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Among other criticisms which might be offered concerning the National Sales Tax, two in particular stand out as particularly damaging:
1. It won't work; and far more important,
2. It is Unconstitutional.
1. IT WON'T WORK
The National Sales Tax: Cooking the Numbers
Excerpted from Robert S. McIntyre, New York Times, Jan. 25, 1998
Earlier this month, the well-financed group Americans for Fair Taxation, based in Texas, kicked off a sales-tax campaign with a full-page advertisement in several large newspapers. It called for replacing all the main Federal taxes--personal and corporate income taxes, payroll taxes and the estate tax--with a 23 percent national retail sales tax.
According to the group, such a plan would raise exactly as much money as current laws do, while cutting taxes for just about everyone. The group's plan has been implicitly endorsed by Representative Bill Archer, a Republican from Texas, the chairman of the tax-writing House Ways and Means Committee and a longtime sales-tax fan and income-tax hater.
I was curious about how the group did its arithmetic, so I checked out its Web site--www.fairtax.org--and sent a note to the E-mail address to get further information about the group's calculations.
According to the group's figures, at 1995 levels a new sales tax would have to raise $1.36 trillion to replace all Federal income taxes, payroll taxes and estate and gift taxes. Under its plan, the group says, taxable spending would be $4.6 trillion (after accounting for rebates to partly protect lower-income families).So, $1.36 trillion divided by $4.6 trillion would be the required sales tax rate. Fine, except that $1.36 trillion divided by $4.6 trillion is not 23 percent. It's about 30 percent.
It turns out that the group's purported 23 percent tax rate is misleading and hypothetical. It came up with that number by dividing the sales tax by the cost of a purchase plus the tax. So if the tax on a $100 purchase is $30, the group prefers to call it a 23 percent "tax inclusive rate" ($30 divided by $130). Ever hear of computing a sales tax like that?
(Ahh, I see. Tax a $1.00 product up to $1.30, and the .30 tax is only 23% of the resulting $1.30 total.... although, the consumer is, er, paying 30% more)
The fact that the group's sales tax, even by its own figures, entails a 30 percent tax rate is only the beginning of the math problems. The group's backup materials also assert that almost a third of its projected sales-tax revenue is supposed to come from taxes the Government will pay to itself. Build a road, pay yourself a tax. Buy some planes for the Air Force, pay yourself some more. And so on.
Unfortunately, that shell game won't work. Without these phantom governmental tax payments, the sales tax rate would have to jump to 42 percent to break even.
(Hmm, that's right. Our current gargantuan Federal Government transacts 20 to 25% percent of the aggregate purchasing done in the GDP. And since the Government doesn't pay sales tax on purchases that it is funding by sales tax revenues, all that aggregate purchasing is getting paid for by the remaining 75 to 80% Private Economy... raising the sales tax into the 42% range.
Now, I wonder, if the government is paying - with private sales taxes - $1.00 for goods and services that private individuals have to spend $1.42 [with sales tax] for... would that finance cheap growth of the Government sector at the expense of the Private Sector? Hmmm....)
A bit more digging reveals that a quarter of the remaining sales taxes are supposed to be paid on things like church services, free care at veterans hospitals and a variety of hard-to-tax financial services like free checking accounts. If we discount the taxes on these items, the sales tax rate would have to climb to an astronomical 56 percent to break even.
(my, from a stifling 42% up to a strangling 56%. Well, I guess you could tax churches... and veteran's hospitals... who cares if they served their country?)
Apparently, the millions of dollars that Americans for Fair Taxation says it has spent on focus groups and polling have taught it an important lesson: giving people the real facts about a national sales tax is politically disastrous for its proponents. So the group is trying the only other available route: cooking the numbers.
(Well, as long as you tax the transactions of currently untaxed areas... like religious services and veterans hospitals and so on... then the "revenue-neutral" sales tax is only 42%! I'm sure that a Private Sector paying $1.42 for goods and services that the Government can purchase for $1.00 won't grow Government, at the Private Sector's expense, whatsoever.
And this by the "Fair Tax" Group's own numbers, at that. My.)
2.IT IS UNCONSTITUTIONAL
Not an Excise
Not a Duty
Not an Impost
Not a Direct Tax Apportioned proportional to the Census
The Constitution of these United States
from Section VIII --- The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;
from Section IX --- No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken.
Excise --- Funk & Wagnalls online: "tax imposed on the domestic manufacture, sale, or consumption of specific commodities, or on licenses to pursue certain occupations and exercise certain corporate privileges. Excises are fixed, absolute charges, usually levied for the purpose of raising revenue, and are, in effect, indirect consumption taxes."
Duty --- Webster's Revised Unabridged Dictionary online: "A government tax on imports or exports."
Impost --- Webster's Revised Unabridged Dictionary online: "That which is imposed or levied; a tax, tribute, or duty; especially, a duty or tax laid by government on goods imported into a country."
Proportion --- Webster's Revised Unabridged Dictionary online: "...3. To divide into equal or just shares; to apportion."
The National Sales Tax is not an Excise. It is not a specific, fixed, absolute charge on a particular commodity. It is a general, percentage-based and therefore variable (based on variable market price) Tax which is charged universally on all transactions, commodities or services.
The National Sales Tax is not a Duty or Impost. It is not a tax solely levied on imports or exports.
The National Sales Tax is not a Direct Tax proportional to the actual census of the population of the Several States. It is a Direct Tax which is proportional to consumption - which can vary a great deal from State population to State population.
More Tax Reform: National Sales Tax vs. Income Tax
Free Enterprise Society, editorial, July 1996
"Since the Republicans have taken over the House of Representatives one of the major political issues has been tax reform. “I think the federal income tax, in its current form, is gone,” Newt Gingrich explained in a radio broadcast. Gingrich further explained that proposals to replace the federal income tax with a flat tax or a consumption tax are looming which would “literally eliminate the federal income tax so the IRS will have nothing to say or do about your personal life.” But not all are in agreement. While Senator Nunn agreed that tax change is a future major issue, he doesn’t desire a flat tax rate. He explained that he will promote his own tax reform package, which would make personal savings and corporate investments tax deductible. Nunn explained that, “What I worry about is a flat tax not lasting. You do away with all the exemptions, you make a flat tax and then three years later you get a rate increase — a big rate increase. So I would prefer to see ours, but the flat tax will be very much debated in the next six or eight months.”
Okay folks, listen up. The flat tax is nothing more than an income tax in disguise, so that type of tax will change very little.
But lets take the National Sales Tax advocates as their philosophies are not only disturbing, but as well, contrary to what the “Freedom Movement” is attempting to achieve, i.e., limited constitutional government. There are several important points about the National Sales Tax which no one seems to want to discuss...
First, it is not needed. Again, we don’t need a tax to replace the income tax.
Second, there is no constitutional authority for this tax. Can somebody please show me where in the constitution the government has been given the authority to come into the state and tax sales transactions between state citizens and state businesses? Interstate commerce is necessary to trigger federal authority.
Third, a national sales tax would serve to impose another unfunded federal mandate upon the states as the federal government would want the state to collect the tax and forward it to the federal government through their taxing agents.
Fourth, and more importantly, a national sales tax, regardless of how you wish to frame it, would serve to regulate commerce between a man and a man in a state, which does not extend to or affect other states. This would be an absolute violation of the commerce power. See Justice Thomas’ concurring opinion in United States v. Lopez.
Fifth, the theory that the national sales tax would replace the income tax is unfounded.
Oh, the government may suspend the income tax for a while, or water it down, but it will be back. You see, the sales tax advocates have the mistaken belief that the income tax is solely for revenue collection, when revenue collection is the least of its concerns. It is axiomatic that if the income tax system goes, the money system has to go. There may be an alternative, and that is make the national sales tax as oppressive as the income tax so the excess spending wealth, i.e, inflation is drawn off the market as it is created.
Folks, the theory that we replace the income tax, with another un-needed tax, which the government has no power to levy, is like asking a dictator to shoot you in the head with a steel-jacketed bullet, rather than with a hollow point.
And, the theory that we can rid ourselves of the income tax by convincing the people that a national sales tax is better and worry about eliminating the national sales tax later is the epitome of naivete.
I think it is time for everybody to read “The Prince” written by Machiavelli. The government is throwing red herrings at us with this tax reform ploy. There will be no reform, just more new and improved ways of collecting taxes. In short, as long as the government thinks it has the power to levy an income tax, we will have one, regardless of the form it takes. That is one thing Nunn and Gingrich agree on, i.e., some type of income tax.
Think of the national sales tax as a tax in addition to the income tax, not in replacement thereof, and please, read “The Prince” so you understand what your government is really doing to you. A national sales tax would not have constitutional sanction, regardless if it could feasibly replace the income tax.
Why, then, would we the people want our government to levy an unconstitutional tax? To replace one that has been declared constitutional over and over again? Why would we encourage our government to continue to usurp the power granted to it? Why would we encourage our government to commit a wrong to fix a wrong?
The main reason given by the sales tax advocates is that the people won’t accept an abolition of the income tax without a replacement. That may be true now but not in the future. Good things take time and truth will prevail as long as we keep expounding the truth, not another lie. People will and DO understand the need to abolish the income tax when informed of the true nature of the beast. It is time to stop this nonsense about convincing the majority of people to accept an alternative tax system to the income tax system. To do otherwise is to promote injustice, and there is not, nor can there be, any excuse for that type of conduct.
Also, I would remind you that when you encourage conduct by your government which is wrong, you shall reap what you sow.
Think about it. Think about it real hard."
Just Say No To The National Sales Tax
Free Enterprise Society, editorial, June 1999
"This issue needs to be re-visited again as too many patriots are jumping on this government sanctioned bandwagon. As well, a great concern has arisen among us at Free Enterprise Society as it appears many in the patriot movement have adopted a conciliatory posture and chosen to accept anything tossed at them by the government just to temporarily do away with the income tax. And worse, they appear not to be concerned that two wrongs do not make a right.
What happened to the fight to eliminate the income tax by exposing the fraud and deception of this tax? What happened to the proposition of restoration of constitutional government and taxation? How did the fight degenerate to replacing the income tax, a complete fraud, with an unconstitutional National Sales Tax? Has anyone considered the fact that the Freedom Movement, at least when I discovered it, was against confiscatory taxation, was for limited constitutional government, and decried government lawlessness? There is no argument which can justify replacement of the income tax with any type of alternative tax.
If it were conceded that a National Sales Tax had constitutional sanction, which it is not, that is not the solution to eliminating the income tax and the restoration of constitutional government. Currently the government, and I mean each and every branch, refuses to recognize the fact, and it is a fact, that the 16th Amendment was not ratified. All the government has to do to eliminate the income tax, is admit the 16th Amendment was not ratified. This isn’t hard - in fact it is a no-brainer. The problem of course, is that the government intends to keep the income tax if we let them.
Just because the federal government replaces the income tax with a sales tax, what makes anyone think the States would do the same thing? Consider this, most of the States already have an income tax and a sales tax so there would be no reason for the states to dump their income tax laws. And, take notice of one small fact folks - if the people will tolerate both a sales tax and income tax on the state level as they already do, why wouldn’t they tolerate the same at the federal level? Let’s face it, that is exactly what we are being set up for, and more amazingly, they are getting our help. Talk about cutting our own throats!
Further, if the temporary replacement, (and I mean temporary) of the income tax is the end of the race we are running, perhaps one could justify an argument for the National Sales Tax. However, it is not. Our race ends only after we have eliminated the income tax by exposing it’s fraud and deception and restoring constitutional government. Why have we forgotten this?
But, if the patriots sell replacement of the income tax to Joe-Six-Pack as the race we are running, to gain Joe’s participation in the movement, and it happens, Joe will stop at that point, because Joe will believe that the race is over.
More importantly, if a National Sales Tax is adopted, it leaves the promoters of the National Sales Tax right back where they were in the beginning, i.e., fighting confiscatory taxation and a federal government run amok.
Anyway, the National Sales Tax will not be paid by everyone, as, if it is oppressive, a black market like nothing the government has ever seen will explode on to the scene. The theory that everyone will pay their fair share, is not well-taken. And, if a black market becomes huge, the government will need the IRS to enforce collection of its sales tax. As for returns, you better believe there will be tax returns filed by someone as that is the only way to account for the total taxes collected by a business. Is it really to be expected that our good and great government will just accept a business’ representations as to how much tax it collected on sales transactions?
Those promoting a National Sales Tax boldly proclaim that the tax is constitutional, and could be constitutionally administered, but they wholly fail to explain how. Now maybe it’s just me, but unless the National Sales Tax is going to operate as an excise tax on products, and not sales transactions, I can’t find any constitutional authority for it. (Side note --- excises are specific. That is their meaning. That is their intent. Anyone want an Excise system that lists for excise every single type of product in the Economy? Oh, don't forget that you have to shylock the Supreme Court into believing that excises apply to Services, which they don't.) If this type of tax did not have constitutional problems don’t you think the government would have implemented it long ago? After all, which of its taxing powers hasn’t it already abused?
The National Sales Tax is a classic example of how the people keep giving, and the government keeps taking.
SUMMARY
1. The patriots are winning this war today. This is evidenced by the fact that congress is now seriously looking at replacing this so called tax. The reason is simple: over 30 million people have stopped filing returns, by the IRS’s own spokesman. The income tax is now falling apart. Victory is at hand if we keep our end goal clear. NO INCOME TAX! NO UNCONSTITUTIONAL TAXES! NO REPLACEMENTS!
2. The government is looking now to protect their retirements and other perks that the income tax has illegally provided them all these years. Let’s face it, this has been the corrupt politicians’ cash cow. And what magically appears? A replacement for the income tax that Congress now says has to go. (Give me a break.)
3. As long as the government believes they have the power to implement an income tax, we will ALWAYS have one. With, or without, a so-called replacement. We must continue to teach how this so-called tax uses deception and fraud to take the peoples’ money and get rid of it once and for all, by exposing that there is no constitutional authority to implement such a tax. NOT THEN! NOT NOW!
4. Don’t let those who have been stealing from us, off the hook. By supporting a replacement it looks as if the income tax is legal. And worse, it will make heroes of the very legislators who help bring in a new unconstitutional alternative tax.
5. FULL SPEED AHEAD! GIVE ME LIBERTY OR GIVE ME DEATH."
When my favored candidate, Steve Forbes, said recently that he would be willing to sign a National Sales Tax Bill if one made it to his desk, I was interested to see his willingness to look at another candidate's idea.
But I'm now hoping that a National Sales Tax bill never makes it to any President's desk.
The National Sales Tax is cooked numbers and an affront to the Constitution.
As mentioned above, the National Sales Tax is not an Excise. It is not a specific, fixed, absolute charge on a particular commodity. It is a general, percentage-based and therefore variable (based on variable market price) Tax which is charged universally on all transactions, commodities or services.
The National Sales Tax is not a Duty or Impost. It is not a tax solely levied on imports or exports.
The National Sales Tax is not a Direct Tax proportional to the actual census of the population of the Several States. It is a not Direct Tax which is proportional to consumption - which can vary a great deal from State population to State Population.
The National Sales Tax is not an Excise. It is not a Duty or Impost. It is not a Direct Tax apportioned in proportion to the Actual Enumeration of the populations of the Several States.
It is not a Constitutional Tax.
It is, however, an "absolute violation" of the Commerce Clause, by Unconstitutionally introducing the Taxing Power of the Federal Government into the transactions of one man with another, internally transacting commerce within the boundaries of the Sovereign State.
If any President signs such a National Sales Tax, apparently they'll have to take that issue up with Justice Clarence Thomas.
If you want to return to Constitutional Government, bait-and-switching into an UnConstitutional National Sales Tax is fallacy.
There is one solution.
One.
Cut spending Cut spending Cut spending Cut spending Cut spending Cut spending Cut spending Cut spending Cut spending Cut spending Cut spending Cut spending Cut spending Cut spending Cut spending Cut spending Cut spending Cut spending Cut spending Cut spending Cut spending Cut spending Cut spending Cut spending Cut spending Cut spending Cut spending Cut spending Cut spending Cut spending.
Cut Government spending to the Bone. And Go back to Excises, Tariffs, Imposts, And Direct Taxes Proportional to actual Enumeration.
No Unconstitutional Sales Tax - Tax Grabs to give the Government yet more.
The NRST is just another Washington based scam.
---max
This from the same guy who has said Reagonimics,supply side economics and any tax reduction plan now in discussion is there only to benefit the rich...give me a break....go do some research on this group that he represents and his buddies like Gephardt et al.
CUT SPENDING!
That was some article Uriel1975. My Mother would approve, as she often remarked, numbers don't lie, but liars can figure.
CUT SPENDING!!
The Chief Negotiator and his NST team are going to have a busy day.
CUT SPENDING!!!
I'll check back later today and see how you're fairing.
CUT SPENDING!!!!
Go Steve Go!!
I'm glad to know that sales taxes are unconstitutional!!
Even if what you provided in part 1 of your message were true, all it proves is that's what people are paying now. It may be an argument against high taxes in general, but it isn't an argument against sales tax as a replacement for other taxes.
--The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;--
In your discussion of this, you left something out. Take a look at the first word in the list: "Taxes." You discussed duties, imposts, and excises, but you left out "taxes." Did you have some reason for omitting that word from consideration, or did you just overlook it?
--The National Sales Tax is not a Direct Tax proportional to the actual census of the population of the Several States. It is a Direct Tax ...--
That's wrong. A sales tax is not a "direct tax." It's an indirect tax.
--Okay folks, listen up. The flat tax is nothing more than an income tax in disguise, ...--
No, it isn't "in disguise," it's openly a flat income tax. Nobody has said any different.
--But lets take the National Sales Tax advocates as their philosophies are not only disturbing, but as well, contrary to what the “Freedom Movement” is attempting to achieve, i.e., limited constitutional government. ...--
That's wrong, of course. A primary motivation for the switch from income to sales tax is to get the IRS out of people's personal lives. That would be a major step toward greater freedom in the U.S.
--First, it is not needed. Again, we don’t need a tax to replace the income tax.--
Prove it. An empty assertion is not enough. Take what you consider to be the necessary functions of U.S. government, and show how to finance those functions without either an income or sales tax.
--Interstate commerce is necessary to trigger federal authority.--
Not in the matter of taxation.
--Third, a national sales tax would serve to impose another unfunded federal mandate ...--
Not true. The "mandate" is funded.
--Fourth, and more importantly, a national sales tax, regardless of how you wish to frame it, would serve to regulate commerce between a man and a man in a state, which does not extend to or affect other states. This would be an absolute violation of the commerce power. See Justice Thomas’ concurring opinion in United States v. Lopez.--
Again, no, the U.S.'s tax power and commerce power are separate; it is not the case that U.S. tax power derives in any way from the power to regulate commerce among the states. You have confused two completely different issues.
--Fifth, the theory that the national sales tax would replace the income tax is unfounded.--
Prove it. The proposed legislation does, in fact, require that by law.
--Think of the national sales tax as a tax in addition to the income tax, ...--
In point of fact, the proposal being discussed, under the Fair Tax and other plans, is for end of the U.S. income tax and its replacement with sales tax. It is sheer fabrication, and outright falsification, of what's been proposed to presume sales tax as an "addition." That is not actually what people are talking about.
--It is time to stop this nonsense about convincing the majority of people to accept an alternative tax system to the income tax system. To do otherwise is to promote injustice, and there is not, nor can there be, any excuse for that type of conduct.--
All you're accomplishing, is to argue for keeping the income tax.
--What happened to the fight to eliminate the income tax by exposing the fraud and deception of this tax?--
Go right ahead. The sales tax proposals are not stopping anybody from seeking abolition of the income tax with no replacement for it. That's a separate issue, and those who believe that should pursue it vigorously. If you think you can achieve that, go for it. But it's dishonest to portray sales tax advocates as obstacles to income tax abolition when, in fact, sales tax advocates have produced actual legislative proposals which would, indeed, abolish the U.S. income tax.
--If it were conceded that a National Sales Tax ... is not the solution to eliminating the income tax ...--
It most certainly is. The proposed legislation does exactly that.
--All the government has to do to eliminate the income tax, is admit the16th Amendment was not ratified.--
Okay, go right ahead and persuade the government to admit that. Nobody is stopping you. But don't hold your breath waiting for government officials to do so.
--Just because the federal government replaces the income tax with a sales tax, what makes anyone think the States would do the same thing?--
Whether the states do the same or not, you'll still be rid of the U.S. income tax. Count your blessings.
--Anyway, the National Sales Tax will not be paid by everyone, as, if it is oppressive, a black market like nothing the government has ever seen will explode on to the scene.--
What makes you think so? In fact, the Fair Tax proposal is designed to be revenue-neutral, so the general tax liability would remain exactly the same. With no increase in tax liability, there would be no increase in motivation to evade.
--The theory that everyone will pay their fair share, is not well-taken.--
It isn't a "theory" it's a fact, at least with regard to the Fair Tax. The Fair Tax is a single-rate system: all buyers of taxable items pay the same rate. There is no class preference.
--As for returns, you better believe there will be tax returns filed by someone ...--
There won't be any personal income tax returns. Because there won't be any personal income tax.
--The National Sales Tax is a classic example of how the people keep giving, and the government keeps taking.--
Except, under sales tax the government only takes your money. Under income tax they pry into your personal finances and take both your money and your freedom.
--2. The government is looking now to protect their retirements and other perks that the income tax has illegally provided them all these years. Let’s face it, this has been the corrupt politicians’ cash cow. And what magically appears? A replacement for the income tax that Congress now says has to go.--
That's an interesting conspiracy theory you've come up with. Paging Oliver Stone......
--4. Don’t let those who have been stealing from us, off the hook. By supporting a replacement it looks as if the income tax is legal. ...--
Hardly. Legality of the income tax was established by the 16th Amendment, and stands on its own. The idea that proposing a replacement for the income tax somehow upholds the legitimacy of the income tax, is just silly. In fact, a major motivation for supporting sales tax as a replacement for the income tax, is that the income tax is both morally and economically dubious.
Thanks Uriel1976 for posting the arguments against a NRST. Keep it up! The more we learn about the opposition's arguments now, the better we can promote the NRST in the days ahead.
And, Red Redwine, thanks to you for your excellent counter-arguments! Well done.
Whether the NRST proposed by AFT is 23% or 30%, depending on how you choose to describe it, does not change my desire to end the IRS Income Tax based system. The numbers still work out. Yes, I want the NRST by AFT and I also want, as a separate issue, less government which would result in a reduced NRST in the future.
I believe AFT may have made a 'political marketing mistake' if they are protraying the tax as 23% when most assume that it is calculated on the basis we normally expect. Opponents will argue that AFT has been misleading and cannot be trusted.
Let us hear from the folks at Americans For Fair Taxation...
Chief... I sent an e-mail to Phyllis with a link to this post.
Regards,
The whole reason behind the National Sales Tax is that it is one of the few taxes that the individual can control. If I don't want to pay the 23% tax, I will grow a garden for food and cut back on consumption. Make my own clothes. Ride a bike. Etc. The current slave tax is almost outside the individual's control. I'd rather have the freedom to choose.
IMHO, the real danger of the National Sales Tax is that it will be touted as a replacement for the income tax, but once the sales tax is in place the politicians will never get around to getting rid of income tax and we'll be stuck with both, and taxed even higher than ever. I'm extremely nervous about changing the tax methods with the current crop of politicians we currently have in Washington.
Response to Bob McIntyre, "The 23 Percent Solution?"
The New York Times, January 23, 1998
Once, about every decade, the American taxpayer endures someone's obligatory defense of the income tax as the highest achievement of mankind. Bob McIntyre offers such a misguided defense in his article of January 23, 1998, "The 23 Percent Solution", and goes even further by labeling the fairest, most simple solution possible to the income tax as "kooky".
It would come as a surprise to highly respected researchers and tax experts such as Dr. Dale Jorgenson of Harvard University, Dr. Larry Kotlikoff of Boston University, Dr. Jim Poterba of MIT, that it's a kooky idea. It would also come as a surprise Dr. Wayne Angell, former member of the Board of Governors at the Federal Reserve, who supports the Fair Tax. And in a recent bi-partisan poll of taxpayers - where 64 percent favored the Fair Tax - they didn't find the idea kooky either. Or what about the more than 10,000 individuals a day that are contacting Americans for Fair Taxation for information about The Fair Tax? It's starting to look like everyone's kooky except Mr. McIntyre.
And what about the founding fathers of this country? Perhaps they would have found the current system kooky, with its 7,000 Code sections and 10,000 pages of microscopic gibberish? Would they have thought it strange that we submit to a tax system that is so complicated that its enforcement agency, the IRS, indemnifies itself against its own advice yet assesses nearly 34 million civil penalties a year on American taxpayers? Most probably, and from our perspective and the perspective of many millions of hard working Americans, the current income tax system is not only kooky but corrosive and a parasitic organism, ravenously devouring our society's valuable resources and dramatically weakening the ability of millions of Americans to move up the income scale.
Mr. McIntyre questions the Fair Tax rate by raising the "tax-inclusive rate" issue. If Mr. McIntyre's intent was to be informative, he would not have presented only half the picture…let's look at the whole picture. When considering the rate of a national sales tax, or any tax for that matter, one must choose between two distinct means of measuring the rate: the "tax-inclusive rate" or the "tax-exclusive rate". Which one we employ changes absolutely nothing in terms of the taxes that are actually raised by the government, i.e. paid by the taxpayer. It's like measuring by yards vs. meters…the distance to be measured is the same; only the measuring stick is not the same.
In order to eliminate confusion over the relative tax burden when comparing this new system of taxation against the form of tax it is meant to replace, AFT expresses the sales tax in tax-inclusive terms, which is how the current income tax and the Flat tax are measured. In other words, we have chosen to compare yards to yards, and not yards to meters as Mr. McIntyre has done. If we compare tax-inclusive tax rates of The Fair Tax to the Flat tax and the current income and payroll tax, we find marginal tax rates of 23 percent, 32.2 percent, and 43.3 percent, respectively. If, however, we choose to speak in terms of tax-exclusive rates, then those numbers jump to 29.9 percent for The Fair Tax, 47.5 percent for the Flat tax, and an astonishing 76.3 percent for the income tax and payroll tax…not particularly minor omissions in Mr. McIntyre's analysis!
As for taxation of government spending, "phantom" taxes in Mr. McIntyre's view, again he leaves out crucial details and fails to tell us that the current income tax system already taxes government spending. Government workers are not exempt from income and payroll taxes, they pay them just like private sector workers. Under the current system we could choose to exempt these workers from income and payroll taxes and the government could pay less, but we don't because we want the true cost of government to be reflected in the price of government services. Does the IRS think that the revenues it raises from government employee's payroll checks are "phantom revenues"? In fact, why should the public sector be tax advantaged? Should the government have a competitive edge that it does not afford the private sector?
And what about the inclusion of services in the AFT tax base? Yet more deception on the part of Mr. McIntyre. Service providers are not exempt from the income tax today, and should not be exempt from The Fair Tax. Services now account for well over one-half of the Gross Domestic Product (GDP). It would be unfair and economically foolish to tax only goods. Neither consumption of services nor consumption of goods should be tax preferred. Free enterprise and competition - not politics - should determine the cost of goods and services.
Once again Mr. McIntyre has shown that he is willing to go to great lengths to distort the truth and keep the American people subjected to a federal income and payroll tax system that will continue to limit economic opportunity and living standards, punish work and savings, inhibit the upward mobility of those in the lower half of the income scale, impose vast compliance costs on individual taxpayers and industry, and trample the rights of taxpayers in this great nation. Perhaps Mr. McIntyre's organization would be more appropriately named, "Citizens for Tax Injustice."
A great post, Red Redwine!!! You have completely confuted the nonsensical (and out of date I might add) arguments presented by Uriel1975 who is beginning to look more like some other posters (presently to remain nameless) who have a less-than-stellar records for honesty and integrity.
Seems the poster has a "favorable" dictionary. Other reference works give different definitions of "excise", i.e. - "an internal tax levied on the manufacture, sale, or consumption of a commodity" which CLEARLY covers the NRST as an excise.
BTW, I hope you emailed Taxman (fdavis@nationalsalestax.com) about joining the Cyber-War.
Little Willie is "The Worst President In American History."
"And Direct Taxes Proportional to actual Enumeration."
Uriel, THAT is a head tax. The most evil form of the necessary evils we call taxation. It equates with poll taxes, government imposed "user fees", and other taxes that impose the same dollar amount on each individual head that is enumerated by the census. It means that the poorest family with four kids will be responsible for twice the dollar amount of the richest family with one child. However the governments decide to spread the load, that is the bottom line. People in Martha's Vineyard would be responsible for the same dollar amount per head as people in the poorest congressional district in the U.S. of A. And as many argue, the states could figure out their own way of distributing the pain, but when you get down to the nitty gritty, IMHO this form of taxation is the most likely to cause the peasants to take up their hoes against the government, and anybody else who gets in their line of sight. When the taxman cometh, he wants the "government's" money. Whether a person's kids have food to eat is not "his" problem. Peace and love, George.
GO PAT GO!!!
Right On.... I have yet to find a politician who saw a tax he didn't like, or could bring himself to repeal an existing tax.
The main reason the NRST won't fly is that it is not about money, but about control of the people. With a NRST the government would not need to know who I work for, where I live, or how much I earn. With the income tax, they can keep track of everything.
While I'm in favor of anything that would get rid of the income tax I just don't belive that the powers that be will allow it to happen. After all, It's for the children.......
'There won't be any personal income tax returns. Because there won't be any personal income tax.'
Unless you are one of the many millions of people who are self-employed or offer services such as baby sitting, then you will be required to collect, pay, and file.
Hi, StraightDave! There is one very, very good reason for calling out the FairTax rate as tax-inclusive and that is that income tax rates are actually tax-inclusive and so the two rates are comparable on the same basis in this way.
If opponents are going to demagogue that tax-exclusive is the correct description, then everyone should describe the income tax rates as tax-exclusive which would certainly jump their numbers up dramatically. Since the amount of tax money is the same under either description it seems reasonable to use tax-inclusive so that it can be directly compared to the income tax rates for people to see how much more most of them pay right now.
Many do not realize that they pay more than 15% (a tax-inclusive rate) right now for payroll taxes and that they pay even more than that in "hidden taxes" that we have discussed on these threads. All of that, of course, is in addition to income tax withholding.
Also of note is that there are now four more sponsors or the FairTax - 2 Democrats and 2 Republicans helping to illustrate this is not a partisan polical effort.
BTW, I hope you too have emailed Taxman (fdavis@nationalsalestax.com) aout joining the Cyber-War.
Little Willie is "The Worst President In American History."
'If I don't want to pay the 23% tax, I will grow a garden for food and cut back on consumption. Make my own clothes. Ride a bike. Etc.'
....build a shack in Montana....
Hi there, George Frm G0rky Park. I thought it was "pitchforks" rather than "hoes" that Pat was talking about.
Little Willie is "The Worst President In American History."
Uh, hate to tell you this, but that is exactly how state sales tax works in many states. It's called factoring and prevents charging sales tax on sales tax. It is a sound financial principle. Talk to your CPA.
The thing about a national sales tax is that it would be the fairest of all taxes since it is based entirely upon consumption. It would also keep the tax rate right there in front of EVERYONE. Want a new bleeding heart program? Raise the sales tax, let everyone see exactly what it costs. You would see government waste disappear almost overnight due to irrate citizen participation.
The "... powers that be ..." Glen Russell are US!! The sooner we realize that and act upon it by innundation of Congress (and not just "our" congressman or "our" political party) with DEMANDS that they support the FairTax the sooner we'll get congressional action to free us from direct taxation.
Little Willie is "The Worst President In American History."
It is important to distinguish between tax-inclusive and tax-exclusive rates. The income tax and the flat tax are imposed on a tax-inclusive basis while traditional sales taxes are imposed on a tax-exclusive basis. Let us take as an example someone who earns $100, pays $20 in taxes (whether an income tax, a flat tax, or a sales tax), and spends the remaining $80 on a CD player. Is the tax rate 20 percent or 25 percent? The income tax and the flat tax would be imposed on the $100 and thus the rate is 20 percent (i.e., 20/100 = 20%). The flat tax and income tax base are tax inclusive. Traditional state sales taxes are imposed on the after-tax or tax-exclusive base. Thus, we typically would say that the sales tax rate needed to raise $20 is 25 percent (i.e., 20/80 = 25%). In each case the government is extracting the same resources from the economy. Thus, to compare apples to apples, the sales tax rate that is comparable to the income tax rate or the flat tax rate is the tax-inclusive rate. [33] The 23 percent rate proposed is the tax-inclusive rate.
[33]. When calculating the tax-inclusive sales tax base, two algebraically equivalent methods may be used. The tax-exclusive rate may be converted into a tax-inclusive rate by dividing the tax-exclusive rate by one plus the tax-exclusive rate: ti = te/(1+te). Conversely, a tax-inclusive rate may be converted into a tax-exclusive rate by dividing the tax-inclusive rate by one minus the tax-inclusive rate: te = ti/(1- ti). Alternatively, the tax-inclusive sales tax rate may be calculated by adding the repealed income tax revenue back into the tax base (consumers, after all, would have that money to spend), whereas one would not do so when calculating the tax-exclusive base (consumers would be spending that amount on tax and it would not be appropriate to include it in the calculation of a tax-exclusive base).
But I thought you knew that.
Nicely done, Red Redwine. I am still waiting for someone to convince me that the Fair Tax would not be our best alternative. Everytime I read some poster not in favor of it, it is discovered that the poster does not know the bill (or in a few cases, the poster knows the bill but is a socialist and wants to keep an income tax - flat or grad).
The more questions that are answered by informed posters like yourself, the more educated are the freepers, and the more supporters the Fair Tax finds.
Thanks.
The income tax is effectively destroyed by the FairTax bill. The income portions of the tax code are deleted (and they are considerable), the IRS is de-funded, and the income tax records are required to be destroyed by a specific date. In addition, the legislation calls for the repeal of the 16th Amendment and goes on to say "...and that the repealing amendment should prohibit Federal taxation of incomes, wages, estates, and gifts."
Whereforeart thou income tax???
Probably a more realistic concern, dirtboy, is that Congress could RIGHT NOW lay both taxes upon us at the same time. This is an excellent argument for passing the FairTax - to prevent that very thing.
Little Willie is "The Worst President In American History."
You are oh so right! A fine post!
Little Willie is "The Worst President In American History."
The whole reason behind the National Sales Tax is that it is one of the few taxes that the individual can control. If I don't want to pay the 23% tax, I will grow a garden for food and cut back on consumption. Make my own clothes. Ride a bike. Etc. The current slave tax is almost outside the individual's control. I'd rather have the freedom to choose.
The parrot is up with a profound remark.
This above all is why the tax would fail. When I find I can save that kind of bucks on barter and gardening, I am going to work at it much much harder than I do now. Not to mention all those little towns along the Canadian border without patrols. Look at the Soviet Union and the veggie gardens. The American entrepeneurial spirit will jump at the chance to make a 23% profit. Avoiding taxes is not exactly alien to our culture.
Hello, Cincinatus' Wife. Although I am a supporter of HB2525, the "Fair Tax", I am open-minded on the topic and would like your thoughts; I have not been swayed by any arguments against it. If you could carry a logical discussion with me, I'll do the same. I'd like to learn from you- Why do you not support it? Do you want to keep what we have? Do you know of someting better?
Curious-
Very well said Red! Wonder why Uriel didn't provide a link to this thread from over here? Hmmmm.
Maybe he/she hoped we wouldn't find it.
Neither math, law, nor economics are your forte, so keep your day job....
--Unless you are one of the many millions of people who are self-employed or offer services such as baby sitting, then you will be required to collect, pay, and file.--
I don't follow what you're saying. Did you mean "if" at the beginning, instead of "unless?"
Agreed that those who sell taxable goods and services will be required to collect the tax and remit the amount.
Please don't pick on Always Right. He is not a socialist, but merely someone who pays no income tax at present due to substantial real estate related deductions. He is merely afraid he will have to pay some tax. He hasn't been able to factor into his thinking the 15-plus percent payroll/self-employment tax nor the real economic effects of the FairTax on his own situation such as the reduction in home costs or the reduction in mortgage interest.
He's afraid that the NRST will "kill" the house-selling market (which is quite the opposite of the actual case). The old story of the forest and the trees applies here, but he is no socialist.
Obviously he has no children or grandchildren to be concerned with the effects of direct taxation on their lives nor does he much care about the direct tax effects the people who work for him in providing his tax-free situation. Selfish, yes, socialist, no.
Little Willie is "The Worst President In American History."
"Cut spending Cut spending Cut spending Cut spending Cut spending Cut spending Cut spending Cut spending Cut spending Cut spending Cut spending Cut spending Cut spending Cut spending Cut spending Cut spending Cut spending Cut spending Cut spending Cut spending Cut spending Cut spending Cut spending Cut spending Cut spending Cut spending Cut spending Cut spending Cut spending Cut spending."
If not, why not?
I would love to see the legislation that will reduce gvmnt to the bare bones...(that congress would sign).
How do you legislate SMALL GOVERNMENT but at the ballot box? Isn't that like trying to legislate morality?
Not meaning to pick on anyone! Perhaps I would have been better advised to say something like "those in oppostion to the Fair Tax have been shown to be either uneducated on the bill or an income tax advocate".
It's not an Excise. It's not a Duty or Impost. It's not a Direct Tax proportional to population.
It's not Constitutional, numbers aside.
National Sales taxes are. The Federal Government is nowhere, in the Constitution, empowered to enact one.
All tax is a theft. All tax is a form of slavery. However, if you want some of your freedom (a large chunk) back NOW, we need to repeal the 16th Amendment. They (The voters) won't let you do that without a replacement. I disagree with them, but I fear it is reality. Therefore I would support a national sales tax if it was accommpanied by a repeal of the 16th amendment.
As a step in the right direction only. (sorry for the lack of intellectual purity.)
Fourth, and more importantly, a national sales tax, regardless of how you wish to frame it, would serve to regulate commerce between a man and a man in a state, which does not extend to or affect other states. This would be an absolute violation of the commerce power. See Justice Thomas’ concurring opinion in United States v. Lopez.--
Again, no, the U.S.'s tax power and commerce power are separate; it is not the case that U.S. tax power derives in any way from the power to regulate commerce among the states. You have confused two completely different issues.
Au contraire. The author's point was that the National Sales Tax has the effect of regulating commerce between men intrastate. It taxes consumption in favor of savings or investment. Thus, even if it were admitted that the power to enact the tax derived from the Taxing Power (and it is not, there is nothing so enumerated), it would still represent a violation of the Commerce Clause.
Take it up with Justice Thomas.
Tax avoidance alien to our culture ... certainly not. Look at the situation right now with the income tax. There is avoidance and outright evasion in great quantity (hundreds of billions of dollars per the IRS's own figures) as well as just plain unintentional mistakes. The bux involved are enormous.
If you think you will convince people that compliance will be more of a problem with the NRST, you'd better come up with a more convincing set of arguments that include some definitive facts and figures rather than just anecdotal stories.
Little Willie is "The Worst President In American History."
It's not an Excise. It's not a Duty or Impost. It's not a Direct Tax proportional to actual Census.
It's not Constitutional.
You are misinformed in the extreme Uriel1975. The NRST is an excise and clearly so. It is also constitutional, despite what you would hope for.
Little Willie is "The Worst President In American History."
--Fifth, the theory that the national sales tax would replace the income tax is unfounded.--
Prove it. The proposed legislation does, in fact, require that by law.
But, It doesn't repeal the 16th amendment as stated at the Fair Tax website....it's a fraudulent lie.
(f) FINDINGS RELATING TO REPEAL OF PRESENT FEDERAL TAX SYSTEM- Congress further finds that the 16th amendment to the United States Constitution should be repealed and that the repealing amendment should prohibit Federal taxation of incomes, wages, estates, and gifts.Hardly legislative language...that can't become law anymore than the authors name can...even though, they are both written into the bill.
The Fair Tax as promoted here on this forum is a fraud, why would we want to replace one system that has grown to corruption with another that starts out as blatant fraud.
We can argue untill we're blue in the face about what's legal and what isn't, but the fraud is obvious.
There is no intent in the legislative language to repeal the 16th amendment and there never will be.
Uriel1975, has it nailed exactly....using services as an example, the NRST is a direct tax on a service business and it's an income tax on the service provider as well...that's why they can't repeal the 16th amendment...it makes no difference to me whether I pay tax on my income or your income as a service provider, it's still an income tax.
Just teasing about the "picking on" comment - he certainly deserves it in any event, socialist or not. Actually I think the "socialist" comment was just fine as there are certainly plenty of the NRST opponents that display those tendencies and philosophies.
Little Willie is "The Worst President In American History."
The group's backup materials also assert that almost a third of its projected sales-tax revenue is supposed to come from taxes the Government will pay to itself. Build a road, pay yourself a tax. Buy some planes for the Air Force, pay yourself some more. And so on.
How much of the 'cost" of roads and jet fighters, and on and on... that the government now purchases is made up of hidden income taxes multiplied throughout the production chain? i.e. The Government paying itself?
If they buy foreign-made jet fighters, or if we buy German made cars, how much of he "cost" goes back into the US treasury in taxes versus American made products?
Why is manufacturing fleeing the world's largest market?
. Therefore I would support a national sales tax if it was accommpanied by a repeal of the 16th amendment.
They say it does, but they can't prove it with legislative language...it doesn't do it and it never will... the Fair Tax is a fraudulent lie.
There are going to be personal attacks on me... and this thread will possibly become about me and Uriel1975 but that's because they have no argument or proof we're wrong.
The income tax is eliminated by HB2525. But lurkey, only a constitutional amendment can outlaw income tax. Since HB2525 is a bill, not an amendment, how could it repeal the 16th? Clearly, an amendment is needed in order to repeal the 16th. For this reason, it is stated in HB 2525 that this should be done, ie the authors promote repealing the 16th amendment. Nobody is claiming that HB2525 repeals the 16th amendment. Why do you assert that someone is lying? It is the case that you are misreading.
The whole reason behind the National Sales Tax is that it is one of the few taxes that the individual can control. If I don't want to pay the 23% tax, I will grow a garden for food and cut back on consumption. Make my own clothes. Ride a bike. Etc. The current slave tax is almost outside the individual's control. I'd rather have the freedom to choose.
MY THOUGHTS EXACTLY.
Intellectual purity is certainly not a requirement! Your vote counts just the same. The FairTax bill calls for the repeal of the 16th Amendment and "... that the repealing amendment should prohibit Federal taxation of incomes, wages, estates, and gifts."
Little Willie is "The Worst President In American History."
You and Phyllis must have ESP(N)! I was reading this post when I received the EMail.
The U.S. government's power to tax is not dependent on the commerce clause. The U.S. power to tax stands on its own. It in no way derives from the commerce power, any more than it derives from the militia power or the patent and copyright power.
--Fourth, and more importantly, a national sales tax, regardless of how you wish to frame it, would serve to regulate commerce between a man and a man in a state, ...--
Your misunderstanding of this is profound. The enumerated items in Section VIII of Article I, following the first paragraph, concern some specific ways the U.S. Congress may spend money. Congress is specifically empowered to spend money, by hiring officials, constructing buildings, purchasing needed supplies, etc., to the extent such expenditures are necessary and proper, in the aim of "regulating" interstate commerce.
So, rather than the U.S. tax power in any way deriving from the commerce power, in actuality the commerce power derives from the tax power. You have it exactly backwards.
You're such a masochist, lurkerbee!!! You're just inviting everyone to attack you since you keep making these idiotic posts that have been completely refuted before. Why don't you cease and desist from all the misstatements?
Little Willie is "The Worst President In American History."
It's not a question of derivation, Red. The presumption is not that Taxes have to derive from the Commerce Clause. The presumption is that they cannot represent a violation of its terms in their effectuation.
Take it up with Justice Thomas.
To me it is simple, I support it if the 16th amendment is repealed and I don't support it any other way.
Repeal 1st and then we debate the new tax. (or lack therof)
Why don't you show us the language??
(a) APPROPRIATIONS- Appropriations for any expenses of the Internal Revenue Service including processing tax returns for years prior to the repeal of the taxes repealed by title I of this Act, revenue accounting, management, transfer of payroll and wage data to the Social Security Administration for years after fiscal year 2005 shall not be authorized.Gee, could the records "necessary to calculate social security benefits" be my income tax records?(b) RECORDS- Federal records related to the administration of taxes repealed by title I of this Act shall be destroyed by the end of fiscal year 2005, except that any records necessary to calculate social security benefits shall be retained by the Social Security Administration and any records necessary to support ongoing litigation with respect taxes to owed or refunds due shall be retained until final disposition of such litigation.
The IRS is not de-funded and the records are not destroyed untill 4 years after the sales tax is enacted...what will they do with that time?? AUDITS!!??
--The Fair Tax as promoted here on this forum is a fraud, ...--
Oh, stop being silly.
--There is no intent in the legislative language to repeal the 16th amendment ...--
Yes, there is. In fact, you just quoted it. The Fair Tax legislation alone will not repeal the 16th Amendment of course, so a separate effort will be necessary for that. I would encourage you and everyone else to get involved in that repeal effort and pursue it vigorously.
--the NRST is a direct tax on a service business and it's an income tax on the service provider as well ...--
No, it is not a direct tax, and it is not an income tax.
I'm hoeing up the garden right now and gathering up all the animal skins I can find while looking for a nice warm cave with cable TV! Way to go America!!!
Little Willie is "The Worst President In American History."
Confused by your comments, I went to a few places to see where you got this idea that a bill could repeal an amendment. I couldn't find it anywhere in TRTs here on FR, I couldn't find it in HB2525 either. I then went to AFT homepage and found what you cite.
The FairTax Will:
Repeal the federal income tax,
including capital gains taxes.
Repeal corporate and
self-employment taxes.
Repeal all payroll taxes including
Social Security and Medicare
taxes.
Repeal all estate and gift taxes.
Repeal the 16th amendment to
the Constitution that authorized
taxation of income.
Provide a universal rebate equal
to the sales tax paid on
essential goods and services to
ensure that no American pays
taxes on necessities.
Impose a 23% tax inclusive rate
on the purchase of new goods
and services in the U.S.
Perhaps this is where you get your disdain for AFT. I see your point. This is not correct. The bullet should read
"Call for the repeal of the 16th....".
Although the AFT page contains an error, it does not follow to label the bill itself a fraud! In fact, my information has come from the bill itself, not the AFT page. This is why I couldn't understand your position. Nevertheless, I see that only an amendment can outlaw income tax. For this reason, it was always clear to me that of course the bill couldn't do this...but at least it voices support for such an amendment. Your position would be more viable if the bill itself had contained the verbiage in question. Perhaps a statement like "the AFT page contains a misleading error that should be corrected!" then stating the error would have been more easily understood. But to call everyone who supports HB 2525 a liar is not too smart.
"I'm hoeing up the garden right now and gathering up all the animal skins I can find while looking for a nice warm cave with cable TV! Way to go America!!!
Now that's a Tax Shelter! ;~)
When you make the claim that U.S. tax power is somehow dependent on the commerce clause, you are claiming it derives from the commerce clause. That is not the case.
U.S. tax power stands independent of the commerce clause and would remain identical if the commerce clause did not exist.
You've been told before, lurkeylou (formerly known as lousbolts (formerly known as lewislynn)), that the records necessary to calculate your Social Security benes are not your Income Tax records but your wage earnings records provided to the SSA. Income Tax records are what you now file with the IRS and show other kinds of income, dedductions, etc. in addition to wages - but I thought you knew that!!! Certainly you've had explained to you (ad nauseam) the difference between wages and income yet you still don't understand it.
Little Willie is "The Worst President In American History."
"I thought it was "pitchforks" rather than "hoes"
Pig, I was using a word I got long time ago from an article by a Canadian economist that stated that, "Historically, the peasants have taken up their hoes and gone after government when the tax rate reaches approximately 38%." Pat's brigade seems to have graduated{?}. By the way, the "Chief's" NSRT was said to be "revenue neutral" at 17% and now is "revenue neutral" 23% if you include the price of the goods + the tax itself in calculations. I wonder how many more revelations will occur during the selling of the "fair tax".
A flat tax based on income from whatever source derived with NO deductions and/or exemptions {including Non-governmental "organizations", or other godgov created individual entities} would only be about 17% INCLUDING social security. Peace and love, George.
GO PAT GO!!!
It was Pat himself that use the "pitchforks" phrase.
It is not "CHIEF's" NRST, BTW, and there are two of them in bill form before Congress which has, apparently, led to your confusion. One version has a tax-inclusive rate of 17% and is revenue-neutral but does not include payroll taxes. The other version, the FairTax, has a tax-inclusive rate of 23% and is revenue neutral but DOES include payroll taxes.
For the life of me, George From Brooklyn Park, I can't see what is so fair about a tax on income. Perhaps you could expound upon that at some length?
Little Willie is "The Worst President In American History."
Without critics, how would we learn and improve? Lurkey, in its attempt to further deflect from rational thought, has made an observation on the AFT page under "what is the Fair tax". The page, in its attempt to generalize, inadvertently states the the Fair tax will repeal the 16th. Please correct me if I'm wrong - should this not read Call for the repeal of the 16th?
Lurkey has used this error to paint all supporters of HB 2525 (like me) as frauds. Wassupwidat?
Who are the congresscritters that signed on? Is there an article or news release we can post?
For that matter, everything this bill is designed to do Calls for something. Lurkey just likes to play word games. If adopted as written, approved by congress, signed into law and 3/4ths of the states agree, the 16th Amendment will be history! Nuf said.
Oh Boy...you've done it now. I just heard that the author of the Fair Tax Act of 1999 wants to respond to your post.
Everyone...Bookmark This Thread!
The last time someone made (_|_)inine (_|_)umptions with M(_|_) misinformation, the author responded and we've never heard from the poster again. See for yourself:
The Fair Tax: Do the Numbers Add Up? (Response)
Either StraightDave or I will post the response when we get it. I hope you survive.
Lurkerbee is just being lurkerbee. He'll fasten on ANY inconsistency, misspelling, or other anomaly no matter how small (even if inaccurate in many cases). He just HAS to call someone a liar so he can "win" in his own mind.
Here are the four new backers of the FairTax:
"The FairTax Act of 1999 added 4 new sponsors in the United States House of Representatives!!!!!!!!!
Rep Barcia, James A. (D-MI) - 09/08/99
Rep Campbell, Tom (R-CA) - 09/08/99
Rep Hall, Ralph M. (D-TX) - 09/14/99
Rep Bonilla, Henry (R-TX) - 09/14/99
Please be sure to contact your Congressman and ask when he or she plans to co-sign the FairTax legislation and make history!!!
Thanks again to all who have been doing so much to make this happen."
Little Willie is "The Worst President In American History."
The National Sales Tax is Unconstitutional.
What the Hell Do You Think The Gestapo I.R.S. and the Income Tax Is??
Get him Chief!!!
I certainly know of lurkey's love of. But at least he helps educate us all as the misinformation is debunked.
Yes re lurkerbee! And Yessss - color!! Ooooohhh! Makes me swoon almost. Lub it.
Little Willie is "The Worst President In American History."
"Who are the congresscritters that signed on? Is there an article or news release we can post?"
Jim Barcia, Tom Campbell, Bonea, TX and Ralph Hall
"I can't see what is so fair about a tax on income."
Pigdog, I imagine that you've seen me write MANY times that there is no such thing as a "fair" tax. But, a true flat tax based on income with NO deductions and/or exemptions would be the most equitably assessed and thereby the "fairest" of any of a number of necessary takings of peoples money that IS a necessary evil of having to maintain the general welfare and security of a country. A true flat tax would be based on the principal of people being able to pay taxes on a basis of ability to pay WITHOUT actually punishing those who made more money yearly on an unequal basis. Thereby deletinng the incentive to do better in order to make oneself better off on one's own initiative. In fact, the arbitrary cutoff lines that are used in the graduated income tax actually cause a number of people to become absolutely unproductive when they reach a cutoff point that will cost them a higher rate of taxation and an actual lowering of take home pay. It also makes ALL entities equally interested in maintaining the lowest flat rate that is possible to do the things that they want government to do. ESPECIALLY those people whose only income comes from investment. Because THEY many times have both the time to pay attention {and do} and the resources to "scream the loudest" {They won't with either of the "new"proposals for tax reform that we have been "given" or the present tax system that were made up by "economists" FOR "economists} when that flat tax becomes even the slightest bit oppressive. The "more perfect" form of taxation ever devised in terms of equitability. "NO tax system is "fair". Even the sales tactic should be a blatant warning to even the least among US. Peace and love, George.
GO PAT GO!!!
I'll let the author of HR 2525 do it for me. Stay tuned.
BTW, remember when they had the IRS Symposium to show that the income tax was unconstitutional?
1st Ever Report here on FR...IRS "SHOWDOWN" SYMPOSIUM!!!
They invited Congressmen, Senators, and the IRS to come refute their claims, but no one showed up. Since that didn't work, what do we do now....what do we do now?
Hey. I've got it!!! Why don't we send a bill to congress that totally abolishes the IRS, the income tax system and CALLS for the repeal of the 16th Amendment?!?!?
It is not an Excise. It is not a Specific, fixed, absolute charge on a particular commodity.
A true flat tax would be based on the principal (sic) of people being able to pay taxes on a basis of ability to pay.
You are a socialist!
"from each according to his means..." by your pal, Karl Marx.
You're right, if we didn't have uninformed/misinformed FReeple, we'd be preachin' to the choir. What gets me are the ones that know better yet outright lie about the advantages of the FairTax!
The National Sales Tax is not a Direct Tax proportional to the actual census of the population of the Several States. It is a Direct Tax ...-- That's wrong. A sales tax is not a "direct tax." It's an indirect tax.
Well, then, what "Indirect Taxes" are specifically enumerated among the powers of Congress to Tax?
Howard Zaritsky Legislative Attorney American Law Division
May 25, 1979
Report No. 79-131 A
... In Brushaber v. Union Pacific R.R. Co. (1916), the Supreme Court held that the income tax , including a tax on dealings in property, was an indirect tax, rather than a direct tax, and that the "the command of the amendment that all income taxes shall not be subject to the rule of apportionment by a consideration of the source from which the taxed income may be derived forbids the application to such taxes of the rule applied in the Pollock case by which alone such taxes were removed from the great class of excises, duties, and imposts subject to the rule of uniformity and were placed under the other or direct class." 240 U.S. 1 18-19 (1916)
This is just one example of the cases in which the Supreme Court has held that Excises, Duties, and Imposts are The Class of Indirect Taxes enumerated and allowed by the Constitution.
The Sales Tax is not an Excise. It is not a Duty. It is not an Impost. It is therefore not a Constitutionally Enumerated or aloowed Indirect Tax. And, furthermore, it violates the Commerce Clause in its effectuation, albeit (of course) not its derivation.
The National Sales Tax is not a Direct Tax proportional to the actual census of the population of the Several States. It is a Direct Tax ...-- That's wrong. A sales tax is not a "direct tax." It's an indirect tax.
Well, then, what "Indirect Taxes" are specifically enumerated among the powers of Congress to Tax?
Howard Zaritsky Legislative Attorney American Law Division
May 25, 1979
Report No. 79-131 A
... In Brushaber v. Union Pacific R.R. Co. (1916), the Supreme Court held that the income tax , including a tax on dealings in property, was an indirect tax, rather than a direct tax, and that the "the command of the amendment that all income taxes shall not be subject to the rule of apportionment by a consideration of the source from which the taxed income may be derived forbids the application to such taxes of the rule applied in the Pollock case by which alone such taxes were removed from the great class of excises, duties, and imposts subject to the rule of uniformity and were placed under the other or direct class." 240 U.S. 1 18-19 (1916)
This is just one example of the cases in which the Supreme Court has held that Excises, Duties, and Imposts are The Class of Indirect Taxes enumerated and allowed by the Constitution.
The Sales Tax is not an Excise. It is not a Duty. It is not an Impost. It is therefore not a Constitutionally Enumerated or allowed Indirect Tax. And, furthermore, it violates the Commerce Clause in its effectuation, albeit (of course) not its derivation.
Well, that's a nice link to a long article, but it doesn't begin to address the numbers question I brought up.
And it skips the second point entirely.
The National Sales Tax is
Not an Excise
Not a Duty
Not an Impost
Not a Census-Apportioned Direct Tax
It is Therefore Not Constitutional.
What gets me are the ones that know better yet outright lie about the advantages of the FairTax!
I second that! I assert that understanding the motivation of the misinformers helps us put the discussion in perspective and helps us make conclusions about the Fair Tax. It is for this reason, among others, that I will always try to engage a non-supporter to learn! ooops gotta run.
""from each according to his means..." by your pal, Karl Marx. "
Principaled, NO, NO, NO!! you have it backwards. Marx, wanted to tax the rich more on the basis of how much money they mad through the use of the caricature of today's graduated income tax that charges higher earners a higher rate in order to reach his "from each according to ability, to each according to need". Although the deductions and exemptions that have been added in effect nullify any attempt to do so. It occurrs to me to ask if you have ever told an unmarried employee, "you don't need that raise". While at the same time giving a raise to a man with children who "needs the money"?
Principled, No it is YOU who are the socialist who is shaking hands with the socialists on the other end of the spectrum. They would "give according to need", while you would give according to ability. Peace and love, George.
GO PAT GO!!!
Prepare yourself for a BIG letdown. I truely hope you won't be too embar(_|_)ed.
Just to make a point here, George, I'm not herein arguing in favor of any particular "Capitation, or Other Direct Tax". I am arguing that the National Sales Tax is
Not an Excise
Not a Duty
Not an Impost
Not a Census-Apportioned Direct Tax
It is therefore Not a Constitutionally Enumerated Tax; it is Not Constitutional.
If you think you will convince people that compliance will be more of a problem with the NRST, you'd better come up with a more convincing set of arguments that include some definitive facts and figures rather than just anecdotal stories.
Don't just snap an answer back to me on this one, rather, think about it for a few days and reflect on the nature of your fellow humankind. Be honest, after all, you're only talking to yourself. Here are some starters:
What is the most common demonination of currency? Why is the most commonly counterfeited? Bigger bills would be easier production process, smaller bills are not worth the effort. Think of something else this principle applies to.
Say there are two stores 40 miles apart. You want to buy a 20 dollar item. If there was a 40 cent savings at the store 40 miles more away, would you go there for it? If it was a 7 dollar savings, would you be more inclined?
What if the item was 400 dollars, and the price difference was 140 dollars? Would you just pay the higher price, or would you start finding reasons to take the longer trip? On the way home from that longer trip, would you be likely to feel real good about saving that 140, and would you start thinking of all the things that you could do with it, if it wasn't already spent out of necessity?
If you were a small struggling store owner selling $650 TV's(500 + 150 tax), and you owed 1000 dollars to someone, would you ever consider reporting two TV stolen and sell two for cash to people you know for 300 price and collect hundreds of dollars in insurance money? You could pay your debt, write it off for more tax savings, and pocket a few hundred bucks on top. Great tax system.
If you could get a $600 dollar TV for $300 from a close friend in the business, would you think it was a good deal?
Your (_|_) texts are amusing, but inconsequential.
The National Sales Tax is
Not an Excise
Not a Duty
Not an Impost
Not a Census-Apportioned Direct Tax
It is not a Constitionally Enumerated Tax. It is therefore Not Constitutional.
I'm a little weary today Principled. I've been fighting with construction bosses and facing a closing and moving deadline that has my teeth on edge.
Before I go further, I have gone around and around with dirtboy and the Chief and we have left it at -- we disagree -- it was either that or kill each other.
My basic belief is that the flat-tax, or what ever you want to label it, is the crack in the dam. When Steve brought this up in '96 they jumped all over him and now it is common and acceptable for discussion. Like so many policy ideas Steve Forbes has broached, it seems possible to do something about the need for tax relief.
With a National Sales Tax you need an amendment to the Constitution.....that's a tough road. So many states needed to vote to approve it and so many years will pass without relief. By then, would it even pass with so many getting their "targeted" tax cuts and thinking it's a big deal? Sort of like voting for your own salary (what is it now, 20 million work for Uncle Sam) and goodies ("earned" income tax credit comes to mind). The topic is hot now, who knows in a couple of years while we wait for a dumbed down populus to be educated about the NST (the "mainstream" media won't be eager to tell the truth of any of this)and then to vote for passage.
So while the numbers are of such importance to many (and I must admit this newest cooking of the books is pretty disgusting though it, or something like it, isn't unexpected), my main concern is for something SOMETHING to happen soon. People need to see it CAN happen and the downsizing of government departments and programs can make this even more acceptable and reasonable to the voters. From that beginning we have a reasonable chance to make more changes.
Steve Forbes' policies are taylor-made for workable return to what we should be about: Strong families, educated citizens, strong economy and military and not living with fear of growing old or getting sick.
Click below and after you check out the easy to understand tax stuff, go the main page, National Headquarters and browse around the Forbes' web site.
Huh? I'd buy a used TV and pay no tax. Used (previously taxed) items are not taxed again with the FairTax.
Uriel, Thanks. I too try to come up with valid arguements, but facts really don't seem to matter to these guys. Peace and love, George.
By the way, GO PAT GO!!!
Damned if I can decipher that - what are you trying to say? It seems like nothing but gibberish. Your post is unintelligible; clean it up to say what you mean.
Do you still advocate hanging those who can't or don't pay their tax "correctly"?
Little Willie is "The Worst President In American History."
Wrong, wrong, wrong, Uriel1975! Check the date on your textbook - it may not tbe up to date. As I told you before and excise is (according to the dictionary) "... an internal tax levied on the manufacture, sale, or consumption of a commodity." It is certainly and absolutely Constitutional.
Little Willie is "The Worst President In American History."
That's why you'll notice me calling this poster Karl from G0rky Park so frequently. He also wants to hang people who do not pay their taxes "correctly" - seriously.
Little Willie is "The Worst President In American History."
"I'm a little weary today Principled. I've been fighting with construction bosses and facing a closing and moving deadline that has my teeth on edge.
Before I go further, I have gone around and around with dirtboy and the Chief and we have left it at -- we disagree -- it was either that or kill each other.
If anybody should be against the NRST, it would be me. I have a Moving Co. here in Clear Lake City, TX. so I would have to start charging a sales tax. Aren't you close by?
EMail Taxman to get my EMail address and I'll give you a special rate, and I promise not to charge you a TAX!...deal?
Are you deaf ... The NRST is an excise!!!. Do I need to keep repeating this until you hear it? Little Willie is "The Worst President In American History."
OK???
Little Willie is "The Worst President In American History."
"Damned if I can decipher that "
Pig, Perhaps another prozac would help. Peace and love, George.
GO PAT GO!!!
That's oh so sweet Chief, but I'm afraid I'm not fit company. I'm going to go back over to the house and chew some more people out and I would never want you to think I'm anything but a sweet little thing.....don't ruin the illusion.:^)
Here is what my 1997 Webster's says:
Well, boys and girls, that pretty much covers it.
You seem to be completely unaware of the sorts of evasions and avoidances that go on under the income tax. Most of the anecdotes you present even if real only illustrate what can go on in any tax system and apply equally well to the income tax as to any other. You have shown nothing inherently embedded in the NRST that causes lack of compliance nor have you shown any statistics from definitive sources.
I see nothing in the NRST that encourages or allows non-compliance any more so than any other tax system. In fact, consumption is more difficult to hide than income. Try hiding your new Lexus or new $600,000 house or 52-inch TV set. It's a bit tough.
That said, there is the old saying that nothing is certain except death, taxes, and tax evasion. The best answer to this sort of difficulty is to have a tax system that is simple and that people view as fair to minimize the incentive to cheat. Clearly neither the present system nor the flat-VAT income tax system qualify on those grounds.
Little Willie is "The Worst President In American History."
I understand...If anyone gives you a problem, jes call me and I'll send over my movers that are 6'14" and chew nails in their off-time.
That's a deal!
There is no "newest cooking of the books" as you so delicately put it. The posted information you refer to is quite old and has been debunked several times over.
A Constitutional amendment is not required for the NRST. I'm assuming you intended to say the repeal of the 16th Amendment was required. That also is not correct since the FairTax bill removes the income tax provisions from the tax code, defunds the IRS, and requires the destruction of the income tax records. In addition, it calls for the repeal of the 16th amendment and "... that the repealing amendment should prohibit Federal taxation of incomes, wages, estates, and gifts." All of this is part of the bill, HR2525.
So the repeal is not required to be rid of the income tax, but it is required to make the income tax unlawful. Keep in mind that right now congress could vote both types of taxes upon us at once if they chose. That certainly is a very good reason to pass the FairTax bill; to start the process of making the income tax illegal. Keep in mind though that twice before in our history we had an income tax voted upon us and that was before there was a 16th Amendment so not having the 16th by itself is no guarantee (which is why the FairTax calls for the specific prohibitions that it does).
The Forbes flat-VAT income tax is not even a bill yet (in fact is not even revenue-neutral) and certainly does not call for the things that are clearly specified in the FairTax bill.
The disagreement I would have with Forbes is in his choice of tax plan and I believe that the flat-VAT income tax would be a disaster for the country in several ways. I believe he is utterly wrong about his tax advocacy and I have told him so.
Little Willie is "The Worst President In American History."
According to the group, such a plan would raise exactly as much money as current laws do, while cutting taxes for just about everyone..... at 1995 levels a new sales tax would have to raise $1.36 trillion to replace all Federal income taxes, payroll taxes and estate and gift taxes.
While I admit to not reading your entire post, this last part of the above quote stands out. There are two things wrong with it, which, it seems, negates the entire premise: First, (and least important), we're not AT "1995 levels". Second, and most important is that we don't have to raise 1.36 trillion dollars by virtue of the overpayment we've been socked with and the Fed now owns.
Since we've got such a huge "surplus" which everyone in DC's been scrambling to find a way to spend, it stands to reason that we shouldn't have collected 1.36T$ to begin with. Drop that figure down to a government "allowance" of, say, 20% of what we make (still too much by my standards, but be that as it may...) and the NST will drop accordingly.
Will someone please explain to me why we have to run our paychecks past Washington before they deign to give us back what they think we should get back? Seems to me that what we make is ours to spend as we see fit. I propose the Fed be given an allowance, with which it must pay for all social programs, social spending, welfare, arts, various agencies and the military. It will become quite clear rather soon where the priorities lie. (lay?)
American families must live within their salaries. Why can't the Fed? Because no one protests enough. A tax revolution would be quite appopriate at this point in history, what with the upcoming election and all, don't you agree?
You outta' lay off them Prozacs, Georgie ... bad for ya' ... turns your mind to jello ... makes you think like a socialist and babble like a brook - which you just did.
Little Willie is "The Worst President In American History."
Hey, great idea there, M2. why don't we just give the Feds a percentage of all the money we spend to buy things and let them live on that? If we transfer it theough the states to boot, that isolates the Beltway Bastards a little bit more from getting their fingers in the till, and if we allow no exceptions by law, then - well - it's a hell of a good start to get back control of government and our lives.
Why don't we start with 23% and move to repeal the 16th Amendment (while making the income, etc. tax illegal in that repealing amendment)?
All in all, a grand idea.
Little Willie is "The Worst President In American History."
Thanks for the reply, Cincinatus' Wife. Your post asserts that a constitutional amendment is needed in order to eliminate the income tax. That is not right. HB 2525 eliminates the income tax. "Outlawing" the income tax requires an amendment, and the authors of HB 2525 have voiced support for such an amendment.
Now Steve has said he would sign an NRST "in a heartbeat", which is good. But I cannot support his flat income tax. I think it would be worse than what we have now...
hope your closing goes off without a hitch...are you buying, selling, building, or a Realtor? BTW, an NRST would lower long term interest rates dramatically more than a flat tax!
Huh? I'd buy a used TV and pay no tax. Used (previously taxed) items are not taxed again with the FairTax
When the taxman, you will have to prove or pay tax.
Pigdog,
I don't really want to step in between you and Uriel1975 but it looks to me like you both used the same dictionary. You seem to keep yelling that the NSRT is an Excise but the dictionary definition speaks to application to "A" commodity not "All" commodities. Then Chief kicks in his example of Liquor and tobacco, like that proves your point, when it actually proves Uriel's point. Excise taxes deal with specific commodities.
Back to work.
bonehead
You seem to be completely unaware of the sorts of evasions and avoidances that go on under the income tax.
That's what I do for a living. I know it real well. And I know what people will want to do. They key to the existing system is that nobody can understand. That's why it works. It also divides and conquers. This helps the tracking immensely. You simplify, any jug head can figure out how to beat, and then will mercilessly.
Now go back and think on it some like I told you you should.
"When the taxman, you will have to prove or pay tax."
Huh? again...please speak english.
"Then Chief kicks in his example of Liquor and tobacco, like that proves your point, when it actually proves Uriel's point. Excise taxes deal with specific commodities."
Like NEW goods and services? Are these "commodities"? Back to the dictionary. 2. Something of use, advantage or value.
Your honor...I rest my case.
Ain't this phun?
We certainly did not use the same dictionary - the poster said he used Funk & Wagnalls; I did not. You'd better study that wording more carefully since even the F&W he used is subject to the same interpretation that I have given since is uses the term "specific commodities" (and not "a specific commodity") which indeed could mean any commodity sold at retail. It does not say a single commodity or a single type or class of commodity.
In this usage, the term "commodity" is a collective noun (an economic good) and not one of specific identification.
Additionally, the definition posted by CHIEF negotiator is also not referring only to liquor or tobacco specifically since it says "as liquor and tobacco" and is giving an illustrative example of broad collective classifications of goods. It could equally have said "TV sets, automobiles, candy bars, etc." to offer as an illustration. The poster was merely choosing to use a highly questionable definition that suited his purpose.
In any event, the important words are "tax", "sale" or "consumption" since that is what is involved in the excise.
Little Willie is "The Worst President In American History."
Chief,
Commodities are specifics, not adjectives. "New" is not a commodity, New Goods are not a commodity. Liquor is a commodity, tobacco is a commodity.
An Excise tax deals with a specific commodity to limit this kind of tax everything money grab.
Congress has to write the excise tax for each specific commodity. That's what takes so much of their time.
you rest your case. sheesh. I think I'm with Cincinatus's Wife.
I'ver "thought on it" plenty James Gunn ... more than you will ever imagine.
The lack of compliance with the NRST is greatly overrated and is almost undoubtedly less than what we now have with the direct tax system. You seem unwilling to recognize that for some reson.
Give us some comparable, documented examples that back up your point of view. Most of the examples you have cited apply equally well (if not better) to direct taxation as to the NRST.
Little Willie is "The Worst President In American History."
"New Goods are not a commodity"
1._________
2._________
3._________
4._________
5._________
Pig, I hope a lot of people read these threads, for the arguements in themselves are extremely enlightening. Peace and love, George.
GO PAT GO!!!
Nope, you're wrong. A commodity is not a "specific", it is a noun and, in fact, usually a collective noun. It is something of use or value (an economic good).
"New goods" could certainly delineate one general class of commodity even if not rigorously defined by size or shape since new goods are in fact an identifiable grouping.
I am not aware of any law that requires congress to "write an excise tax for each specific commodity" as you state. Please show us where that specific requirement exists in the law of the country.
I think what takes so much of Congress' time is listening to lobbyists wheel and deal for some income tax advantage for those paying them - and that won't change with the flat-VAT income tax.
Little Willie is "The Worst President In American History."
Don't try to sneak out with your gibberish left undefined, Karl Frm G0rky Park. Straignten out whatever it was you were trying to say so that we may all have a crack at it. Do not just slink away like the proverbial "socialist in the night" - or was that "thief in the night"??
BTW, you have never answered me about whether you are still advocating hanging those who don't comply with correct payment of their direct taxes. "Correct" - a misnomer if ever there was one.
Little Willie is "The Worst President In American History."
I'm gettin' ready to go to the store to buy a "commodity", you want me to pick you up some?
You shoulda been here for the chicken dinner "commodity" Mrs. CHIEF fixed. The Stuffed potato "commodity" was to die for. Yum...Yum...
I think I'll go pick my teeth with a toothpick "commodity".
Pigdog, Yeh, I'll go along with that. If they haven't got enough sense to fill out the three lines necessary for a REAL free tax, or if they would willfully cheat on their equitable share of running the country, society would probably be better off without them anyway. HANG 'EM!! Peace and love,George.
GO PAT GO!!!
Yeah, but I like those longneck "commodities" with the church-key tops (old-fashioned kind of guy, ya kno).
Little Willie is "The Worst President In American History."
"HANG 'EM!!"???
Nah...let's just throw'em into Boston Harbor along with the income tax code.
OK, I'll pick up 2 sixpacks of longneck "commodities" and one church-key "commodity"....but what if my 16oz. cans of Red Dog "commodities" get jealous?
Just as I suspected, you really DO still want to hang people. You are one sick dude!
How do you propose to handle the payroll tax ("who ya' gonna' hang"?) and what about business taxes ... do you hang the entire business or just the officers? (directors?) (employees?). You've gots lots of definition to do.
"Who's to say if their "three lines" are correct or not ... not you, I hope? I'll pass; that's almost as abusive as the IRS (which will still be there in your scheme anyway - maybe they'll do the hangin'?).
I hope you realize this is one of the dumber schemes extant. Perhaps you should sign off with the tag line of "Peace and Strangulation, George".
Little Willie is "The Worst President In American History."
Just tell 'em to Visualize Whirled Peas!
Little Willie is "The Worst President In American History."
I thought you were gonna say, "Just throw'em a bone".
Hey! Where'd everybody go?
t's not an Excise. It's not a Duty or Impost. It's not a Direct Tax proportional to actual Census. It's not Constitutional.
Neither is the income tax but they managed to get an amendment to make it so. With any kind of income tax people only think about it once a year, when they file. The beauty of a sales tax is that it's right in front of your face every time you buy something, every time you plan for something. If we're ever to reduce the size of government the only way it will be accomplished is if EVERYONE gets pissed at the same time and makes enough noise. Every time DC wants to pass a little program every citizen will have to calculate that into their budgets. I doubt very seriously that anyone will ever be able to pass another give away program again. That will necessitate the deletion of waste because suddenly everyone will know just how much his/her share of that waste is.
Are you still with us, or have you finally realized how preposterous your misinformed miscalculations have mistated the facts?
Just think...you even haven't heard from the author yet! I hope you survive.
Well said Mac.
VAT income tax???????
When did you decide to morph a value added tax (VAT) onto the flat tax?
Man, this thread's a mile long! Can you html us a ? Maybe you could rename it too?
I didn't decide any such thing and it is not "morphed". It has always been a VAT as is our current income tax in that either embed business taxes and compliance costs on top of product costs and these non-productive costs cascade from level to level right on down to end-use, doing nothing but raising prices at each step of the way. It is, in form, a subtraction-method VAT.
Were you not aware of this?
Little Willie is "The Worst President In American History."
It's only about 260K ... we've had 'em over a 1/2 meg before - pull up your socks and wde in.
Little Willie is "The Worst President In American History."
CW, these guys will use any subterfuge to sell their "fair tax". They know damn good and well that any business passes on all taxes it has to pay {including sales taxes that the owners have to pay} as "business expenses". Otherwise businesses would soon fold up under the fees, permits, licenses, and other taxes that government charges them to operate. Peace and love, George.
--... In Brushaber v. Union Pacific R.R. Co. (1916), the Supreme Court held that the income tax , including a tax on dealings in property, was an indirect tax, rather than a direct tax, and that the "the command of the amendment that all income taxes shall not be subject to the rule of apportionment by a consideration of the source from which the taxed income may be derived forbids the application to such taxes of the rule applied in the Pollock case by which alone such taxes were removed from the great class of excises, duties, and imposts subject to the rule of uniformity and were placed under the other or direct class." 240 U.S. 1 18-19 (1916)
This is just one example of the cases in which the Supreme Court has held that Excises, Duties, and Imposts are The Class of Indirect Taxes enumerated and allowed by the Constitution.--
What you've quoted is merely a statement that the language of the 16th Amendment removes income tax from needing to meet a test of uniformity, as a particular income tax had been in the Pollock decision due to the tax's relation to real estate. It is not a statement that excises, duties and imposts are the only possibilities for indirect taxation.
The Pollock decision itself contains this interesting observation:
"And although there have been, from time to time, intimations that there might be some tax which was not a direct tax, nor included under the words 'duties, imports, and excises,' such a tax, for more than 100 years of national existence, has as yet remained undiscovered, ..."
The Pollock decision was in 1895. The first State sales tax was enacted in West Virginia in 1921.
Here's a quote from Chief Justice Marshall, on the matter of a State imposing a tax on an importer's income (which the Court overruled):
"It is impossible to conceal from ourselves that this is varying the form without varying the substance. It is treating a prohibition which is general as if it were confined to a particular mode of doing the forbidden thing. All must perceive that a tax on the sale of an article imported only for sale is a tax on the article itself."
By Marshall's reasoning, then, a tax on the sale of an item which has been produced for sale is a tax on the item itself, i.e. an "excise." The Fair Tax is virtually perfect on the question of uniformity throughout the United States, in that it imposes an identical rate on all new items everywhere. It would be hard to find any better uniformity than that. Indeed, the Supreme Court has found adequate uniformity in cases where taxes are levied on some activities or items and not on others, obviously a much lower standard. The Court's rule of uniformity has been that uniformity is satisfied if the tax is uniform among those persons or articles targeted by Congress, regardless of whether other items of similar value are taxed.
--... [Sales tax] violates the Commerce Clause in its effectuation, albeit (of course) not its derivation.--
Repetition is never going to make that true. Exercise of the tax power of the U.S. does not, and cannot, violate the commerce clause. They are two different things.
Any income tax whether flat or round is exactly the same as a VAT. Businesses do not pay taxes...they collect taxes in the form of higher prices, lower wages and less return on investment.
When a welfare recipient goes to buy a loaf of bread -- even though they pay no income taxes directly -- they will end up paying the income taxes and substantial compliance costs of the farmer, miller, baker, distributor, transporter and retailer that are hidden in the cost of that loaf.
A VAT, but by a different name.
I am going to take your numers as being correct. You have just made the greatest argument for the sales tax of anyone I have seen. Lets put a 56% sales tax on and watch the tax revolt. That may be just what we need to wake up the sheeple.:)
Congratulations.............I like it.
WarHawk42
Give us some comparable, documented examples that back up your point of view
Your the one with the 'hot' system. Show us the country where it has worked.
An idea this good must have worked somewhere, either that or you haven't thought enough.
Huh? again...please speak english.
It was English, just a little incomplete.
I was replying to your comment about the used TV. A good point you have raised. A flat tax will raise the value of all used goods and extend the life of a lot of different items.
It doesn't matter how much money most people have, they will spend every dime as though the didn't have enough. Just because you let them have more free cash, does not mean that they will suddenly feel that they have anymore.
Another area of interest is financing costs and interest. People will end up financing about a third of their purchase at high interest rates. That should just about cancel out the benefits of the tax for a lot of people.
Damn, your full of good ideas tonite chief.
The point you made about the used TV raises a couple of interesting points. There will be tax audits in peoples homes where you will have to show all your receipts for used or new stuff, or they will assess you the tax you may have already paid. Another point there, if the merchant takes the tax money and runs or dies, there is nothing to keep the tax boys from coming to you to assess the tax with interest on your hide. When a business goes bust, they will chase the owners, but many times there is nothing left. Consumers on the other hand, will always be home with the goods, a certain percentage will never keep accurate records.
I have specifically asked you to provide detailed, definitive backup for your extravagant non-compliance claims. Obviously you cannot. The depth of your argument is underwhelming to say the least.
With respect to other countries having a true NRST as their tax system, there are none. There also no countries that have a representative republic that has lasted for over 200 years. Does this mean we should have neither?
Once this country has the NRST in operation, you will certainly see many other countries investigating what they can similarly do.
Little Willie is "The Worst President In American History."
80% of all retail sales tax revenue come from 20% of the largest retailers. Are you saying that the new Treasury Dept. will conduct door-to-door raides for receipts of items like the new microwave oven you have just purchased?
HAHAHAHA! Stop it...I can't take much more!!!
James Gunn, you would profit greatly by reading HR2525 and becoming informed before throwing out such ignorant statements.
Little Willie is "The Worst President In American History."
A fine post Red Redwine. You certainly do excellent work.
Little Willie is "The Worst President In American History."
>>>>>It doesn't matter how much money most people have.... Just because you let them have more free cash...>>>>> you talk as though this isn't the individual's money in the first place!
>>>>>Another area of interest is financing costs and interest. People will end up financing about a third of their purchase at high interest rates. That should just about cancel out the benefits of the tax for a lot of people.<<<<<
This is not cogent. Financing costs will decrease dramatically, long and short term. And why do you think that people having more of their money will lead to more financing? Regardless, isn't it up to each individual to decide how to spend his money? Your points against the Fair Tax don't hold water, JG. Why are you trying to mislead? Your arguments follow that of a statist...but I don't read you as that. Why mislead?
Georgie Porgie wants to hang 'em if they don't shape up. What does that make him?
Little Willie is "The Worst President In American History."
Jorge from Brooklin Park not only likes to misspell names, he likes to misstate facts and misinform cuious freepers. I'd call him a mis-taken socialist.
80% of all retail sales tax revenue come from 20% of the largest retailers. Are you saying that the new Treasury Dept. will conduct door-to-door raides for receipts of items like the new microwave oven you have just purchased? HAHAHAHA! Stop it...I can't take much more!!!
They don't have to do raids, they just have to call your laughing butt in for an audit. Don't imply that I am off base with the laughter, when you are the one who thinks that no one is going to acquire new goods without receipts. Thats one hell of a real laugh. I hope your are 17.
Now, the proof of your tax payments is in your income statements. Under your system, no such convenience. Today if the IRS comes to your home and determines that you have more goods than you could afford to earn, they ask you to prove it. IF they say so, you owe, and maybe you go to jail in Leavenworth. Money is still money, and the government is gonna come for it, one way or the other. To think that a new easy cheat tax system will exist without tax collectors is really the biggest laugh of all.
Perhaps your naivete comes in your unquenchable faith in big chain stores. When the tax boys call you for an audit, are you gonna bring the lawyers from the chain stores with you? No way. You will be on your own, and if you can't prove you paid the taxes to the stores, or what store you bought the goods in, the last laugh will be on you my friend.
Tax collectors don't change. What if that big store hides reciepts to try and steal off the government? You my friend will be their holding the check with a big *hit eating grin.
I think that means, then, that he is a misanthrope.
Little Willie is "The Worst President In American History."
You'd better take my advice, James Gunn, before you make even more of a fool of yourself. Read HR2525. You are way off base.
For one thing ... there won't be an IRS ... but that's just for starters. If you truly thought that would happen, you could retain your sales receipts, you know - but hey, you already know that, don't you? Then why all this hubub?
Little Willie is "The Worst President In American History."
And BTW if you think your income statements prove anything to the IRS in an audit, you're even more ignorant that you seem. They don't, and many have found that out the hard way to their sorrow.
Little Willie is "The Worst President In American History."
You, sir, are misguided. Your posts indicate an unfamiliarity with HB 2525.
>>>>It doesn't matter how much money most people have.... Just because you let them have more free cash...>>>>>
you talk as though this isn't the individual's money in the first place!
Slow down your wishful thinking. You are just reading your imagination into this. I don't control other peoples money like that.
>>>>>Another area of interest is financing costs and interest. People will end up financing about a third of their purchase at high interest rates. That should just about cancel out the benefits of the tax for a lot of people.<<<<<
This is not cogent. Financing costs will decrease dramatically, long and short term. And why do you think that people having more of their money will lead to more financing? Regardless, isn't it up to each individual to decide how to spend his money? Your points against the Fair Tax don't hold water, JG. Why are you trying to mislead? Your arguments follow that of a statist...but I don't read you as that. Why mislead?
No. The heart and soul of the financing business is that a very large percentage of people will spend every penny they can get. If you are telling me that people feel they have just enough money now, but if given a little more they will use it to pay down debt and not spend more, then I ask you, why mislead yourself? Your understanding of American spending habits is totally washed out. (I had to reply to the water comment)
For one thing ... there won't be an IRS ...
Oh like wow. They will call it something else. Either way you slice, if the government don't get its money, they will come for it. If you buy into the idea that they won't, then don't look at the ground cause your feet ain;t on it my friend. I don't care who told you otherwise. You sound as if you never heard that a politician would lie. Ah, yes, but that's just JG talking about human nature again, so it can't be!
I've told you several time to read HR2525 - as have some other posters. You are doing nothing if not embarrassing yourself, but that's just JG sticking his head up .... well, you get the idea.
And oh, yes James Gunn, I not only know that some politicians lie, I know that some posters lie and try to cover it up by not presenting anything in the way of published information that backs up their position.
Little Willie is "The Worst President In American History."
You're all wet, JG (couldn't help it). But your argument that a certain number of people will spend every cent they can, and so we shouldn't have an nrst is, well, how to say it...goofy. If your assertion is correct, that a certain number of people will spend eveything regardless, then you are not making an argument against the nrst, you're just saying that those people won't change. Indeed, people will always take advantage of financing/capital for their needs. That the nrst greatly reduces the cost of capital (read interest rates) and would allow more access to that capital is certainly not a disadvantage, but rather an advantage. Perhaps "goofy" is not strong enough. Not trying to flame, but you're just not informed, JG. Some html guy can provide you links to good info.
And BTW if you think your income statements prove anything to the IRS in an audit, you're even more ignorant that you seem. They don't, and many have found that out the hard way to their sorrow
Uncle Sugar will not change. If you think having no receipts or income statements is not any help, just try going be no records at all.
OK, JG. Shower yourself (sorry) with Text of HB2525. I'm new at this, so I've worked hard to provide this. Take this as a friendly gesture. Hope it works.
Indeed, people will always take advantage of financing/capital for their needs. That the nrst greatly reduces the cost of capital (read interest rates) and would allow more access to that capital is certainly not a disadvantage, but rather an advantage
I sense that Ivy League wide eyed faith in the goodness and wisdom of the common man. It's based on truth, but other things are true too. I bank my thirty years experience dealing one on one small businesses and with Mr & Mrs Jane and John Doe against all your pies in the sky. Those number people are the same ones who say their is no deficit, and that there is a social security fund, and that Government actually keeps books. You are breathing di-hydrous monoxide, and just don't realize that anything is cause you can't see the air.(couldn't resist)
Before, I thought you were only ignorant. You're a fool.
Is this what you wanted me to see? True it does not call it the IRS, but it's all the same powers.
`SEC. 602. POWER TO LEVY, ETC.
`(a) IN GENERAL- The sales tax administering authority may levy and seize property, garnish wages or salary and file liens to collect amounts due under this subtitle, pursuant to enforcement of--
`(1) a judgment duly rendered by a court of law;
`(2) an amount due if the taxpayer has failed to exercise his appeals rights under section 604; or
`(3) an amount due if the appeals process determined that an amount remained due and the taxpayer has failed to timely petition the Tax Court for relief.
Thanks for reference. Tell me when get the meaning of ETC. (in terms of this plan) down in writing. Until you do, it means anything they want it to. And you want to buy it.
Wow.
NATIONAL SALES TAX
I am proposing a National Sales Tax to replace the unfair income tax that has been imposed on America. And in the process, do away with the corruption within the I.R.S. It is not right that some Americans pay more (percentage wise) than other Americans, and even worse that some don’t pay any at all.
Why is it that We Americans who work hard everyday to pay our bills and realize our American Dreams, only realize that the more we make, the more the politicians take. Then they spend it on things that most Americans would disapprove of if they only knew.
I propose a National Sales Tax that taxes Every American Equally. But not when you earn Your Money, you pay when you spend Your Money. This way every American pays the same amount (percentage wise) when you buy food, clothing, housing, etc. There would be no deductions, no loopholes, no filing with the I.R.S., and no hassles. The percentage is to be determined after a thorough audit of every department of government has been conducted by an independent nonpolitical accounting firm. This audit will also reveal some if not all of the fraud, waste, and abuse within Our Government. It will also give an accounting of where all Our money goes, and allow Us the great opportunity to reduce the size of Our Government to a size that is affordable to the American Taxpayer. I think it is also wise to include that we will need to adjust the rate up or down every five years as we adopt new government programs or do away with old ones, and to keep up with inflation. But those adjustments will effect every taxpayer equally, not just a few.
My philosophy is that Government should be made to give an accounting of it’s operations to the people who are funding it’s existence. Government should also strive to operate as lean as it possibly can without sacrificing it’s service to The People. But there are certain areas of business that the government has no need to be involved in, such as The National Endowment For The Arts, any grant or free money to any group or individual, and other programs that do not benefit All Americans as a whole. If I want art, I will either create it myself or pay someone else for it. And I certainly don’t want My tax dollars just given away to someone who is to lazy to work for it like I have to.
The independent audit will not only show all of America what financial state Our Government is in, it will also reveal most if not all of the fraud, waste, and abuse that has driven our national debt so high. It will also reveal who is responsible for the greatest travesty that has ever been imposed on Americans, so that they can be held accountable. And finally, it will allow Us to have a truly Balanced Budget.
We All, as Americans, are affected by a government that is out of control. It has been controlled by career politicians for too many years. And they are to blame for creating a system that devides Americans into these groups and pitting one group against another, so that they can continue to do as they please with Our Tax Dollars without being held accountable. It is time that All Americans join together and put a stop to this kind of behavior from Our elected officials. It is time that All Americans pay the same amount in taxes, so one Group is not overtaxed, while another Group pays less. We All have an equal share in the responsibility of Our Government.
Let me have a shot at JG pigdog...this should be interesting...
" They don't have to do raids, they just have to call your laughing butt in for an audit."
I thought you have bothered to study the bill, but obviously not! Individuals will never have to face the tax man ever again once the FairTax is approved. Only retail businesses that sell NEW goods and services will have to face the taxman. Kapeche?
"Don't imply that I am off base with the laughter, when you are the one who thinks that no one is going to acquire new goods without receipts. Thats one hell of a real laugh. I hope your are 17."
I have 4 children older than 17, so what does that tell you? Everyone will recieve a receipt with every purchase that will specify the amount of tax paid.
Now, the proof of your tax payments is in your income statements. Under your system, no such convenience."
WHOA Nellie! You think it "convenient" that government should determine how tax payer friendly you are by your truthfullness about your income? HA! Put down that keyboard, put your hands in the air and back away!
"Today if the IRS comes to your home and determines that you have more goods than you could afford to earn, they ask you to prove it. IF they say so, you owe, and maybe you go to jail in Leavenworth. Money is still money, and the government is gonna come for it, one way or the other. To think that a new easy cheat tax system will exist without tax collectors is really the biggest laugh of all."
Thank you, you've just proven my point. Do you want to go to jail for not reporting your entire income? DUH!?!?!
Perhaps your naivete comes in your unquenchable faith in big chain stores. When the tax boys call you for an audit, are you gonna bring the lawyers from the chain stores with you? No way. You will be on your own, and if you can't prove you paid the taxes to the stores, or what store you bought the goods in, the last laugh will be on you my friend."
How many times do I have to tell you that only retail businesses will face the tax man?
Tax collectors don't change. What if that big store hides reciepts to try and steal off the government? You my friend will be their holding the check with a big *hit eating grin."
Do you get a kick out of showing your ignorance? Remember...ignorance is only "temporary" but stupid is "forever"!
OK... bozo's here are the fact, the IRS is practices ransom practices of "if you don't pay our gray scale taxes we will put you in prision" give a frigen break... no matter what to retain a republic the IRS has to go. Under the current system you are a criminal under a sales tax system there would be no criminals. How else can our society be de-criminalized. Anyone opposed if a NATZI... ok this a liberal paint brush approach, but if it works then...
That was beautiful. Perhaps you may want to join our FairTax FReeper Cyber-War?
Huh?
How many times do I have to tell you that only retail businesses will face the tax man?
So what your saying is, if I get new goods from somewhere and sell as a private citizen, I don't have to pay tax?
Wether or not you are in business depends on wether or not you sell anything. If you sell something, now you are no longer a citizen, you are a retailer. If they think you did this, they can call you on the suspicion. Now you are at the audit. Thanks for making my arguement. Do you get a kick out of showing your ignorance? Remember...ignorance is only "temporary" but stupid is "forever"!
"So what your saying is, if I get new goods from somewhere and sell as a private citizen, I don't have to pay tax?"
Correct-a-mundo!
Wether[sic] or not you are in business depends on wether [sic] or not you sell anything. If you sell something, now you are no longer a citizen, you are a retailer. If they think you did this, they can call you on the suspicion. Now you are at the audit. Thanks for making my arguement. Do you get a kick out of showing your ignorance? Remember...ignorance is only "temporary" but stupid is "forever"!
Why do you put yourself through this much abuse? If I sell you a bicycle, I promise not to charge you a NRST! Only retail BUSINESSES will charge a tax.Retail businesses will collect the tax from the consumer - 45 states already have a sales tax system, and the FairTax will simply be an additional line on the current sales tax reporting form. In rare cases, businesses that produce products or services that are not currently taxed under state sales tax, will have to begin collecting the FairTax for the first time.(Like me) Businesses will simply collect the tax and send it to the state taxing authority. All businesses serving as collection agents will receive a fee for collection, and the states will also receive a collection fee. The tax revenues from the states will then be sent to the U.S. Treasury.
Please show me the legislation in the bill that says that they will conduct an audit on individuals that do not operate a retail business.
YAWN...I'm waiting
Well? Do I have to die from old age before you provide the link to the legislation that mandates "individuals" to report sales, collect sales taxes and send them to the states?
Yawn........I'm getting sleepy... either put-up or shut-up.
that the records necessary to calculate your Social Security benes are not your Income Tax records but your wage earnings records provided to the SSA. Income Tax records are what you now file with the IRS and show other kinds of income, dedductions, etc. in addition to wages - but I thought you knew that!!! Certainly you've had explained to you (ad nauseam) the difference between wages and income yet you still don't understand it.Actually it's you (again) that doesn't understand,.... not everyone works for someone else or fits into your narrow minded box.
Perhaps you could share your wisdom with the author of the bill(have you ever read it?)
It seems, by your standards he doesn't understand either...because he wrote this into the law, requiring me to report my INCOME....and others to report their "wages"...I guess he's a real dunce huh!?
``SEC. 903. WAGES TO BE REPORTED TO SOCIAL SECURITY ADMINISTRATION.As I have told you I don't have "wages", I am self employed and my SS is based on my income not my "wages" and BTW I do my own taxes so I know exactly what I pay into SS and from what it is calculated...and it ain't "wages"...hence, I don't think they'll be destroying the very information they are requiring me to report.(a) IN GENERAL- Employers shall submit such information to the Social Security Administration as is required by the Social Security Administration to calculate social security benefits under title II of the Social Security Act, including wages paid, in a form prescribed by the Secretary. A copy of the employer submission to the Social Security Administration relating to each employee shall be provided to each employee by the employer.
`(b) WAGES- For purposes of this section, the term `wages' means all cash remuneration for employment (including tips to an employee by third parties provided that the employer or employee maintains records documenting such tips) including self-employment income; except that such term shall not include--
`(1) any insurance benefits received (including death benefits);
`(2) pension or annuity benefits received;
`(3) tips received by an employee over $5,000 per year; and
`(4) benefits received under a government entitlement program (including social security benefits and unemployment compensation benefits).
`(c) SELF-EMPLOYMENT INCOME- For purposes of subsection (b), the term `self-employment income' means gross payments received for taxable property or services minus the sum of-- `(1) gross payments made for taxable property or services (without regard to whether tax was paid pursuant to section 101 on such taxable property or services), and
`(2) wages paid by the self-employed person to employees of the self-employed person.
Who doesn't understand that??....YOU!
Chief, Pigdog, Principled
Stay cool and stay with the facts.
I can understand your frustration at some of the postings on this subject, but you must refrain from making comments that drop your responses down to the "personal" level.
Remember, lots of eyes see these threads, and it is professional, fact based responses, that convince those who are trying to make sense out of the various tax proposals.
If your responses stray down the "let's get personal" path, it can cause some readers to view the thread as a food fight and leave.
That doesn't serve your purposes (or mine, as I am one of those trying to understand all the pros and cons).
BTW, most of your posts on the various threads do manage to stay on target with the facts.
Want a new bleeding heart program? Raise the sales tax, let everyone see exactly what it costs. You would see government waste disappear almost overnight due to irrate citizen participation
Yeah! there is absolutely NO Government waste in any state with a sales tax...no bleeding heart programs either...oh yeah, you forgot to mention the best part, that some states with a sales tax also have an INCOME TAX....It really pays to be an irrate citizen doesn't it?
The income tax is eliminated by HB2525. But lurkey, only a constitutional amendment can outlaw income tax. Since HB2525 is a bill, not an amendment, how could it repeal the 16th?
You're asking the wrong person...you should be asking pigdog or ChiefNegotiator, at any rate I am not the one that makes the fraudulent claim.
Elimination of the current income tax code. Passage of legislation that institutes a single rate, FairTaxSM on all final sales of new goods and services. This tax would become the chief source of revenue for the United States government, replacing the federal income and payroll taxes on a revenue-neutral basis for the first year. The legislation provides for a universal rebate equal to the sales tax paid on essential goods and services. The rebate ensures that no American will pay tax on the purchase of necessities. Taxpayers will pay taxes only on their discretionary purchases: not on their income and earnings and not on what they produce. A constitutional amendment that would repeal the 16th Amendment and make a federal income tax unconstitutional. This will eliminate the danger of having both a FairTax and an income tax.(It's not in the legislative language...it's a fraudulent lie.) The bill only does 2 of the 3 actions...the last one is a lie.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
The FairTaxSM is a national retail sales tax on new goods and services at the final point of sale for personal consumption above the poverty level. Used goods are not taxed.
The FairTax is the best choice for all Americans. It will eliminate the complexity and injustice of our current system entirely by repealing the federal income tax and all federal payroll taxes. The FairTax will replace them with a simple 23% federal retail sales tax on new goods and services.
No, George isn't a socialist, George is a "character." We are all "characters" to some degree, it's just that George seems a bit more so than most. You all will have to stop picking on George, because I like him.
--To: Petunia
Huh?--
Goodness, you guys are slow today. Have a bad Monday?
What Petunia said, is that in order to keep our republic, the IRS has to go. She further said the sales tax is the way to get rid of the IRS, and she characterized people who favor the income tax and the IRS as Nazis.
In other words, you just gained a new ally, and all you responded was "huh." Let's get on the ball here.
The one reason I support some form of national sales tax is:
Everyone pays something. Criminals, Illegal Aliens, everybody.
The present system IS so unfair.
No, Mr. Gunn is certainly no fool.
The same amount of time it takes to post empty, contentious remarks can be better spent posting facts which are readily available. The Thomas link you posted to HR2525 is to a table of contents page. (Well done on that link, by the way. I discovered I didn't have the bill itself bookmarked, and I used your link to do so.) Section 103 of the bill is RULES RELATING TO COLLECTION AND REMITTANCE OF TAX. Mr. Gunn's very reasonable concerns about individual audits can be allayed by pointing to that section of the bill, where the rule is that the seller, not the buyer, is the one obligated to remit the tax amount to the government, in most cases. As the bill is written, even if an audit of a buyer happened to occur for some unusual reason, it could not generally result in the buyer being obligated to make any payment, since that obligation rests on the seller.
It's fine to encourage others to read the bill, and other materials, but it's also entirely reasonable to expect advocates to know something about what they're doing, and to have some facts available in response to specific concerns.
I can't load all of this thread....or another long one, so I can't read pigdog or your last posts to me. I'll try another computer later if I can.
--Now, the proof of your tax payments is in your income statements. Under your system, no such convenience. Today if the IRS comes to your home and determines that you have more goods than you could afford to earn, they ask you to prove it. IF they say so, you owe, and maybe you go to jail in Leavenworth.--
The Fair Tax advocates seem a bit slow to post facts recently. Maybe it's the change in the weather, or the distraction of the colors of the autumn leaves. They should have posted the following to you immediately.
Generally, the seller, not the retail buyer, is liable to collect and remit the tax amount to government. Even if an audit of a buyer happened to occur for some unusual reason, it would not likely involve a financial obligation on the part of the buyer, in the ordinary course of events. An inquiry of a buyer might possibly be made in connection with a seller's failure to meet his liability, I suppose.
In the matter of audits, Section 508 of the bill states, "
`(b) EXAMINATIONS AND AUDITS- The sales tax administering authority has the authority to conduct at a reasonable time and place examinations and audits of persons who are or may be liable to collect and remit tax imposed by this subtitle and to examine the books, papers, records, or other data of such persons which may be relevant or material to the determination of tax due."
The persons generally liable to "collect and remit" the tax are sellers, so the audit provision is for sellers.
The penalties are given in section 505. The criminal penalties are for willful or reckless failure to collect or remit the tax, on the part of the seller, or a fraudulent claim of exemption by the buyer.
Cases where the liability devolves to the buyer, are where it's impossible or impractical to expect the seller to remit the amount, or where the seller has made an honest mistake in failing to collect the amount, or where business property is converted to personal use, and similarly. As follows.
-=-=-=-
H.R.2525
Fair Tax Act of 1999 (Introduced in the House)
`SEC. 103. RULES RELATING TO COLLECTION AND REMITTANCE OF TAX.
`(a) LIABILITY FOR COLLECTION AND REMITTANCE OF THE TAX- Except as provided otherwise by this section, any tax imposed by this subtitle shall be collected and remitted by the seller of taxable property or services (including financial intermediation services).
`(b) TAX TO BE REMITTED BY PURCHASER IN CERTAIN CIRCUMSTANCES-
`(1) IN GENERAL- In the case of taxable property or services purchased outside of the United States and imported into the United States for use or consumption in the United States, the purchaser shall remit the tax imposed by section 101.
`(2) CERTAIN WAGES OR SALARY- In the case of wages or salary paid by a taxable employer which are taxable services, the employer shall remit the tax imposed by section 101.
`(c) CONVERSION OF BUSINESS OR EXPORT PROPERTY OR SERVICES- Property or services purchased for a business purpose in a trade or business or for export (sold untaxed pursuant to section 102(a)) that is subsequently converted to personal use shall be deemed purchased at the time of conversion and shall be subject to the tax imposed by section 101 at the fair market value of the converted property as of the date of conversion. The tax shall be due as if the property had been sold at the fair market value during the month of conversion. The person using or consuming the converted property is liable for and shall remit the tax.
`(d) SELLER RELIEVED OF LIABILITY IN CERTAIN CASES- In the case of any taxable property or service which is sold untaxed pursuant to section 102(a), the seller shall be relieved of the duty to collect and remit the tax imposed under section 101 on such purchase if the seller--
`(1) received in good faith, and retains on file for the period set forth in section 509, a copy of a registration certificate from the purchaser, and
`(2) did not, at the time of sale, have reasonable cause to believe that the buyer was not registered pursuant to section 502.
`(e) PURCHASER LIABLE TO COLLECT AND REMIT IN CERTAIN CASES- In the case of any taxable property or service which is sold untaxed pursuant to section 102, if the seller is relieved by reason of subsection (d) of the duty to collect and remit the tax imposed by section 101, then the duty to pay any tax due shall rest with the purchaser.
`(f) BARTER TRANSACTIONS- If gross payment for taxable property or services is made in other than money, then the person responsible for collecting and remitting the tax shall remit the tax to the sales tax administering authority in money as if gross payment had been made in money at the tax inclusive fair market value of the taxable property or services purchased.
`(g) INTERCOMPANY SALES- Firms that make purchases from affiliated firms that are untaxed pursuant to section 102, or make sales to affiliated firms that are untaxed pursuant to section 102, shall not need to comply with the requirements of subsection (d) (relating to certificates) for said purchases or sales to remain untaxed.
=-=-=-=
Since you three are pretty much all on the same collective page, I'll answer you in one collective response, here...
(Funny how all three of you were also on the same page in my Federal Reserve article, declaring the Fed an institution that secretly loads up bales of cash every night in the dark of the wee hours and ships it off to its reputed Old World masters --- heh, heh, heh --- the 3 Musketeers of misinformed and kooky economic inanities?)
Are you still with us, or have you finally realized how preposterous your misinformed miscalculations have mistated the facts?
128 Posted on 10/11/1999 17:05:32 PDT by CHIEF negotiator
Gee, CHIEF, sorry I hurt your feelings and all. Hate it when you get lonely, poor girl. No, I don't live on Free Republic (Except maybe on weekends); I do have other things to attend to throughout the day.
Let's take a look at the "arguments".
Are you deaf ... The NRST is an excise!!!. Do I need to keep repeating this until you hear it?
92 Posted on 10/11/1999 13:29:18 PDT by pigdog
Shouting won't make it true, piglet. The National Sales Tax is not a Specific, Fixed, Absolute charge on a particular commodity. It is not an excise. It is not a Constitutionally Enumerated Tax. Wail all you like, but that won't make it so.
Here is what my 1997 Webster's says:
ex-cise (ek'siz)-n 1. an internal tax or duty on certain commodities, as liquor or tobacco, levied on their manufacture, sale, or consumption within the country. 2. a fee imposed for a license to pursue certain sports, occupations, etc.--v.t. to impose an excise on. --ex'cis-a-ble. adj.
Well, boys and girls, that pretty much covers it.
96 Posted on 10/11/1999 13:43:57 PDT by CHIEF negotiator
Choosing a more expansive definition to worm your way into the "penumbra" of the Constitution is a tried-and-true Liberal tactic, and you've made a good go at it here, CHIEF. But, regrettably for the National Sales Tax, your definition still speaks of "certain" (i.e., particular) commodities; even your examples (liquor and tobacco) are particular commodities which are specifically excise-taxed on a fixed per-unit of quantity basis. Excises are specific, fixed, absolute charges on a particular commodity. That's what was meant when the Constitution was written; that's what they were in the Whiskey Rebellion; That's what they've always been and is how they are understood today.
The National Sales Tax is NOT a specific, fixed, absolute charge on a particular commodity. It is not an Excise. It is not Constitutional.
What you've quoted is merely a statement that the language of the 16th Amendment removes income tax from needing to meet a test of uniformity, as a particular income tax had been in the Pollock decision due to the tax's relation to real estate. It is not a statement that excises, duties and imposts are the only possibilities for indirect taxation.
135 Posted on 10/11/1999 17:29:53 PDT by Red Redwine
Whooo - Hoo!!! This just keeps getting better! CHIEF and Pigdog think that the National Sales Tax is an Excise, Red Redwine thinks that it is not, but he wants to try and get away with it anyway on the grounds that "(whimper, simper) well, the Constitution doesn't say we can't do it..." Again, the tried-and-true Liberal tactic of taking an expansive interpretation of the Constitution until nearly anything may be fabricated... I mean, found... in it's "penumbra".
But which is it, folks? An Excise, like CHIEF and pigdog say, or some other type of Indirect Tax, like Red says?
HAHAHAHAHAHA! I'm laughing at the confusion in the Sales Tax ranks!
Sorry, Red, but that isn't going to work. The Supreme Court very clearly defined Constitutional Taxes as belonging to two "classes" - the Class of Excises, Duties, and Imposts, and the Class of Direct Taxes. If a Tax does not fall into one of these two Classes, it is not Constitutionally Enumerated. The National Sales Tax does not. It is not a Constitutional Tax.
The National Sales Tax is
Not an Excise
Not a Duty
Not an Impost
Not a Census-Apportioned Direct Tax
It is not a Constitionally Enumerated Tax. It is therefore Not Constitutional.
Well, the Market's about to open; I'll check back later.
Read it again...
Again I ask you, what ITEMS/GOODS can not be considered a "commodity"? Be specific, now.
Let me get this straight...you claim that the FairTax is unconstitutional because you believe that a sales tax on new goods and services are not an "excise" tax.
You have been given the definition of "excise", meaning a tax on certain commodities, yet you claim that new goods and services can not be considered a "certain commodity".
The FairTax includes taxation on new goods and services and excludes used goods. So if your basis of unconstitutionality rides on this assumption, you have made a very weak case.
You should have titled this thread:
Dirty Little Lies About The FairTax
The taxpayer that is the subject of this part of HR2525 is the particular retail merchant collecting the sales tax and not the everyday common taxpayer working for a living. Your apparent paranoia at having your home invaded by jack-booted thugs demanding "proof" you bought something is ridiculous. You are thinking of what the IRS can and does do right now. Read the bill more carefully!
Also, instead of recognizing my comment about keeping your receipts if you were concerned about having no records and being audited even though you were not a tax-collecting merchant, you instead chose to ignore that and respond to my next reply and warp back into "having no records at all". That's not the discussion - if that's your concern as I said you can keep your sales receipts. The discussion was triggered by your thinking an income statement was somehow "proof" of something to the IRS - it isn't.
Little Willie is "The Worst President In American History."
The whole reason behind the National Sales Tax is that it is one of the few taxes that the individual can control. If I don't want to pay the 23% tax, I will grow a garden for food and cut back on consumption. Make my own clothes. Ride a bike. Etc. The current slave tax is almost outside the individual's control. I'd rather have the freedom to choose.
This just makes too much common sense to ever see the light of day!!!
Congratulations on another Grand Slam!!
The only people who are against the NRST are those who are so addicted to their current tax breaks that they are afraid they can't survive without them.
Anybody who is afraid the NRST won't raise enough revenue needs to move to China where you can get all the government you want!!
God bless you all, little darlings, I don't mean to be short with youBUT, there's something fundamental your missin'"
--(Funny how all three of you were also on the same page in my Federal Reserve article, ...--
Federal Reserve article? Now what are you babbling about?
In regard to what an excise is, you need to take a look at Supreme Court decisions and previous laws of Congress. Those are certainly more pertinent to this discussion than a brief description from a general dictionary. You'll find SC quotes relating "excise" to "the quantity of business done," for example.
One notable case in this connection would be National Bank v. U. S., where an indirect tax was levied as a percentage on a broad category of items, bank notes, and upheld by the Court.
A more recent case is U.S. v. Wells Fargo Bank (1988), where the Court wrote:
"Well before the Housing Act was passed, an exemption of property from all taxation had an understood meaning: the property was exempt from direct taxation, but certain privileges of ownership, such as the right to transfer the property, could be taxed. Underlying this doctrine is the distinction between an excise tax, which is levied upon the use or transfer of property even though it might be measured by the property's value, and a tax levied upon the property itself. The former has historically been permitted even where the latter has been constitutionally or statutorily forbidden."
Emphasis added.
Consider also Dickman v. Commissioner (1984), which contains the following:
"This contention misses the mark. It is certainly true that no law requires an individual to invest his property in an income-producing fashion, just as no law demands that a transferor charge interest or rent for the use of money or other property. An individual may, without incurring the gift tax, squander money, conceal it under a mattress, or otherwise waste its use value by failing to invest it. Such acts of consumption have nothing to do with lending money at no interest. The gift tax is an excise tax on transfers of property; ..."
Again, emphasis added. The gift tax is under the IRS code, 26 USC 2001, and is computed as a percentage on gifts in general above a certain value. We see that even though it's computed as a percentage, and on a general category rather than any particular item, the Court plainly refers to it as an "excise tax." And that's as recently as 1984.
--What you quoted is merely a statement that the language of the 16th Amendment removes income tax from needing to meet a test of uniformity, ...
Whooo - Hoo!!!-- [followed by additional babble]
Uriel, you were wrong. What you posted did not prove that excises, imposts and duties are the only possible indirect taxes, as you had incorrectly claimed. You didn't understand the quote that you, yourself, posted, that's all.
--Red Redwine thinks that it is not, ...--
Uriel, you're wrong again. Did you somehow miss the Marshall quote? Or did you just not realize what it meant?
--... The Supreme Court very clearly defined Constitutional Taxes as belonging to two "classes" - the Class of Excises, Duties, and Imposts, and the Class of Direct Taxes. ...--
Not true. You're only demonstrating is your own lack of knowledge. For one thing, in recent cases involving GATT, the Court has explicitly placed State sales taxes in the same category of "indirect taxes" as federal excise taxes. But of course you don't understand why I mention that, or what it means.
At least you've given up on the silly idea of U.S. taxation somehow violating the commerce clause, so I guess that's a degree of progress.
And if anybody out there doesn't support the switch to sales tax, I dare you to read through the income tax case law. It'll make a believer out of you.
I wrote this article just for you:
Interest Free Banking and no Taxes!!!
Once I saw Robert S. McIntyre's name, I knew I had the response somewhere in my bookmarks--it just took some time to find it.
I'll play your word game. You wrote:
1. Elimination of the current income tax code.
2. Passage of legislation that institutes a single rate, FairTaxSM on all final sales of new goods and services. This tax would become the chief source of revenue for the United States government, replacing the federal income and payroll taxes on a revenue-neutral basis for the first year. The legislation provides for a universal rebate equal to the sales tax paid on essential goods and services. The rebate ensures that no American will pay tax on the purchase of necessities. Taxpayers will pay taxes only on their discretionary purchases: not on their income and earnings and not on what they produce.
3. A constitutional amendment that would repeal the 16th Amendment and make a federal income tax unconstitutional. This will eliminate the danger of having both a FairTax and an income tax.(It's not in the legislative language...it's a fraudulent lie.)
The bill only does 2 of the 3 actions...the last one is a lie."
THE BILL does not eliminate the current income tax code. THE BILL does not tax new goods and services. And finally THE BILL does not repeal the 16th Amendment!
So you have to ask yourself Lurkey, if THE BILL doesn't do any of these 3 things, what needs to happen next to accomplish all three?
An inquiry of a buyer might possibly be made in connection with a seller's failure to meet his liability, I suppose.
You got it.
Do you feel lucky?
The discussion was triggered by your thinking an income statement was somehow "proof" of something to the IRS - it isn't
Doesn't matter.
This flat tax thing is just a gorilla in a pigsuit with a red dress on, and you guys a succor for a red dress.
Once upon a time (another fairy tale) nothing was simpler, sweeter and shorter than the income tax. What happened? I guess you forgot. My point does not change. The gorilla is still gonna sit anywhere it wants in the bar.
A simple tax is one that most people will go nuts over to try and beat. Even if you could get the thing past Congress without a zillion changes, before you know it will be so full of all the same crap that you won't know the difference, and I think it would be far worse.
I also guarantee that I would have more to gain from the change than anyone else. There is no way this thing could ever hope to float without paying some major respect to the vested monied interests. I don't endorse it because we got enough problems already in this country.
Anything you think this thing says now, will be swiss cheese on the other side of Congress and you know it in your heart. When I read it, I just see all the feet in the door for all the same stuff everybody wants to come pouring back in. The more things change, the more it stays the same.
Well, lurkerbee, if I really felt you wanted to learn about the subject, I would tell you that "self-employment income" is the equivalent of "wages" in the more common employment/employee situation. As such, "self-employment income" (just like "wages") in no wise covers all your income - just a specific part of it which is the wage-equivalent. If you had interest, dividends, capital gains, etc. (which, as stated in the bill, are NOT taxable property or services) these would be part of your income but not your self-employment income.
Therefore what you report to the SSA is your "self-employment income" (a specific subset of your income, just as wages would be were you employed by someone else), not your income.
Since I realize that your mission in life is to try to promote the flat-VAT income tax by attacking the NRST and trying desperately to fine someone to accuse of "lying", I don't think I'll waste the time. Perhaps others are interested, though, so I won't let your mischaracterizations pass uncommented.
Little Willie is "The Worst President In American History."
"I don't endorse it because we got enough problems already in this country."
What does that have to do with a better, less intrusive way to fund the gvmnt?
You're really splitting hairs, lurkeylou (formerly known as lousbolts (formerly known as lewislynn)). And doesn't a double negative ("... fraudulent lie ...") make a positive (i.e., the truth)?
In any event you are letting your aching desire to call someone, anyone a "liar" run away with your good sense. You know that the legislation calls for the repeal of the 16th and you also know (or certainly should since you've been reminded of it time and again) that a law passed by congress cannot repeal the amendment but only start the process.
I believe most people know that and most people also realize that is also what the FairTax site is trying to get across. Certainly it could have gone to great length (several paragraphs, if fact) outlining the exact procedure and making a disclaimer that its announcement in and of itself was not ... etc. etc. But surely you get the idea. There is overkill and overkill. I can see no rational reason for them to go into extreme, everlasting details just to satisfy your urge - and if they did, then you'd have to find something else to cry "lie" about (as you've done repeatedly before).
Did you ever read the story of the little boy who cried "wolf"???
Little Willie is "The Worst President In American History."
TYVM, Petunia, glad to have you on board!
Little Willie is "The Worst President In American History."
Lurkey thinks that in every bill Congressmen should be instructed as to the necessary steps that must be taken to pass and inact the bill. What he doesn't realize is that the first course taken after they were elected was CongressCritter 101.
George has been around off and on for many, many of these over 100 Tax Reform Threads, so he has ample opportunity to learn and/or project his philosophies. He has done more of the latter than the former, I'm afraid.
I'm not sure wat you mean by "picking" on him, but indeed he is the one who several times on past threads (and even recent ones) that has seriously advocated hanging income tax non-compliers (he seems to be a flat-VAT income tax supporter). Also he has spouted very class-warrior-like sayings that seem very much like our German-born friend Karl Marx. That is where my appellation Karl Frm Gorky Park originated. If that is what you mean by picking on him, it is indeed a very soft form of picking occasioned by his own behavior.
Little Willie is "The Worst President In American History."
Right you are!
Little Willie is "The Worst President In American History."
In addition to your comments, Red Redwine, the buyer having paid the sales tax and obtained the receipt is exempt from the tax liability according to the bill.
Little Willie is "The Worst President In American History."
Announcment from American for Fair Taxation:
Please e-mail when you get a moment to the editor of the COSE update, Edward Walsh (ed@vantageone.com) and thank them for their willingness to come out formally and endorse the FairTax. COSE is exactly the kind of organization we need to send a strong message to Congress that small business supports the enactment of the FairTax!
A note on COSE ....
The Council of Smaller Enterprises (COSE) is the small business division of the Greater Cleveland Growth Association. With more than 15,800 members, COSE is the largest small business organization in the United States. COSE is a volunteer-driven organization with over 700 northeast Ohio business people sharing their expertise and experience. Business owners participate in the organization's leadership, assist other small business owners in counseling sessions, and contribute to the development of business management education programs.
Inc. magazine has rated COSE as "the nation's best entrepreneurial-support program." Other sources now recognize COSE as the country's leading services and advocacy organization for small business.
Please e-mail COSE when you get a moment and thank them for their willingness to come out formally and endorse the FairTax. COSE is exactly the kind of organization we need to send a strong message to Congress that the American Public supports the enactment of the FairTax!
Thanks again for all your help!"
We're making headway folks!
Thanks for the post and great explanation. I've somehow gotten on someone's list..have no idea who they are, but this is what they're sending out..
Subj: New Developments In Congress
Date: 10/11/1999 11:18:34 AM Eastern Daylight Time
From: AFTCyber@um5.revnetexpress.net (AFTCyber)
To: MTaylor603@aol.com
The FairTax Act of 1999 added 4 new sponsors in the United States House of Representatives!!!!!!!!!
Rep Barcia, James A. (D-MI) - 09/08/99
Rep Campbell, Tom (R-CA) - 09/08/99
Rep Hall, Ralph M. (D-TX) - 09/14/99
Rep Bonilla, Henry (R-TX) - 09/14/99
Please be sure to contact your Congressman and ask when he or she plans to co-sign the FairTax legislation and make history!!!
Thanks again to all who have been doing so much to make this happen.
Just received this one while reading your post. (Had asked to be taken off their list..NOT done)
Subj: New Endorsement From Cleveland
Date: 10/12/1999 3:30:17 PM Eastern Daylight Time
From: AFTCyber@um5.revnetexpress.net (AFTCyber)
To: MTaylor603@aol.com
This morning, the Council of Smaller Enterprises (COSE) in Cleveland, Ohio officially endorsed the FairTax. COSE, with 16,000 small business members,is the largest local small business organization in the country!
Please e-mail when you get a moment to the editor of the COSE update, Edward Walsh (ed@vantageone.com) and thank them for their willingness to come out formally and endorse the FairTax. COSE is exactly the kind of organization we need to send a strong message to Congress that small business supports the enactment of the FairTax!
A note on COSE ....
The Council of Smaller Enterprises (COSE) is the small business division of the Greater Cleveland Growth Association. With more than 15,800 members, COSE is the largest small business organization in the United States. COSE is a volunteer-driven organization with over 700 northeast Ohio business people sharing their expertise and experience. Business owners participate in the organization's leadership, assist other small business owners in counseling sessions, and contribute to the development of business management education programs.
Inc. magazine has rated COSE as "the nation's best entrepreneurial-support program." Other sources now recognize COSE as the country's leading services and advocacy organization for small business.
Please e-mail COSE when you get a moment and thank them for their willingness to come out formally and endorse the FairTax. COSE is exactly the kind of organization we need to send a strong message to Congress that the American Public supports the enactment of the FairTax!
Thanks again for all your help!
Luck really has nothing to do with it, James Gunn. The buyer is relieved of the tax liability if he has paid the tax and received the receipt and it says so in the bill.
If your concern is as you state, you can certainly keep your recepts as I said previously. The seller, OTOH, is required to retain the receipt information for 6 years.
Your scare tactics are misplaced - you are only scaring yourself unnecessarily.
Hold off on EMailing to Walsh...it didn't work, but have notified them.
If you would like to learn more about getting the IRS out of every aspect of your life, check out these links:
23 Reasons to Support a 23% "Fair Tax"
"Tiptoe Through The Tax code Tinkering Tango"
Flat tax??? I'm not talking about a flat tax.
You're right in that the present income tax started as something quite different that what it is today. That goes to show you what happens when voters let the politicians and lobbyists run amok with no adult supervision. The only way back to something sensible is fundamental tax reform by means of the NRST and continued voter vigilance along with outlawing income taxes.
Quite the opposite of what you say, it is not the simple tax that people "go nuts over to try and beat" but the tax that is complex, warped, and quite obviously treats people differently in addition to having a high tax rate. That situation is what we have today and will have even with the flat-VAT income tax.
Unlike you, I believe the FairTax will become the tax law of the land and pretty much in its present form. There are many who understand what happens when the special interests get their nose under the tent ro try to introduce changes and exceptions for themselves. I do not believe that will be allowed to happen.
Little Willie is "The Worst President In American History."
Thanks CHIEF,
If you really liked it, I could use your help also. You seem to hold quite a bit of influence around here,so I would like to invite you to visit my web site and review it. If you like what you read, e-mail me with a way to get in touch with you. I think we can help each other. I will be back online tonight about 11:00 pm Atlanta time.
thanks,
little man in a big world
http://wwwmandateit.com
G'Day James Gunn. I am posting to you to apologize for my poor behavior last night. I apologize for calling you a fool.
I do think that some of your posts were foolish, but that in no way makes you a fool. Again, my apologies.
I was tired, the wife's been gone...yadda yadda and I kept being hit with the "Fair-Taxer" name, or "advocate" of Fair Tax. To be sure, I am not blindly loyal to any tax plan. I have, however, discovered that the Fair Tax is the best alternative of all the plans I've been exposed to. I am anxious to be presented with another viable tax plan that would be better. Although ALL tax plans are bad, and ALL tax plans have problems, the Fair Tax is the best alternative in my eyes, so when I hear of an objection, I want to understand it, particularly if it means that there is another, better plan. Usually, after some conversation, I discover the objection; I then research the bill and respond. Last night, I became frustrated that I could not understand your assertions, and felt that you were unable to cogently discuss the bill due to a lack of knowledge of the bill. Please accept my apologies.
BTW I am still waiting for a better alternative....all plans have problems, but the Fair Tax is the best alternative. So from my point of view, pointing out flaws in the fair tax is a non-starter unless it can be shown to me that the flaw creates a better choice of tax plan.
Sorry 'bout the "Fed" comment, Red, had you confused with "RainingRed".
Red, the fact that State Sales taxes are an indirect tax does the Taxing Power of the Federal Government no good. The States are not constrained to enacting Constitutionally Enumerated Taxes; the Federal Government is so constrained. The Court has defined Constitutionally Enumerated taxes as being of two Classes: Direct Taxes, and Excises, Duties, and Imposts. Likewise, the Court's defining the Gift Tax as an Excise only serves to reinforce the presumption that Taxes must be either Excises, Duties, and Imposts -- or Direct Taxes. No other methodologies are enumerated.
Regarding the Commerce point, I'm far from conceding the point, I'm merely despairing of contesting your misinterpretation. When the National Sales Tax has the effect of interposing the Taxing Power of the Federal Government into transactions between one man and another within the boundaries of a sovereign State, I'll sit back and watch as the Strict Constitutionalists in the Patriot movement take it to the Supreme Court as an overstepping of bounds on the part of the Federal Taxing Power... somewhat analogous to the prohibition of the Taxing Power in matters of intrastate governmental finance.
And CHIEF, as Red himself has said, Repitition will not win your point. The issue is not whether the National Sales tax is a tax on commodities, but the fact that Excises are specific, fixed, absolute charges on particular commodities... like your own example of tobacco and alcohol. These are fine examples of what Excises are -- specific taxes on particular, individual types of commodities. The National Sales Tax, a general, non-specific, universal and all pervasive tax, is no such thing.
In the end, the question, gentlemen, is not whether or not supporters of the National Sales Tax like yourselves will contest the Constitutional Problems that the National Sales tax suffers from. Of course you will...
The issue is far more serious for the National Sales tax's prospects:
Even among Conservatives, it is rightly distrusted as "another Washington tax scam" --- thanks to max61 for the very first response on this thread. So even among the 30% of the Nation's populace that is unabashedly Conservative, support for this foolhardy tax is tepid at best.
Continue consideration with the realization that the National Sales Tax will never make it past the voting bloc in the House of Democrats, Liberal Republicans, and those Conservatives who will immediately circular file this bill as long as the 16th amendment is on the books, still a danger.
Continue consideration further with the fact that it is a virtual impossibility that the National Sales Tax would ever make it past a Democrat-Liberal Republican filibuster in the Senate. Just won't happen.
And further, would die a quick death under the veto pen of a president Gore, Bradley, or Bush.
And lastly, even allowing for the assinine assumption that a National Sales Tax would ever make it on to the books, it will immediately face a challenge from the Strict Constitutionalists in the Patriot/Tax Freedom movement who will quite rightly point out that there is zero Constitutionally Enumerated authority for such a tax.
But even all the above, five-course legal stranglehold on the prospects of the National Sales tax that it is, is - in the end - a critique of that which is already unthinkable. Unthinkable, for the simple reason that if this Tax ever made it past the fantasies of its supporters and into public consideration, the realization of the American Public that the National Sales Tax represents a 30% surcharge... no, given the fact that Government purchases (20-25% of GDP) won't generate any sales tax, they'll be paid for by sales taxes, make that 42%... no, unless you extend the National Sales Tax to previously untaxed areas, make that 56%... when the American public even contemplates a 42 to 56% surcharge on new retail purchases, the National Sales Tax will never see the light of day.
Thus, when it all comes down, the National Sales tax is a pipe dream. And that's good... because, after all, The National Sales Tax is
Not an Excise
Not a Duty
Not an Impost
Not a Census-Apportioned Direct Tax
It is not a Constitionally Enumerated Tax. It is therefore Not Constitutional.
"And CHIEF, as Red himself has said, Repitition will not win your point."
I believe YOU are the one repeating yourself!
"The issue is not whether the National Sales tax is a tax on commodities, but the fact that Excises are specific, fixed, absolute charges on particular commodities... like your own example of tobacco and alcohol. These are fine examples of what Excises are -- specific taxes on particular, individual types of commodities. The National Sales Tax, a general, non-specific, universal and all pervasive tax, is no such thing."
We all agree that "Excise taxes" are a tax on certain/specific/particular commodities. The certain/specific/particular commodities the FairTax taxes are NEW goods and services, excluding used (priviously taxed) goods. Why the hell can't you see this?
In order to prove your point, you will have to throughly convince all of us that NEW goods and services do not constitute certain/specific/particular commodities when other certain/specific/particular commodities (used goods) are not taxed. By definition...new goods and services are "certain/specific/particular commodities". Whew...
I feel like I'm beating my head against the wall with your failure to comprehend.
You have the floor...
It is not a Constitionally Enumerated Tax. It is therefore Not Constitutional.
And our current system is? There seems to be some question as to whether the current system was ever ratified or not.
Warhawk42
"30% surcharge"???
I see you never bothered to read the posts that stipulate the difference between "tax inclusive" and "tax exclusive".
Max 61 is as uninformed as you are about the FairTax. At least he kept his uninformed opinion to one sentence: "The NRST is a Washington based tax scam".
BTW...The FairTax NRST is based in Houston, TX. and is anything but a scam. The "scam" is people like you that don't have a clue and spout uninformed opinions on a proposal they obviously haven't spent much time studying.
Do we take it then Uriel1975 that you are somewhat opposed to the idea of the NRST?
Despite your wishful palaver, the sales tax remains an excise tax. Your own dictionary definition that you repetitively quote and then misinterpret clearly shows this to be true. The fact that you cannot correctly interpret the dictionary definition is your fault and not mine. The definition in several dictionaries is not in accord with what you wish it to be no matter how you drone on repeating the same incorrect refrain.
Several on this thread have tried to dissuade you from the viewpoint you are trying to establish but you obviously wish to persist in saying of your own interpretation "... it's my way or the highway ...". Well Uriel1975, your interpretation is certainly not the only meaning those words have, not by a long shot. They more clearly mean just the opposite of what you are trying so desperately to push.
The numbers you present are completely bogus as well and it seems as though your main intention is to try to scare those who have little knowledge of the NRST by making such outlandish claims.
In any case, it doesn't matter what you or I think about it. We're not the Supreme Court. Since you believe you and your like-minded friends will mount some sort of serious constitutional challenge to the NRST once enacted, BE MY GUEST - and by all means, spend every cent you have on the effort. Go for it.
In the end it will end up that the NRST is both an excise tax and constitutional. In fact, it probably doesn't even have to be an excise tax (that also is just your interpretation which is unlikely to be any better than your dictionary interpretation).
If the FairTax is so unlikely to become law since no one supports it, why are you so worried about it?
Little Willie is "The Worst President In American History."
Thank you! Gads, there is so much to learn or try to figure out..I would feel much better about all this if the IRS were shut down totally for at least a year before any new tax was imposed. Actually, I'm so sick and confused by it all that I'd be happier to never hear the word again. Of course the Federal Reserve who collects all the IRS (as I understand it) will probably never allow anything to interfere with their revenue.
--An inquiry of a buyer might possibly be made in connection with a seller's failure to meet his liability, I suppose.
You got it.--
I've pointed out to you that the audit provision of the Fair Tax bill is for sellers, not buyers as you had erroneously suspected.
Got it?
--Do you feel lucky?--
I don't feel lucky when my correspondents act dishonest or stupid, or let their egos get in the way of the truth.
I understand how you feel. I certainly do. But I think getting rid of the direct taxation that we have (and the IRS) is well worth the effort. If you have time to read only one paper that explains the reasoning behing the NRST plans, I'd suggest you read this one. It's well worth the time.
Little Willie is "The Worst President In American History."
My problem wih taxes at every level is that they continually increase and often do so insidiously, hiding under the name of "fees," "highway and road upkeep," "airport construction," "Gore's computer/telephone fee," and lately a new one: "vehicle fee alignment." I have counted 16 different taxes I now pay and together they add up to more than 55% of my retirement income.
I cannot imagine anything could be worse than the present incomprehensible income tax code, the IRS and the multitude of hidden and concealed taxes we all pay. How long will it be until we reach the level of 80% of our incomes paid in taxes and fees?
I fear that Americans are either asleep or dumbed down too far to realize we are soon to be taxed into oblivion by the socialists now in power.
That's one of the resons it would be helpful to begin to get at least the major taxes out in the open and visible so people would begin to put pressure on congress to cut spending.
With the FairTax, the tax amount is clearly visible to all and there are no favorites or special interests getting "special deals" - all pay the same rate. Low- or no-income folks get a rebate so that they aren't clobbered by the tax, but they still pay the same rate as everyone else.
People have got to wake up and realize that ALL the hidden taxes are one of the big reasons things are so expensive today. A typical refrain we hear in these Tax Reform Threads is "... 23%? That's too high ..." People say this without realizing they are paying more than that right now with the equivalent taxes - income, payroll, and hidden VAT taxes caused by direct taxation.
Little Willie is "The Worst President In American History."
--... The Court has defined Constitutionally Enumerated taxes as being of two Classes: Direct Taxes, and Excises, Duties, and Imposts. ...--
No, they haven't. The Court has described U.S. taxes in various ways in the course of discussion, and has categorized taxes for legal purposes, and has used many different terms, but has never undertaken to define U.S. taxes as you assert. The major reason for rejecting that notion, is that the Court has explicitly upheld that it doesn't matter what a tax is called, what matters is the nature of the tax. Since the Court has ruled it doesn't matter what a tax is named, I see no possibility those particular words have been adopted as definitional. Additionally, the Court has frequently pointed out that the writers of the Constitution never undertook to define exactly what they meant by "direct tax" or other terms and therefore the meaning must be inferred. That being the case, it's difficult to see how the Court could have adopted the words as definitional, after openly stating on numerous occasions they weren't clearly defined in the first place. A definition based on words which are themselves not clearly defined would serve no functional purpose.
If by "defined" you simply mean "categorized" I would offer less argument, but then it becomes apparent that the category of "excises, duties and imposts" is not necessarily exclusive to taxes which may be rightly described by those particular names. After all, there is still the small matter of exactly what the words mean, so the question of which taxes may be rightly so described is as open as ever. Additionally, there's that inconvenient word, "Taxes" which appears at the beginning of the list in Section 8, and which stands apart from "Duties, Imposts, and Excises." It's a fundamental principle of Constitutional construction that no word in the Constitution may be ignored.
The Court has indeed divided U.S. taxes into the general categories of direct and indirect, and has noted their distinctive requirements (respectively, apportionment and uniformity) but has not taken excises, duties, and imposts as the only possible members of the indirect category, any more than they have taken the Constitutionally expressed per capita tax as being the only possible direct tax. For example, the Court has frequently considered taxes on real estate as direct taxes, on the basis of U.S. history and State practices, even though there is no mention of property taxes in the Constitution to serve as a basis for classification. Government has inflicted, the Court has considered, and the people have endured, all sorts of taxes having all sorts of names -- inheritance taxes, estate taxes, consumption taxes, gift taxes, use taxes, ad valorum taxes, VATs, and on and on and on ad nauseum.
The Brushaber case, with which you're apparently familiar, contains the following statement:
"That the authority conferred upon Congress by 8 of article 1 'to lay and collect taxes, duties, imposts and excises' is exhaustive and embraces every conceivable power of taxation has never been questioned, or, if it has, has been so often authoritatively declared as to render it necessary only to state the doctrine."
In other words, Congress has power to impose any conceivable kind of tax, only on condition that if the tax is of an indirect nature it must meet a test of uniformity, and if of a direct nature it must comply with apportionment, the exception being an income tax under the 16th Amendment which is made exempt from apportionment even if it might be considered a direct tax.
The sales tax is not only a conceivable kind of taxation, it's now a very commonly exercised one, and therefore under the Court's interpretation the Congress is unquestionably empowered to impose such a tax. Likely being considered an indirect tax, it would have to meet a reasonable test of uniformity.
Buttressing the point from Brushaber, the Court has also stated:
"It is true that the power of Congress to tax is a very extensive power. It is given in the Constitution, with only one exception and only two qualifications. Congress cannot tax exports, and it must impose direct taxes by the rule of apportionment, and indirect taxes by the rule of uniformity. Thus limited, and thus only, it reaches every subject, and may be exercised at discretion."
As I have just stated above, in my own words.
(And by the way, the 16th Amendment did not grant Congress power to impose an income tax. Congress already had that power, and will continue to have it under Article I even if the 16th is repealed. What the 16th Amendment accomplished was to exempt income taxes from the apportionment requirement even if income taxes are viewed as direct.)
The situation just isn't as simple as you've presented it. The statutory history, case law history, and general history of attempting to define and categorize taxes is an absolutely devilish thing. Surtaxes, for one peculiar example, have been regarded as indirect taxes while the basic underlying tax has been regarded as direct.
The adoption of a simple, flat, universal sales tax, to the exclusion of other taxes, would be an untold blessing. No question about it. And there is no real question about its Constitutionality, provided the appropriate rule is complied with.
--Regarding the Commerce point, I'm far from conceding the point, I'm merely despairing of contesting your misinterpretation. ...--
I am exactly correct on that point: U.S. tax power cannot be challenged on the basis of the commerce clause. The U.S. tax power stands independent of the commerce clause. A person cannot avoid paying his income tax, for example, by arguing that being deprived of that money interferes with his opportunity to engage in interstate commerce. That isn't going to fly, there isn't the slightest chance of it. As another basic principle of Constitutional construction, the Constitution may not be read in a way which would bring one part of it into conflict with another.
I will additionally mention the Court has already ruled in my favor on this point, saying:
"While, therefore, the power to tax is not unlimited, its confines are set in the clause which confers it, and not in those of Sec. 8 which bestow and define the legislative powers of the Congress." U.S. v. Butler (1936)
That statement by the Court means the tax power stands on its own terms, as the tax power itself is described, and is not "confined" by the listed legislative powers of Congress which include the commerce clause.
--... When the National Sales Tax has the effect of interposing the Taxing Power of the Federal Government into transactions between one man and another within the boundaries of a sovereign State, ...--
A U.S. tax power that impinges directly on the people, bypassing the States, was expressly intended from the very beginning of the U.S. under the Constitution, and was so written and ratified. It was openly advocated, and enacted, to correct the shortcoming under the Articles of Confederation where that earlier U.S. government was dependent on the States for revenue. The residence of a person within a State is now irrelevant to U.S. taxing power over that person, and there's never been any question about that.
--... I'll sit back and watch as the Strict Constitutionalists in the Patriot movement take it to the Supreme Court ...--
Never happen. Actual patriots know more about the Constitution than that.
-- Excises are specific, fixed, absolute charges on particular commodities ...--
The Supreme Court has ruled otherwise, more than once, including in recent cases. That description of excises may be correct in the dictionary sense related to general conversation, but it is not correct as a matter of law.
-- ... the realization of the American Public that the National Sales Tax represents a 30% surcharge...--
No, you seem still to misunderstand what's being proposed. The Fair Tax is not an additional tax, it's a replacement for the income tax and the other taxes mentioned.
Well stated, Red Redwine. Certainly you deserve to be awarded at least a touchdown AND a field goal for the elucidation. Unfortunately, I doubt that the poster will agree despite the obvious correctness of your analysis. C'est la vie!
Little Willie is "The Worst President In American History."
Well, gentlemen, sorry I have been away from FR for a few days; I will try to provide you with a deserved response to your arguments herein.
As near as I can tell, you continue to line up on this issue pretty much the way that I discussed last time: CHIEF and pigdog maintain the view that, if one accepts “all new commodities” as being “specific” and “particular”, then the NRST may be defined as an Excise and would therefore be Constitutional. Red, OTOH, is not so concerned with whether the NRST may be justified as an Excise; his view is that - Excise or no - the NRST is an Indirect Tax not specifically proscribed anywhere in the Constitution and may therefore be enacted.
Now, I suppose that it is conceivable that advocates of the NRST would overcome a Constitutional challenge by employing these arguments.... and given the antipathy to the NRST on the part of the Patriot/Tax Freedom Movement (from whence I excerpted the “constitutional objections” articles posted above), I feel confident that just such a challenge would be made.
However, even should NRST advocates carry the day against constitutional challenges brought against their pet program, I believe that the victory would be Pyrrhic at best. Employ an expansive definition of “Excise” in order to secure legitimacy for the NRST? Plays into the hands of liberals wishing to employ their own expansive definitions of “provide for the general welfare”. Employ the argument that the NRST is an Indirect Tax nowhere proscribed in the Constitution? Pays homage to the liberal view that “That which the Constitution does not specifically prohibit must be allowed”, but does little for that judicial mainstay of Conservatism, the Strict Constitutional interpretation that “That which is not specifically Enumerated is disallowed”.
While I expect you-all will disagree with my take on it, to me it smacks of employing Expansive Constitutionalism to secure legitimacy for one’s own pet program... a losing position in the war against Expansive government, IMO.
But I do have to give pigdog credit for being right on one point... he asks me, why - if I feel that the NRST is that unlikely to ever pass into law - should I worry about it? You’re right, pigdog; I really don’t. I think it is a bad tax for a number of political and financial reasons; not the least of which is the “false advertising” (IMO) way that a tax which would, at the least, inflate consumer prices (at least) 30% is sold as being 23% if one uses the phrase “tax-inclusive”... which no prior legislative calculation of Sales Tax ever has. It is, in my view, a bad-faith way of selling a bad tax. But, yes, realistically, I see no way that the NRST - with at-best tepid support from Conservatives, many of whom don’t like it, don’t trust it, or don’t think we can “sell” it - could ever pass. A majority in the House? A filibuster-proof, veto-proof majority in the Senate? On behalf of the NRST? No, I don’t see that as being the least bit likely.
I oppose it in theory, but, no, I don’t ever expect it will ever actually see the light of day in practice.
I believe that you have misunderstood what has been said Uriel1975. In my view, the NRST is both an indirect tax and an excise tax. You seem to wish to characterize these two things as being diametrically opposed - they're not. I also said it probably didn't matter whether the sales tax is an excise or not since, indeed, it is a tax.
As Red Redwine pointed out the term "indirect tax" is not limited to the three categories you try to impose.
As for the tax-inclusive vs. tax-exclusive terminology, it is also moot since regardless of the way the tax is described, the amount of money involved is the same as has been pointed out (and I believe to you) many times on these TRT's. There is certainly a very good reason for describing it as tax-inclusive since in that way the percentage is comparable to the income (or flat-VAT income tax) rates, which are tax-inclusive - although this fact is seldom identified.
If you wish to use tax-exclusive, that's fine, too, so long as you convert the income tax rates to tax-exclusive also. To use different bases (one tax-inclusive and the other tax-exclusive) is completely misleading and leads to erroneous results since they are then not comparable. Just use the same basis when talking about them.
If I recall your preferred tax scheme, you would wish to see the country revert to a system much like the one that existed at about the time of the Louisiana Purchase where the states were sovereign in how they raised the tax money for the Federal government. Isn't that the case?
Little Willie is "The Worst President In American History."
In addition, your description of the FairTax as one that "... would inflate consumer prices 30% ..." in both incorrect and quite off-the-wall. I would be curious to see any studies you have by recognized economists that show this action. I have read a number of such studies and they ALL show consumer prices declining by a considerable amount, and NOT increasing as you claim.
It seems this amounts to nothing but more of your attempt at using scare tactics. I believe most people can and do see through such a transparent attempt backed up by nothing but hot air.
Little Willie is "The Worst President In American History."
If I recall your preferred tax scheme, you would wish to see the country revert to a system much like the one that existed at about the time of the Louisiana Purchase where the states were sovereign in how they raised the tax money for the Federal government. Isn't that the case?
That would be one of the options that the Constitution allows. The others would be Tariffs... and, though as a former MacroEcon major I am an ardent Free Trader (like every single Nobel-winning Economist of whom I am aware), if you were to provide me with a Government as small as that which the Founders intended, then I would be much more amenable to the low level of Tariffs that such a Government would require to finance itself. Likewise, as a Capitalist, I have no particular favor for Consumption taxes on particular commodities alcohol, tobacco, and gasoline --- Excises in the truest sense; but with a small enough Government expenditure, small Excises are no immense burden. Now, I don't particularly like Tariffs or Excises; if there were a given need for additional Revenue, I would certainly favor the apportionment of Direct Taxes proportional to population as the Constitution allows, rather than overly-high Excises or Tariffs. Alternatively, if Debt Markets are conducive to low-interest borrowings, the Federal Government has the authority to borrow money against future Revenues.
The Constitution allows that flexibility. My "favored tax scheme" is one option among several, each of which have their economic problems (as does the Graduated Income Tax, as does the Flat Tax, as do VAT's, as do Sales Taxes), but each of which is far less pronounced in its particular problems given a Constitutional Public Sector of say, 5 to 7% of GDP (maximum).
1) Taxes
2) Duties
3) Imposts
4) Excises
These are four different things not three as you keep maintaining. Any bets that the reason the founders prohibited head taxes is that the slave owners did not want to pay a tax on their slaves?
If there are national sales taxes will there also still be state sales taxes? This would mean another 9% here in chicago.
What economic theory claims that you can increase the cost of anything by 40% to 50% without a calamitous drop in demand? This tax would cause a tremendous depression in my opinion particularly if it is to be charged on purchases of stocks and bonds. Will this tax be charged on tuitions as well?
It appears to me that the rates which are being discussed would increase my tax bill significantly, I know I do not pay anything close to 23% income taxes. This is not an argument not to enact it but just an observation.
I'd certainly be interested in reviewing studies by recognized economists that show "... 5 to 7% of GDP (maximum) ..." as you represent it to be. That seems impossibly small given the realities that face us at present. That does not mean I support or am arguing for high government spending, by any means, but just that percentage seems unrealistic.
The definition you use of excise is highly restrictive and, as has been pointed out on this thread, the definition is in no way limited to the things you are trying to limit it to. Perhaps you haven't studied the replies.
The state determination of how to raise tax revenues for the Federal Government was a disaster whan it was last tried (the LA Purchase era). I doubt it would work any more successfully now. Then again, they bled people for illness and injury in those days - do you think we should do that too?
Little Willie is "The Worst President In American History."
How about another definition of Excise tax:" Generally, any tax levied internally upon some phase of the production and distribution of goods and services, but occasionally applied to a customs duty." Dictionary of Economics (Barnes and Noble)
Seems like a lot of different definitions don't help come to a conclusion.
Income taxes are not value added taxes. Value added taxes are added at each stage of production and would be one of the worst solutions to this problem.
Who believes that having a 23% National sales tax would lower their tax bill? At present federal tax revenues represent around 20% of the gross national product.
If such a thing does pass I for one will be using a LOT of used stuff like almost everything. Would only new houses be taxed?
1) Taxes 2) Duties 3) Imposts 4) Excises These are four different things not three as you keep maintaining. Any bets that the reason the founders prohibited head taxes is that the slave owners did not want to pay a tax on their slaves?
Well, you'd have to ask them; but I don't think that there is a thing wrong with the Constitutional System of Excises, Duties, Imposts, and Direct Taxes apportioned among the States proportional to their population... However, the Founders proposed such a limited tax base operating under the assumption that Government spending would be equally limited, to that which they had enumerated. It'd be nice to get back to this.
If there are national sales taxes will there also still be state sales taxes? This would mean another 9% here in chicago.
Yes, both State sales taxes and State income taxes would stay in place.
What economic theory claims that you can increase the cost of anything by 40% to 50% without a calamitous drop in demand?
In defense of the NRST advocates, they believe that the decrease in Quantity Demanded would be off-set by the Increase in available disposable Income. I believe that view to be simplistic and wrong-headed, but that is my opinion... they do, and are entitled, to have their own opinion. They also believe that there would not be a 40% to 50% increase... now, I tend to agree with the idea that raising the price of a consumer good from $1.00 to $1.30 may be a 23% "tax-inclusive" increase, but it is and will be seen as a 30% Sales tax given the way that Sales Taxes have always been calculated. Furthermore, I also agree with the analysis that, given a Government that is responsible for almost 25% of the purchases in the Economy, if you do not have massive cuts in Government Spending, then the remaining 75% of the Economy's Demand-Side that is made up of Private Sector purchases would necessitate a "tax-exlusive" (the normal way of calculating Sales Taxes) Consumption Tax rate of at least 42%... after all, the Government will not be paying Sales Tax, it will be funding it's purchases (again, 25% of GDP) from the proceeds of Private Sector Sales Taxes.
Again, that's my view. The NRST advocates see it differently. I just think that they are wrong.
This tax would cause a tremendous depression in my opinion particularly if it is to be charged on purchases of stocks and bonds. Will this tax be charged on tuitions as well?
Tuition? I don't know. I'm not a National Sales tax advocate; ask them. In their defense, no, it has not been proposed for purchases of Stocks and Bonds (that I am aware of). But even so, would it cause a Depression? Opinions differ. The effect on Quantity of Demand from a 42% (at least) Consumption Tax? I think it would be tremendously bad. Equally, Advocates of the National Sales Tax feel that the effects of eliminating Income and Payroll Taxes would be tremendously good. As I've mentioned, each have our own opinions. But I have yet to notice in this Thread (maybe, in fairness, I missed it) any Sales Tax advocate arguing that a System where the Private Sector pays $1.23, or $1.30, or $1.42 for $1.00 goods... while the Feds, rather than pay Sales Tax, fund their purchases with Sales Taxes and still pay $1.00 for $1.00 goods... would not result in a huge advantage for Public Sector growth versus Private Sector growth.
It appears to me that the rates which are being discussed would increase my tax bill significantly, I know I do not pay anything close to 23% income taxes. This is not an argument not to enact it but just an observation.
Again, to speak in the NRST advocates' defense, if you consider the fact that you are paying (between what you see and what your employer doesn't pay you, but instead pays in payroll taxes) around 15.3% in Social Security/FICA right now, plus all the "hidden" Federal taxes in life, you probably already are paying quite a bit of Federal Tax. Where I break with the NRST advocates is in my agreement with analysts who maintain that the National Sales Tax would, in fact, require more than the 23% (already a "tax-inclusive" number; it means that if you increase the price of a good from $1.00 to $1.30, the $0.30 cents in Tax is only 23% "tax-inclusive" of the whole $1.30) that they claim; I believe that the Economic repercussions are larger on the negative side of the ledger than they believe; and I believe further that the Enaction of a National Sales Tax would not stop Big Government Liberals from bringing back the Federal Income Tax - with the Sales Tax still in place - the next time they are in the Majority.
Advocates of the NRST believe that the important thing is to get rid of the Income Tax; I do not like their proposed alternative Tax, and would prefer to focus on Cutting Spending Cutting Spending Cutting Spending Cutting Spending Cutting Spending Cutting Spending Cutting Spending down to the level that the Economic Negatives of whatever tax system (and all Taxes have their negatives) are essentially negligible.
Do not let the scare tactics of Uriel1975 and others scare you out of your common sense. First of all, the percentages are not additive as some have suggested and as you are seeming to assume.
I will accept that your "9%" is the Illinois state sales tax at present. As such, it is expressed as a tax-exclusive number while the NRST numbers are tax-inclusive. Lets first state your sales tax as a tax-inclusive number (the amount of money is the same no matter which way it is stated, but to be comparable, they need to be stated on the same basis). A 9% tax-exclusive tax corresponds to a rate of 8.26% tax-inclusive.
Of more importance is that to become an administering state (for which it is paid) under the FairTax, a state must conform to the NRST law. This means that the tax base for the state will be greatly increased (by a factor of 2 or 3 times what it now is - or possibly more). At present, services are not taxed, and neither mail order sales nor Internet sales are taxed. In addition, many things are written into the typical state sales tax law as exceptions to taxation. With the NRST, there are no such exceptions.
Taken together, all of these things will lower the tax-inclusive rate from its present 8.26% down to 2 to 2.5% or perhaps less due to the much greater tax base. So you see you are really talking about something like a 25% to 25.5% tax-inclusive federal plus state total tax on sales. This is not in addition to your present income and payroll tax payments, but instead of it. Keep in mind, the payroll tax which presumably you pay is 15.3% (tax-inclusive) or 18% (tax-exclusive).
With the FairTax, all of your withholding taxes (income, payroll, etc) are completely done away with. The programs they represent are funded out of the NRST and all benefits remain unchanged.
In addition to this, aka, the amount of money that is presently bundled into the prices of things at present by the effects of corporate taxes and compliance costs in general will rapidly be removed from the prices of things. Almost all economists studying this have considered this drop in costs to be from 20 to 40 percent of the price of the particular thing.
Do not, then, be frightened out of your wits by the scare tactics. Instead, consider what will really happen and realize that the NRST will bring many economic benefits to this country. Among the benefits will be lowered interest rates for home and other purchases, a contribution to tax revenues by the "undergroung economy" such as drug dealers and illegal aliens for the first time, and a boosting of the competitiveness of American firms exporting things by the removal of the tax component that is embedded in the things we ship overseas.
And these are only a few of the benefits.
In addition to all of the economic benefits, the income tax will be eliminated as will the IRS, and the income tax records will be required to be destroyed. The compliance cost savings alone are hundreds of billions of dollars. Do not be misled.
Little Willie is "The Worst President In American History."
Since you re-posted this (for at least the second time), I'll repost the answer I gave you the first time I noticed this post, several days ago. If you have such a burr under your saddle about this issue, please find new articles and material. Please do not re-post articles just because you believe the dummies among us didn't "get it" the first time.
Here is my (standing) response to your post:
---------------------------------------
According to the group, such a plan would raise exactly as much money as current laws do, while cutting taxes for just about everyone..... at 1995 levels a new sales tax would have to raise $1.36 trillion to replace all Federal income taxes, payroll taxes and estate and gift taxes.
While I admit to not reading your entire post, this last part of the above quote stands out. There are two things wrong with it, which, it seems, negates the entire premise: First, (and least important), we're not AT "1995 levels". Second, and most important is that we don't need to raise 1.36 trillion dollars because of the overpayment we've been socked with and which the Fed now owns.
Since we've got such a huge "surplus" which everyone in DC's been scrambling to find a way to spend, it stands to reason that we shouldn't have collected 1.36T$ to begin with. Drop that figure down to a government "allowance" of, say, 20% of what we make (still too much by my standards, but be that as it may...) and the NST will drop accordingly.
Will someone please explain to me why we have to run our paychecks past Washington before they deign to give us back what they think we should get back? Seems to me that what we make is ours to spend as we see fit.
I propose the Fed be given an allowance, with which it must pay for all social programs, social spending, welfare, arts, various agencies and the military. It will become quite clear rather soon where the priorities lay.
American families must live within their salaries. Why can't the Fed? I'll tell you why; because no one protests enough. A tax revolution would be quite appopriate at this point in history, what with the upcoming election and all, don't you agree?
I'm truly impressed. (#7) You're good.
Rather than argue around the issues, IMHO a consumption tax is inherently fairer than a graduated income tax. The devil is in the details.
I agree that the 16th Amendment must be repealed and a new amendment ratified to make a national consumption tax constitutional. But I cannot stop there. I believe that a balanced budget amendment must also be ratified that prevents the government from spending more than the revenues collected from the consumption tax. To prevent a tax rate increase, the maximum consumption tax rate should be set forth in the amendment and require another amendment to change it. Further, the amendment should spell out what transactions are subject to the tax and state that no other transactions not specifically named shall be subject to the consumption tax.
It is only by these steps that federal government spending can be curtailed and the absolute rate of taxation maintained.
The NRST plans are not Value Added Taxes, either aka. Interestingly enough both the present income tax and the flat tax ARE VAT's and have the effect of bundling additional non-productive costs into each stage of production and distribution along the way in the life of a thing. These costs cascade at each step and do nothing but increase prices. The NRST plans, by law, have no such action.
Only new things would be taxed (not just houses) since the principal is to tax a thing but only once. Income is not taxed nor are savings or investments (or investment income). There is also no withholding from your paycheck giving you greater takehome pay which you decide how (or whether) to spend or save. You have no such option at present since the government gets first crack at your money and then makes you fight to get it back (which you do not always do).
You would have a much better chance of building up funds for a rainy day with the Fairtax than with any other plan.
Keep in mind, everyone is paying a lot in the "hidden taxes" (the 20 to 40% figure that I have mentioned) caused by the VAT cascading of the direct tax system. This is not accounted for in the figures most of those opposing the NRST presently. Also, the huge compliance costs of the present system are hundreds of billions - the NRST cuts this to very, very little and to zero for most of us who are not retailers.
Little Willie is "The Worst President In American History."
I'd certainly be interested in reviewing studies by recognized economists that show "... 5 to 7% of GDP (maximum) ..." as you represent it to be. That seems impossibly small given the realities that face us at present. That does not mean I support or am arguing for high government spending, by any means, but just that percentage seems unrealistic.
Well, the GDP is nosing up around $8 Trillion now; 5 to 7% would be 400 to 560 billion dollars. Allow 300 billion for National Defense (50 billion more than the Klintoon-starved military recieves today), and 50 billion for international Intelligence and Diplomacy (just the Embassy costs, eliminate Foreign Aid), say 20 billion for Space Exploration (double the current budget, and I think it's good long-term investment in National Defense), and you've still got from $20 billion (at 5%) to $180 billion (at 7%) for...what else? What other big-budget items are strictly Constitutional? Find me a couple, and I might have to go with the 7% figure over the 5%, but while it may take us a while to get there (winding down Federal pensions as we downsize Government, privatizing Social Security, etc.), I personally believe that it is an eminently respectable number to aim for.
The definition you use of excise is highly restrictive and, as has been pointed out on this thread, the definition is in no way limited to the things you are trying to limit it to. Perhaps you haven't studied the replies.
I disagree with them, that's all. And I believe that the necessity (as I see it) of having to employ Expansive interpretations to justify the NRST runs counter to Conservative Strict Constitutionalism. I know that we are in disagreement here.
The state determination of how to raise tax revenues for the Federal Government was a disaster whan it was last tried (the LA Purchase era). I doubt it would work any more successfully now. Then again, they bled people for illness and injury in those days - do you think we should do that too?
Overall, with one unfortunate period from 1861-1867, the 19th Century was an Income-Tax-Free era. There also (obviously) was no broad based National Sales Tax. But overall, the 19th Century was a wonderful era in terms of US economic growth. While the early part of the Century was, yes, marked by State intransigence to the Federal Government in the administration of Federal Taxation (unfortunately resolved first by the Civil War and then by the 16th and 17th amendment "Progressive Era" in favor of a vastly-more powerful Federal Government), overall, those were the Good Days. We went from an economic nobody in 1800 to one of the foremost economic powers in the world in 1900, and the Dollar was worth twice as much in real, inflation-adjusted terms in 1900 than it was in 1800... and people had more of them - Dollars, that is - than they did in 1800.
It all happened in the almost-total absence of Income Taxes, and the Total absence of any Universal National Sales Tax.
Yes, I'd like to try it again. But no matter what Tax System you favor, it will not happen with a Public Sector eating 25% of GDP. Cut Spending.
The dirty little secret of the National Sales Tax. Not mentioned here!!
If I have saved $20,000, after paying aprox, 28% on it while earning it, now I am supposed to be happy to pay 23% more when spending it. It may be OK for the folks that never saved anything. Let's start even!!
I believe that a balanced budget amendment must also be ratified that prevents the government from spending more than the revenues collected from the consumption tax.
I disagree. With a small enough Government, deficits are virtually irrelevant --- run a little, itty, bitty, tiny Federal Government entirely off Debt (public sales of Treasury Bonds) for one year, and you will still have no problem paying that Debt off from future revenues. I would not want to do that --- at all --- but it would not represent a huge economic meltdown.
The problem is not overspending Revenues. The Problem is Too Much Spending, Period.
My "Dream" Amendment? We have a generally effective, mostly-accurate measure of Total Economic Activity that is accepted nationwide, for generations, by most reputable Economists. It is called the Gross Domestic Product (GDP) - yes, I'm sure this is remedial education, you already knew that. Right now, the Federal Government budget is 20 to 25% of GDP (depends on whose numbers; the cynic in me suspects the higher number is more accurate). Of course, addd in the State and Local Public Sector, and the picture is worse, but let's hacksaw the Federal Budget first. I'd like to see us get to a point where we can write an amendment that says The Total Expenditure of the Federal Government during any 12 month period shall not exceed 10% of the Nation's annual GDP, save for periods in which the Nation is engaged in a Congressionally-Declared State of War. Let the legal scholars work out the precise wording; if we can achieve a Federal Public Sector averaging 5 to 7% of GDP most of the time, I'll still think that National Sales Taxes are far from the best idea going, but I'm not likely to scream as loud, either. Why? At 5 to 7% of GDP, you can advocate almost any Tax Policy, be it hare-brained or brilliant; it's economic negatives will still be minimal.
If I have saved $20,000, after paying aprox, 28% on it while earning it, now I am supposed to be happy to pay 23% more when spending it. It may be OK for the folks that never saved anything. Let's start even!!
Actually, I ran across an anti-Sales-Tax article expressing just exactly that "double taxation" objection, but as I had already strung 3 articles together, I felt my Article was getting long enough.
You are right, nonetheless; thanks for the Post.
BTW, re: my figures:
$300 billion Defense
$50 billion International (intel and diplomacy)
$20 billion Space Exploration
Total $370 billion
Meant to say "additional %10 billion for Federal government administrative functions (pretty generous given a very-limited Gov't)" but forgot when I posted. That brings the Total to $380 billion, leaving $20 billion out of $400 billion at 5% of GDP, or $180 billion out of $560 billion at 7% of GDP, for any other Federal functions that are strictly Constitutional. Sorry for the "missing" $10 billion and any numbers-don't-add-up confusion it caused...
The state sales taxes would not "stay in place". They would actually change greatly - see my reply #229. State income taxes may or may not remain since most states "piggyback" their current income taxes off of the Federal income taxes. It seems more likely that most states would abandon their income taxes and instead swing over to using the sales tax which is another reason why the existing sales tax will not "remain in place".
If you really believe you are stating the belief of NRST proponents when you try to explain your "Quantity Demanded" theory, Uriel1975, you are completely misinformed. That is not their position at all. In fact prices will drop and quite rapidly due to the removal of the "hidden taxes" embedded in prices presently, not because of a greater quantity being purchased (which is what I think you mean by your "Quantity Demanded" comment).
In addition, your description of raising the "tax-inclusive" rate by "charging $1.30 for a $1.00" item is not correct on several counts. Firstly, that is not a 23% tax-inclusive rate as you state, but a 23.1% tax-inclusive rate. You also have purposely misstated the fact that the $1.00 item will remain $1.00 after the NRST. In fact, prices will decrease, not remain the same or increase as I have explained in reply #233. It is questionable economics at best to continually misstate things as you have been doing in this thread.
Also, the Federal government is taxed by the NRST which is just the opposite of what you state. They are presently taxed in the form of income and payroll taxes on their employees and there is certainly no reason why they should be given a tax-favored position under any other tax plan. Your statements about the federal government not paying sales tax are quite incorrect and I request you stop making that misstatement of fact. This very point has arisen more than once on these TRT's, you must not have seen it.
Tuition and education generally are not taxed since they are considered (for tax purposes) like resale of things to a retailer for resale since the FairTax bill says:
"(D) EDUCATION AND TRAINING- Education and training shall be treated as services used to produce, provide, render, or sell taxable property or services." Keep in mind that a thing is taxed once, but only once as one of the principles of the NRST. In addition stocks and bonds, being, investments are not taxed either.
You talk about "analysts" claiming more than 23% tax-inclusive would be required. The only "analysts" I know of who have made this claim are either newspaper columnists or individuals who are dyed-in-the-wool flat tax (or even income tax - yes, Virginia, there are some) advocates who are anything but even-handed in their bias. I know of no study done in depth such as this one which shows either NRST to be revenue neutral at either 15% (CATS plan) or 23% (FairTax plan). With respect to your "analysts" ... show me the money; let's see a rigorous economic analysis such as this one that backs up your rash statements and not just newspaper articles.
Little Willie is "The Worst President In American History."
I'd suggest a Part II thread if this continues. I won't begin a new thread, but if Chief or pd, or you wish to start one that would be fine. But if nobody does, I can stand it.
--Red, OTOH, is not so concerned with whether the NRST may be justified as an Excise; his view is that - Excise or no - the NRST is an Indirect Tax not specifically proscribed anywhere in the Constitution and may therefore be enacted.--
That seems to accord with the view the Court has taken over the years. I was not able to find any instance of where the Court rejected a tax on the basis of what kind of tax it was, such as that it did not meet some technical definition of "excise." The Court's action against taxes has been where they violated the applicable rule, or amounted to taxation of exports. They have upheld both "excises" levied as a percentage of value, and also which applied to a broad, unspecified range of goods and services.
--Now, I suppose that it is conceivable that advocates of the NRST would overcome a Constitutional challenge ... I feel confident that just such a challenge would be made.
I suspect "challenge" is too strong a word. Some might attempt to argue the subject, but I doubt it will get any serious hearing. The legal doctrine appears to be settled.
--Employ an expansive definition of “Excise” in order to secure legitimacy for the NRST? Plays into the hands of liberals wishing to employ their own expansive definitions of “provide for the general welfare”. ...--
Unfortunately, the "general welfare" phrase is indeed very open-ended, and the Court has pretty much left it up to Congress to decide what the "general welfare" might be. Ultimately, it's a political question. Vote carefully.
The NRST itself will not play into the hands of liberals. Liberal political opposition will be the main obstacle to making the change. Liberals adore the unapportioned income tax, it's an endless playground for their childish fantasies of political utopia.
--... Employ the argument that the NRST is an Indirect Tax nowhere proscribed in the Constitution? Pays homage to the liberal view that “That which the Constitution does not specifically prohibit must be allowed”, but does little for that judicial mainstay of Conservatism, the Strict Constitutional interpretation that “That which is not specifically Enumerated is disallowed”.--
The analogy to liberal political methodology doesn't hold, since the Constitution does expressly grant Congress power to impose taxes. It isn't as though the Constitution were silent on the matter. The liberal "living document" scam is mostly in connection with subjects that aren't mentioned at all, such as abortion etc.
--While I expect you-all will disagree with my take on it, to me it smacks of employing Expansive Constitutionalism to secure legitimacy for one’s own pet program... a losing position in the war against Expansive government, IMO.--
As to taxation, however, the historical record is clear: the tax power of Congress was fully intended to be very broad. The reason is straightforward. At the time of its founding, under the Constitution, the U.S. was a poor nation with strong potential enemies, notably England, of course. The Founders were well aware of the difficulties of the Revolution, and the chronic financial hardship suffered by Washington's army. They feared involvement in future wars, with absolutely good reason, as the War of 1812 proved. They did not feel competent to specify exactly how a future government could raise enough revenue to win a future war. Under the circumstances they were compelled to leave the subject open, and provide a very general and extensive tax power for Congress. They included the basic limits they felt were necessary to sustain liberty, but beyond that there was little they could do. They did the right thing at the time, and it is hardly the Founders' fault that we of later generations have not always been as wise as they were. We, the People, should have done something about the tax powers of the U.S. a long time ago.
--... I think it is a bad tax for a number of political and financial reasons; not the least of which is the “false advertising” (IMO) way that a tax which would, at the least, inflate consumer prices (at least) 30% ...--
That won't happen. Prices are not that divorced from costs, and the income tax cost and income tax compliance cost will be removed from prices. Pre-tax retail prices will fall, it is absolutely unavoidable.
--I oppose it in theory, ...--
Could you expand on that?
In what form do you have this savings Mr. Bob?
Keep in mind that one of the advantages you will be getting with the NRST is the decline in prices that most economists peg at from 20 to 40 percent of the price of things. You also will no longer will have whatever you've been spending for compliance with reporting your income to the government and for providing them an interest free loan for the better part of a year.
In fact, you have probably paid far more that 28% since your payroll tax alone would have been over 15%. Whatever you have been paying, do you really believe that you wish to continue to pay the hidden taxes of from 20 to 40 percent inflated prices plus income and payroll tax withholding rather than to drop that to a 23% (tax inclusive, which is what income tax rates are) and to reduce interest rates 2 to 4 percent also? Perhaps you should refigure your options.
Little Willie is "The Worst President In American History."
Why don't you put all that (whatever it might be) in the form of a bill, get some sponsors (from each party) and submit it to the Ways & Means Committee. That way you'd at least have taken the concrete steps taken by the FairTax people.
Until we can see the bill, it's just so much daydreaming. And don't forget to include that requirement for bleeding those that are sick or injured, too.
Little Willie is "The Worst President In American History."
"The dirty little secret of the National Sales Tax. Not mentioned here!!
If I have saved $20,000, after paying aprox, 28% on it while earning it, now I am supposed to be happy to pay 23% more when spending it. It may be OK for the folks that never saved anything. Let's start even!!
You had to make $22,800 under the existing income tax system to save $20,000. Plus you have paid an addition 20 to 40% income tax/compliance cost for everything you have purchased, that did not show up on any sales slip. These are the cascading Taxes/fees/costs that are passed on down the consumption line, very similar to a VAT. The problem is some of these costs don't go into the gvmnt coffers, but into the wallets of accountants, CPAs and tax lawyers.
As I've said earlier...The Dirty Little Lie About The FairTax, these anti-FairTaxers propose is they fail to mention theses facts, plus the fact that all get a rebate depending on family size. So let's look at what the facts really are...
When combined with the rebate you receive under the FairTax and the price reductions that will occur with removal of the hidden taxes and compliance costs (studies show this will be a 20 to 40 percent reduction), you'll be better off. And keep in mind, used things are not taxed, only new ones.
Here's what the tax and rebate structure looks like:
Effective tax rate table follows ....
| Income for Family of Four | Current Income Tax Rate with Payroll Tax (Assumes Employer and Employee payroll tax portions) |
FairTax (Assumes all income is spent-includes rebate) |
|---|---|---|
| $ 15,600 | 18.1% | 0.0% |
| $31,200 | 23.3% | 11.5% |
| $46,800 | 25.6% | 15.3% |
| $62,400 | 27.5% | 17.3% |
Rebate Table follows ...
The "FairTax" 1999 Rebate Figures |
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Household |
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