Congess. It was done away with by the ratification of the Constitution, that being one of the primary reasons for the Constitution.
- The principle of regulating the contributions of the States to the common treasury by QUOTAS is another fundamental error in the Confederation. Its repugnancy to an adequate supply of the national exigencies has been already pointed out, and has sufficiently appeared from the trial which has been made of it.
- It is a signal advantage of taxes on articles of consumption, that they contain in their own nature a security against excess. They prescribe their own limit; which cannot be exceeded without defeating the end proposed, that is, an extension of the revenue. ... Impositions of this kind usually fall under the denomination of indirect taxes, and must for a long time constitute the chief part of the revenue raised in this country.
Those of the direct kind, which principally relate to land and buildings, may admit of a rule of apportionment. Either the value of land, or the number of the people, may serve as a standard.
- "The difference between a federal and national government, as it relates to the OPERATION OF THE GOVERNMENT, is supposed to consist in this, that in the former the powers operate on the political bodies composing the Confederacy, in their political capacities; in the latter, on the individual citizens composing the nation, in their individual capacities. On trying the Constitution by this criterion, it falls under the NATIONAL, not the FEDERAL character;"
- "The change relating to taxation may be regarded as the most important; and yet the present [Continental] sic Congress have as complete authority to REQUIRE of the States indefinite supplies of money for the common defense and general welfare, as the future [Constitutional] Congress will have to require them of individual citizens;
Wouldn't happen your way because Article I Section 8 provides for the levy of excises, tariffs, and duties without apportionment.
Secondly Article I Section 9, to which you allude, is for the imposition of Federal property and capitation taxes and does not in any way force the federal government to make an assessment of the states. The original direct taxes under the Constitution, allowed for the states to be collectors of property taxes for the Federal government, however the Federal government created its own assessors and administration authority requiring the states to abide by the Federal government's assessment of the value of private property for purposes of that tax, as well as reserving the Federal government's authority to come in and collect property taxes directly from the land owners whenever a state failed in its duty to the federal government.
I refer you to one of the first acts of Congress implementing the administrative infrastructure for Federal direct taxes:
Now if that's the kind of tax you like, You are more than welcome to it. Seems to me that even the income tax with all of it's faults is less oppressive on the individual.
Personally I would much rather see a National Retail Sales tax, administered by the states as called for in Linder's bill.
What FreedomCalls means is that he's concerned that it isn't fair that someone who has done the right thing to save for retirement would have to pay extra just because of changing to an NRST.
It's a common concern. But you're already being double taxed on your spending today. Indeed, every single thing you buy has 20-30% invisible tax in it. In today's world, you're taxed when you earn it and taxed when you spend it on ANYTHING - even the necessities of life.
Under the nrst, only certain spending is taxed - income is never taxed. Under the nrst, there is no gift tax. Under the nrst, there is no death tax. Under the nrst, seniors do NOT have to pay anything more than they were going to pay anyway - and seniors do not have gift or estate tax.
If a purchase is made in order to produce something else, it's not a retail sale. Only retail sales to the end consumer are taxed, not purchases made along the production line.
what about paying for college tuition?
Not taxed. It's an investment.
Buying medical insurance?
Paying a doctor bill?
Yes, the nrst has zero net tax on necessities.
That'd be really great. I always buy used cars and it burns me that each time they get sold, there is a tax on them. I guess we wouldn't lose the state tax on them but it's nice to know the US wouldn't tax things over and over and over.
We have too much consumer debt so this would help people save instead of spend. Besides if manufacturing jobs are all in China, sales isn't helping our economy very much any more. It doesn't lead to new manufacturing jobs.
Actually, we do not have to repeal the 16th first. The legislation handles the "If we don't repeal the 16th first, we'll get both taxes" argument by abolishing the IRS and defunding it 2 years after the NRST is in place and requiring a 2/3 vote of both Houses of Congress to raise the tax rate or change the tax base.
HST, Rep. Sam Johnson (R-TX) has introduced legislation to repeal the 16th, and both NRST bills call for repeal of the 16th.
I should hope they'll slash all the many welfare programs at the same time ---otherwise I wonder how we could afford to do this. I think they could easily streamline all the many welfare programs ---put SSI, TANF, Medicaid, WIC, HUD, food stamps, CHIPS, HeadStart and all the many others in one agency --it would reduce duplication of paperwork because it's all just the same people applying for all the programs. And then eliminate all the double and triple dipping the welfare classes do ---they never give up their food stamps when they take WIC or put their kids into free government babysitting (Head Start) which also gives them free breakfasts and lunches. They need to cut all that out.
You REALLY think so? Even if the law required a detailed receipt, showing the disposition of all taxes collected, be rendered with EVERY purchase? Our bill has just that requirement and I DOUBT that taxes would continue to rise or that government would continue to grow with that in place!
You're right, BIGUN. An illustration of the downward pressure on taxes when folks know what they pay is on this very thread. When they find out how much their savings is being taxed when they spend it, they freak. That's a perfect illustration of what happens when folks see what they pay, as HR25 requires.
This is just as brain-dead as Dubya's hoopla over a "hydrogen economy" which ignores that hydrogen must be manufactured using some other source of energy, requiring more energy to make the hydrogen than what would be obtained when using the hydrogen.
The numskull ignores that income taxes can be either "progressive" or "regressive", and that the truly fair form of the income tax is the "flat tax". Instead, he opts for a consumption tax, a sales tax, which is ALWAYS 100% totally regressive and oppressive of those at the lowest end of the economic ladder who must spend the largest proportion of their earnings on the necessities of life.
Of course, NRST advocates claim they make the system "fair" with rebates. Yeah, right: cradle to grave rebates from the Social Security System. More Big Government Welfare. This is NOT a conservative proposal.
The NRST is NWO global fascism at its worst. Its end result is a two-tiered stratification of our socio-economic structure: the MIDDLE CLASS gets wiped out. What is left is essentially a 21st Century eco-feudal system where the propertied aristocrats are encouraged to invest and expand their income-generating property holdings tax-free, while the serfs are burdened with a heinous consumption tax to support the welfare redistribution scheme.
This is worse than anything Klintoon and Algore ever proposed.
Just spend 5 minutes and look at the bill. The definition is easy.
If a NRST is going to exempt any purchase of any goods or services which the buyer uses in producing something else for resale, the rate is going to have to be sky-high.
I think the taxes we already pay are sky high. That being said, this is a replacement tax system. It is against the law to implement a new tax system that is not revenue neutral the first year.
However, as can be seen in numerous posts on this and other threads, the method of collection has a major impact on FUTURE years' spending. Specifically, when folks see and feel their tax burden every time they make a purchase there will be downward pressure on taxes. When folks have to actually pull green money cash out of their pocket to feed the beast, there WILL be downward pressure on taxes.
No, that's wrong.
Older people with IRAs, savings, etc. are ALREADY getting shafted with double taxation. The current system taxes income and spending. The nrst only taxes spending.
Older people will be no worse off - indeed they will be exactly as they expected... BUT there will be no tax on any income they may earn, nor will there be a gift tax, nor will there be an estate tax.
Further, seniors currently pay the hidden spending tax on EVERYTHING they buy. The nrst has a zero rate on necessities. The nrst doesn't tax used items (cars, homes, etc).
So you're wrong to assert that the nrst would make seniors worse off.