Posted on 09/15/2005 7:03:21 AM PDT by groanup
THE FAIRTAX --- STRAIGHTENING OUT SOME CONFUSION
When Congressman Linder and I were busy researching and writing The FairTax Book we knew full well that it would one day become the focal point for those opposed to this tax reform idea. We tried, therefore, to make sure that our numbers and claims were correct and consistent with the research that went into the drafting of HR 25.
On review, and after reading the critiques of opponents to the FairTax plan, we have concluded that there is one element of the FairTax that could have been present with more clarity in the book; the concept of embedded taxes and keeping 100% of your paycheck. Those who have much to lose if the FairTax were to become law will focus on these areas in an attempt to undermine support, so let's put their objections and distortions to rest by addressing those matters here and now.
We explained in the book that the FairTax plan was revenue neutral. By this we meant revenue neutral for everyone ... the government, businesses and individuals. You can't put more money in the pockets of one without taking money out of the pockets of another. The harsh reality is that politicians would not support the FairTax if it meant less revenue for the federal government; business leaders would not support the FairTax if it meant a decrease in corporate earnings and profits, and the people would most certainly not support the FairTax if it meant a decrease in their income. Taking an snapshot view of our economy, an increase in income in one of these sectors would necessarily mean a decrease in another. This is why the FairTax was designed to be absolutely revenue neutral – leaving everyone pretty much where they are in terms of income or revenue. To put it more bluntly, there is no free lunch in the FairTax plan. There is no "something-for-nothing."
This brings us to the question of embedded taxes in the cost of consumer goods and services, and your paychecks.
As explained in The FairTax Book, there are taxes embedded in everything we buy. Every entity which provides a product or service in the design, production, marketing, distribution and sale of every consumer good or service will incur some tax liability as they perform their particular function. This tax liability will be incorporated into whatever these individuals or business entitles charge for their services, and will all passed through to become a part of the final cost of the product or service.
Now here's what we didn't explain well in the book.
Every employee of any company involved in American commerce is also a provider of a service, and, as such, the employee incurs a tax liability as a result of his or her work. This tax liability is incorporated into what the employee charges the employer for their services, and is eventually incorporated into the final retail cost of the employer's product or service. Each employee is essentially a separate business entity providing a product, be it physical or mental labor, to the employer.
The extensive research behind HR 25, The FairTax Bill, shows that the average embedded taxes in every consumer product or service is about 22%. In some industries, such as leather goods, the embedded tax is smaller. In other industries, such as homebuilding and construction, the embedded tax is higher, but it averages out to somewhere between 22 and 23%. With the passage of The FairTax Bill, those embedded taxes disappear. These embedded taxes include the combined tax burdens of all entities involved in bringing those goods or services to market, and that includes you, the employee, and the taxes you incur as a result of your employment.
We write in The FairTax Book that the competitive pressures of the marketplace will force prices down when embedded taxes disappear from the cost of retail goods and services, and we cite 22% as the average amount of those embedded taxes. Does this 22% include the income and payroll taxes that are paid by employees? Yes, it does. So ... what does this mean to your paycheck after the FairTax becomes law?
When the FairTax is implemented, and when business and personal income and payroll taxes disappear, your employer is going to have to make a decision. He will either take some or the entire amount he had been withholding for federal income and payroll taxes and add it to your weekly check, or he will readjust your pay figures so that your entire paycheck will be equal to what you used to call "take home pay" before the FairTax. The employer may also decide to do a little of both. Either way, you can see that the amount of money you actually receive as pay – the amount you can put into your bank account – will not decrease, and may actually increase.
On a larger scale real wages will rise to the extent to which the nation's employers decide to return the embedded costs of their employee's income and payroll taxes to the employee. Likewise, the cost of the products or services produced by the employer will be reduced to the extent to which that employer retains all or a portion of those income and payroll taxes together with the other taxes on capital and labor eliminated by the FairTax. Once again, a zero-sum, revenue neutral game.
Now, let's elaborate on the "keep 100% of your paycheck" line that appears in The FairTax Book. It is certainly true that after the FairTax becomes law there will be no more withholding from your paycheck for any federal taxes. What you earn is what you get. This is not to say that your gross pay will equal what it was before the FairTax. This will depend on what your employer does when the embedded costs represented by the tax burden you have passed on to your employer disappear. One thing is certain: You will suffer no decrease in real or net earnings --- the amount of each paycheck you deposit into your bank account every other week. The "keep 100% of your paycheck" concept can more easily be applied to those who either change jobs or come into the labor force after the implementation of the FairTax. A new worker will negotiate a wage with an employer knowing that the amount negotiated will be the amount that worker receives every two weeks ... no deductions. Likewise, when you change employers you, too, will negotiate a wage that will not be subject to withholding, and you will get 100% of your wages in each paycheck.
Some of you reading this amplification of the principle's of the FairTax may have come to a rather interesting and accurate conclusion. The reality is that in America we're already operating our federal government off a consumption tax. A convoluted and impossible to understand consumption tax, but consumption tax nonetheless. We say this because ultimately all taxes paid by businesses or individuals eventually make their way through our economic system until they are embedded in the cost of some consumer item or service. In other words, taxes, like that other stuff you've heard about, roll down hill. At the bottom of that hill we find the retail sale and you, the ultimate consumer.
As we said in the book, and as we repeat here, the FairTax is not a "something for nothing" scheme. It was designed to be and, in fact, is revenue neutral. Having said that; the non-government economists who studied the FairTax play are nearly unanimous in their agreement that the implementation of the FairTax will lead to unprecedented economic growth in the United States. We will see economic growth in our economy of such magnitude that it will, sooner rather than later, lift all boats ---- including yours.
http://www.freerepublic.com/focus/f-news/891695/posts
But with the FairTax, you can always grow food, whereas with the income tax you can't grow money nearly so easily ... though I've heard it said that "money grows on trees" (or maybe there was a "not" in there somewhere).
A sales tax will directly harm consumption.
Give us some details as to how you think that might happen if you will.
Don't you think that growing your own food would harm consumption?? How about being out of work with no income and no savings???
Let's see some specifics - preferably with useful links.
An income tax diminishes income. There are many examples of this. This was one reason why Reagan became a Republican, because of high marginal income tax rates that were affecting him. Look at Europe's high rates, and how the US is (comparatively) better off.
A sales tax diminish sales. There are many examples of this too. Look when (New York state?) reduced the sales tax on clothing. Sales increased dramatically. Look at the difference between Oregon and Washington. One has an income tax, one has a sales tax.
A 23-30% sales tax will DEFINITELY hurt sales. To not understand that woefully underestimates incentives/costs and people's/consumer's/taxpayer's reactions.
Since you did, though, here was my answer from that thread:
Keep in mind that prices will be reduced prior to the FairTax being applied and then be increased back to around what the were and you will have more money in hand to buy things with - no income tax, receipt of the prebate, a wider tax base with consumption rather than income, and a greatly expanding economy. Since the FairTax is revenue neutral there will certainly be little or no overall damage to consumption. The basic revenue amount is the same, it is being obtained differently ... BUT the tax will now apply to a part of the tax base that had not been taxed before to any great degree - the illegal economy. Rather that hurting sales these things should, along with an expanding economy, greatly help sales.""I believe that you are not considering the entire tax dynamic when you say that the FairTax will hurt sales.
September 5th, 2005
An answer to the Steve Forbes flat tax
In a recent article Steve Forbes contends that “A Flat Tax Would Unleash a Stupendous Economic Boom“.
Unfortunately, even if Mr. Forbes is correct, the “boom” he speaks of will not be enjoyed by the American People, but consumed by the beast in Washington, D.C. and his flat tax will be nothing more than a tool to feed this beast.
Apparently Steve Forbes, although a very successful business man, appears to be politically naïve.
The problem America faces is a Congress out of control; a Congress which will be happy to use the Forbes flat tax, or the so called Fair Tax, or even a value added tax to engage in its ongoing reckless spending and borrowing practices which have created a national debt now exceeding $ 50 TRILLION and is the big problem which the America taxpayer faces___ a problem which will be thrust upon the backs of our nation‘s younger generation if something is not done now to correct the problem.
Neither the Forbes flat tax nor the alleged Fair Tax promoted by radio talk show host Neal Boortz, or a value added tax does anything to control the wasteful spending and borrowing practices of Congress; does anything to encourage Congress to start following sound fiscal and economic policies beneficial to America’s businesses, industries and labor; nor do any of the above proposals compel Congress to extinguish annual deficits in a manner in which members of Congress would be quickly held accountable by their State Governor and Legislature for their reckless spending and borrowing habits!
Sad thing is, in this respect, the Forbes flat tax, just as the Boortz promoted [H.R. 25] and the value added tax plan, are nothing but cleverly concocted plans allowing Congress to skin the goose which lays the golden eggs and continue in its unaccountable profligate borrowing and spending habits which is the worm at the root of the tree. All the above proposals are variations of a single plan to support existing big government and the countless political plum jobs on Capitol Hill, many of which have six figure salaries and redistribute money taxed away from hard working Americans for functions not authorized by the enumerated powers granted to Congress by our Constitution.
So, what should the people be supporting to end the existing suicidal system by which a federal revenue is raised by Congress and unjustly burdens our nation‘s industries, businesses and labor? I would say the answer is to support those who are promoting a return to our Founding Father’s original tax plan by adding the following words to our Constitution:
The Sixteenth Amendment is hereby repealed and Congress is henceforth forbidden to lay “any” tax or burden calculated from profits, gains, interest, salaries, wages, tips, inheritances or any other lawfully realized money.
Adopting the above wording into our Constitution will bring us back to our Founding Father's original tax plan.
Now, how does our founding father’s original tax plan differ from the various big government friendly tax plans? Well, it was designed by “tax rebels”, people who fully understood the subtleties and oppressive nature of taxation and how taxation was formally used to benefit the King and not the people. And so, they carefully constructed a tax plan favorable for the people and their business interests. They created a plan which granted sufficient power, almost unlimited power to raise revenue for the new government they were creating, but they carefully designed it in such a manner to not only disburse the costs of government in a fair and equitable manner and remove various known tools of oppression, they likewise included a number of self regulating checks and balances to control the actions of Congress!
Let us now examine just one important part of the Founder‘s plan which was intended to be used to extinguish deficits in a manner creating a moment of accountability for every state’s Congressional Delegation___ accountability which our big spending Republicans and Democrats in Congress fear with a passion!
Under the founders plan, if insufficient revenue was brought in from imposts, duties and excise taxes [Congress’ indirect taxing powers] and Congress borrowed to meet its exigencies, Congress was then intended to lay a direct tax apportioned among the states for the total sum of the deficit created.
Few people realize the Founding Fathers provided a FAIR SHARE FORMULA in our Constitution for direct taxation and did so to not only preclude Congress from raising revenue in an unjust manner, but did so to establish a moment of accountability for every Senator and Representative in Congress Assembled.
Under the direct tax each state was intended to contribute a share of the total figure being raised by Congress to extinguish the deficit based upon its number of votes in Congress___ representation with proportional obligation__ a constitutionally mandated fair share formula which our big spenders in Congress dread! You see, under the Founder’s plan there are no loopholes, no manipulation, and, those state congressional delegations with the biggest mouth in Congress, who would dare use their large voting strength to squander federal revenue, create big government or send our money to distant lands through a “United Nations” [a money laundering operation] were to bring home to their State’s Governor a bill for the largest share of the direct tax ___ a very important check and balance of our founding fathers encouraging each state’s legislature and its governor to keep a jealous eye on their congressional delegation’s spending habits while in Washington, which is no longer being practiced, but if practiced, would be an immediate cure for today’s irresponsible spending and borrowing habits of Congress who have enslaved our nation’s younger generation with an ever increasing national debt.
There is no smoke and mirrors with the 'FAIR-SHARE' method of balancing the budget. The emergency direct tax ought to be statutorily imposed whenever Congress closes a fiscal year with a deficit. The structural mechanism which would immediately bring fiscal sanity to Congress is the requirement of having Congress send a bill to the Governor of each state, notifying him/her to remit their state's apportioned share toward extinguishing the deficit created during the year by Congress___ the governors and state legislators being left with the burden of having to raise this money, only to then send it off to Washington, D.C.
Picture for a moment the expression on the faces of the Governor of New York and the New York State Legislature, if New York should receive a bill for its apportioned share [29/435] of the 2005 federal deficit. This threat would create a compelling incentive for the Governor of each state, and the various state legislatures, to keep a jealous eye on the spending habits of their Congressional Delegation . . . it would require the fiscal accountability which the state governments once demanded from their Senate and House Members!
For a $20 million direct tax being imposed upon the states in 1861, and the amounts required to be paid by each of the various states, see HERE and use the buttons at the bottom of the page to go forward and backward.
As to Mr. Forbes, I don’t think Mr. Forbes is really politically naïve. I think Mr. Forbes is doing a very important job very similar to that of Boortz, Linder, and those who offer various other tax reform plans to the public which do nothing to control the actions of Congress and merely divide the people into various tax reform groups which diminishes their strength.
We all know there is a 70 - 80 percent approval rate among the American People to do away with “income” taxation and repeal the 16th Amendment, which would ironically bring us back to our founding father’s original tax plan which dishonorable politicians fear with a passion. And so, our clever folks in Washington have found a way to make such a large segment of our population impotent____ they have conned the people into thinking a replacement tax plan is needed if the 16th Amendment is repealed, and they have offered various government friendly tax reform plans for the people to argue over as a replacement to income taxation, which separates them into various tax reform advocacy groups and diminishes their overall strength.
But the truth is, the only tax reform needed is to return to our Founder’s original tax plan, and that can be accomplished if the people stay focused, unit, and demand their employees in Washington, D.C. add the following words to our Constitution:
The Sixteenth Amendment is hereby repealed and Congress is henceforth forbidden to lay “any” tax or burden calculated from profits, gains, interest, salaries, wages, tips, inheritances or any other lawfully realized money.
To see what thinking Americans are promoting with regard to raising a federal revenue, CLICK HERE and go to “Taxes”.
For those who are unfamiliar with our Founding Fathers original tax plan, as they intended it to work, a plan which also includes a specific method to extinguish an annual deficit, CLICK HERE and scroll down to :
American Constitutional Research Service Before the
Committee on Ways and Means
United States House of Representatives
June 1995
Mr. Chairman and Members of this Committee:
Regards,
JWK
ACRS
“He has erected a multitude of new offices, and sent hither swarms of officers, to harass our people, and eat out their substance” ___Declaration of Independence
But Neal Boortz, a talk radio show host and co-author of The Fair Tax book snaps back and points out the book‘s introduction says“…the book isn't about saving a penny in taxes " and promises to make a correction in a reprinting of his book. But the painful truth is, the Boortz/Linder book has conveniently confused tens of thousands of readers into believing something which the Fair Tax will not do, and obviously turned them into wishful thinking fair tax supporters because of misleading information!.
For the Money Magazine article see: Just how fair is the 'FairTax'?
The following is quoted from the article:
“What The FairTax Book fails to mention is that prices can only fall this sharply if companies cut wages. I asked Jorgenson about this, and he agreed. Say your salary is $100,000 a year today, but you take home $80,000 after taxes.
Your company is still paying that extra $20,000. In a FairTax world, it will save that money, and be able to lower its prices accordingly, only if it can reduce your salary to $80,000. In other words, your take-home pay is the same as before. Sure, you'd get to "keep 100 percent of your paycheck," as Boortz and Linder repeatedly write, but it would be a smaller paycheck. That's kind of a big thing to leave out.
I pressed the point with Boortz and Linder. Boortz denies that the book intentionally overpromises. The introduction, he notes, emphasizes that "this book isn't about saving a penny in taxes." But he concedes that the book is confusing about this, and vows to correct it in later printings. Fair enough.”
Meanwhile, these guys want to replace the entire tax code, they've ignited a populist movement to get it done, and tens of thousands of copies of the uncorrected book make the FairTax sound like magic.”
For a thinking person’s view on tax reform see:
An answer to the Steve Forbes flat tax
Regards,
JWK
The only stinking tax reform we need is for the American People to demand their employees in Washington add the following words to our Constitution:
The Sixteenth Amendment is hereby repealed and Congress is henceforth forbidden to lay “any” tax or burden calculated from profits, gains, interest, salaries, wages, tips, inheritances or any other lawfully realized money.
That tax scheme worked so well the first time it ws used that the country abandoned it.
Aside from not being able to raise sufficient revenue to meet present committments, it isn't as fair a manner of taxing people as even the income tax since it relies on population distribution to calculate amounts due and this leaves the poorer states at a phenominal disadvantage, That's an unbelievably poor method that in practice could never work today.
Also, it's hard to understand how you think Congress would send off a constitutional amendment for ratification without having an operational tax bill in place to continue the revenue steam.
But let's see your dream tax system in detailed bill form as well as a few serious economic studies that show how it would do in the revenue neutral requirement as well as a couple of other requirements the President specified. When you have those things, let's see them here - and then we can continue. Until then you have a non-starter.
That particular magazine article hitpiece has been extensively discussed on these threads so you're a bit late in joining the "Bash the FairTax" party. It seems that attack is the only debating tool that remains for FairTax opponents since they cannot defeat it by logic alone.
As I said in the earlier post, show us the revenue neutral calculations for your "tax plan" along with the bill involved and how it overcomes the other requirements laid upon any tax plan by the President. Until then, forget it!
That tax scheme worked so well the first time it ws used that the country abandoned it.
Aside from not being able to raise sufficient revenue to meet present committments, it isn't as fair a manner of taxing people as even the income tax since it relies on population distribution to calculate amounts due and this leaves the poorer states at a phenominal disadvantage, That's an unbelievably poor method that in practice could never work today.
Also, it's hard to understand how you think Congress would send off a constitutional amendment for ratification without having an operational tax bill in place to continue the revenue steam.
But let's see your dream tax system in detailed bill form as well as a few serious economic studies that show how it would do in the revenue neutral requirement as well as a couple of other requirements the President specified. When you have those things, let's see them here - and then we can continue. Until then you have a non-starter.”
pigdog,
My goodness, you really do fear a return to our founding father’s original tax plan. Is it because it contains various checks and balances to control the reckless spending and borrowing habits of Congress? Is that why you like H.R. 25 instead, because it is a big government friendly tax proposal which keeps feeding the beast in Washington without any accountability, or checks and balances to control the actions of Congress?
You are lying when you say the founder’s original tax plan is not “able to raise sufficient revenue to meet present commitments”. Fact is, it was intentionally designed to allow Congress to raise almost unlimited revenue to meet the expenditures of Congress. But it also provided a number of checks and balances to control the actions of Congress, especially if Congress should borrow to meet its expenses rather than tax.
You also lie about the direct tax being unfair. Truth is, it is an equal tax per capita when apportioned among the states, i.e., if the people of New York each pay one dollar to meet New York’s obligation, then the people of Kentucky could likewise each pay one dollar to meet Kentucky’s obligation. I guess you don’t believe in representation with proportional obligation. Neither do socialists and the friends of big government!
You also lie when you wrote about the Founder’s direct tax, “That tax scheme worked so well the first time it ws used that the country abandoned it.”
SEE THE FOLLOWING
An Act to lay and collect a direct tax within the united states [1st direct tax July 14, 1789 for $2 million and each state’s share of the $2million being raised.]
APPORTIONMENT OF A DIRECT TAX TO RAISE A TOTAL OF $ 2 MILLION TREASURY DEPARTMENT MAY 25TH 1798
An Act to repeal the internal taxes April 3rd, 1802
And Act for the assessment and collection of direct taxes, July 22, 1813
Act laying a direct tax for $3 million August 2, 1813, and each state’s share of the tax
Section 7 of direct tax of 1813 allowing states to pay their respective quotas and be entitled to certain deductions.
And, as I have previously documented for you, For a $20 million direct tax being imposed upon the states in 1861, and the amounts required to be paid by each of the various states, see HERE and use the buttons at the bottom of the page to go forward and backward to read the legislation.
Truth is, pigdog, the Founding Father’s tax plan worked very well, contrary to what you suggest. As a matter of fact it worked so well that by the close of the year 1835, the national debt [which included part of the revolutionary war debt] was completely extinguished and Congress enjoyed a surplus in the federal treasury from tariffs, duties, and customs. And so, by an Act of Congress in June of 1836 all surplus revenue in excess of $ 5,000,000 was decided to be distributed among the states, and eventually a total of $28,000,000 was distributed among the states by the rule of apportionment in the nature of interest free loans to the states to be recalled if and when Congress decided to make such a recall.
You also say “It seems that attack is the only debating tool that remains for FairTax opponents since they cannot defeat it by logic alone.”
I have always preferred the truth in such discussions, something which you ought to try!
JWK
ACRS
The only stinking tax reform we need is for the American People to demand their employees in Washington add the following words to our Constitution:
“The Sixteenth Amendment is hereby repealed and Congress is henceforth forbidden to lay “any” tax or burden calculated from profits, gains, interest, salaries, wages, tips, inheritances or any other lawfully realized money.”
"I have always preferred the truth in such discussions, something which you ought to try!"
"Truth is, pigdog, the Founding Father’s tax plan worked very welll "
Oh, I see ... we'll have to look into that but I note that, to you, everyone seems to be lying if they don't agree with you. I see that you say:
You also lie about ... You also lie when you ...""You are lying when you say ...
In addition, you make the absolutely odd statement:
"... you really do fear a return to our founding father’s original tax plan ..."
In a word, NO!! Not hardly. In fact I merely asked you to show us a bill you have before congress expressing your "tax plan" in some detail and showing us some economic studies that demonstrate it is revenue neutral as well as meets the ofher few criteria that the Presedent has put forth. Since you seem unable to do that, we'll consider this to be the self-effacing piffle it really is.
Nor was I "lying" about your "plan". The experiences you cite all come from the pre-War-Between-The-States days of this country's history with your most recently cited date being 1861. In fact the U. S. started the first income tax by law in 1863 so it is quite apparent that your wonderful "plan" wasn't all it was cracked up to be and it certainly never came alive after the war even though the income tax was eventually removed and then re-started in 1909 (corporate) and 1913 (individual). Is that, do you suppose, because your favored tax plan was doing such a bang-up job?
In the early days of the country the states and the federal government were always short of funds (sound familiar?) despite your idealized "plan" and the charging of individual states with population-representative taxes is - as I said - far more of a burden of poorer states than richer ones. This is one of the things that helped bring about the War-Between-The-States; the richer Northern states were felt by the Southern states to be getting far too much in the way of trade, voting power and favorable treatment in Congress, etc. all stemming from these Northern states having a greater (richer) industrial and trade base. Adding fuel to this sort of animosity is not something to be casually dismissed - even today.
But FEAR the return of something so obviously impractical??? Not at all. Let's see your bill and economic studies and explanation of how the President's other criteria are met. And I am certainly not lying.
In a word, NO!! Not hardly. In fact I merely asked you to show us a bill you have before congress expressing your "tax plan" in some detail and showing us some economic studies that demonstrate it is revenue neutral as well as meets the ofher few criteria that the Presedent has put forth. Since you seem unable to do that, we'll consider this to be the self-effacing piffle it really is.
Show you a bill? Perhaps you should read our Constitution!
Still telling fibs? My plan? What I support pal, is not my plan, but the founding fathers original tax plan and its various checks and balances which were designed to control Congress' actions, and also provides an intended method to extinguish deficits in a manner making every member of Congress immediately accountable to their state legislature for their spending habits while in Congress Assembled.
As I correctly stated above in post 427
“Neither the Forbes flat tax nor the alleged Fair Tax promoted by radio talk show host Neal Boortz, or a value added tax does anything to control the wasteful spending and borrowing practices of Congress; does anything to encourage Congress to start following sound fiscal and economic policies beneficial to America’s businesses, industries and labor; nor do any of the above proposals compel Congress to extinguish annual deficits in a manner in which members of Congress would be quickly held accountable by their State Governor and Legislature for their reckless spending and borrowing habits!
Sad thing is, in this respect, the Forbes flat tax, just as the Boortz promoted [H.R. 25] and the value added tax plan, are nothing but cleverly concocted plans allowing Congress to skin the goose which lays the golden eggs and continue in its unaccountable profligate borrowing and spending habits which is the worm at the root of the tree. All the above proposals are variations of a single plan to support existing big government and the countless political plum jobs on Capitol Hill, many of which have six figure salaries and redistribute money taxed away from hard working Americans for functions not authorized by the enumerated powers granted to Congress by our Constitution.”
pigdog,
Your plan is intentionally designed to support existing big government via its revenue neutral feature, and does nothing to control the reckless spending and borrowing practices of Congress. Only a socialist and those who favor big government would support your government friendly tax plan, and be against our founding father‘s plan.
“He has erected a multitude of new offices , and sent hither swarms of officers, to harass our people, and eat out their substance” ___Declaration of Independence
As I said, I have always preferred the truth in such discussions, something which you ought to try!
JWK
ACRS
The only stinking tax reform we need is for the American People to demand their employees in Washington add the following words to our Constitution which brings us back to our founding fathers plan:
“The Sixteenth Amendment is hereby repealed and Congress is henceforth forbidden to lay “any” tax or burden calculated from profits, gains, interest, salaries, wages, tips, inheritances or any other lawfully realized money“ .
The Constitution is not a revenue bill John - I'd have thought you would know that. If your idea in your "tax plan" is to have NO revenue-raising legislation other that the Constitution then your "bill" should state that.
I merely asked you to show us a bill you have before congress expressing your "tax plan" in some detail and showing us some economic studies that demonstrate it is revenue neutral as well as meets the ofher few criteria that the Presedent has put forth. Since you seem unable to do that, we'll consider this to be the self-effacing piffle it really is.
Apportioning to the states left the scene many years ago ... or perhaps you didn't notice. Stop wasting bandwidth with your nonsense. Show us how your "plan" would raise sufficient funds to run the government and how it would be anything other than oppressive on poorer states (which was one of the reasons for its downfall originally).
Your daydream will never make it before Congress for a vote unless you have it in bill form and it is precisely that we need to see. Until then, you're just continuing to rant and rave only to boost your own ego.
The Constitution is not a revenue bill John -
Exactly so! It’s the supreme law of the land and cannot be changed whenever Congress feels the urge as your big government friendly H.R 25 tax plan may be changed by a future Congress to include, in addition to your 23 per cent tax on America’s productivity, a tax calculated from those evil corporate profits, from salaries, from wages, inheritances, tips, etc.
Fact is, your proposal is nothing more than a con job to tighten the iron fist of big government over the people’s productivity and allow government to expand without any checks and balances as is contained in our founding father’s original tax plan.
pigdog wrote:
.I merely asked you to show us a bill you have before congress expressing your "tax plan" in some detail and showing us some economic studies that demonstrate it is revenue neutral as well as meets the ofher few criteria that the Presedent has put forth. Since you seem unable to do that, we'll consider this to be the self-effacing piffle it really is.
Of course you asked such a silly question. And I responded My plan? What I support pal, is not my plan, but the founding fathers original tax plan and its various checks and balances which were designed to control Congress' actions, and also provides an intended method to extinguish deficits in a manner making every member of Congress immediately accountable to their state legislature for their spending habits while in Congress Assembled.
pigdog wrote:
Apportioning to the states left the scene many years ago ... or perhaps you didn't notice. Stop wasting bandwidth with your nonsense. Show us how your "plan" would raise sufficient funds to run the government and how it would be anything other than oppressive on poorer states (which was one of the reasons for its downfall originally)
. My plan? Still telling fibs? My, my!
Apportioning a direct tax among the states to extinguish an annual deficit created by Congress is only part of the Founder’s Plan. Their plan also provides for impost and duties [taxing at our borders edge], and also provides for an internal tax on specifically chosen articles of consumption, which is far different than your big government friendly across the board 23 percent tax on goods and services, which is a consumption tax idea very different than what the founders intended, and contains no checks and balances to encourage Congress to follow sound fiscal policies beneficial to America’s business, industries and labor, and allows Congress to engaged in reckless borrowing without any moment of accountability
Truth is, our founding fathers also liked the idea of taxing consumption, but never intended such a tax to be laid upon the tools of production, supplies necessary to conduct America’s businesses nor the necessities of life!
See: Federalist #21:
"Imposts, excises, and, in general, all duties upon articles of consumption, may be compared to a fluid, which will, in time, find its level with the means of paying them. The amount to be contributed by each citizen will in a degree be at his own option, and can be regulated by an attention to his resources. The rich may be extravagant, the poor can be frugal; and private oppression may always be avoided by a judicious selection of objects proper for such impositions. " "It is a signal advantage of taxes on articles of consumption that they contain in their own nature a security against excess. They prescribe their own limit, which cannot be exceeded without defeating the end proposed - that is, an extension of the revenue."
Now, what is Hamilton talking about? How may the amounts to be contributed by the rich and poor be determined by their own option? And, how is private oppression of taxes on articles of consumption to be avoided?
Surprise! The answer is to be found in that part of the quote which says, “by a judicious selection of objects proper for such impositions” which is not the kind of tax an across the board tax on America’s productivity is and would oppress America’s businesses, industries and poor working people.
An across the board consumption tax, in addition to being oppressive upon America’s businesses, is a plan to tax the food a mother buys to feed her child, taxes the clothing she purchases to cloth that child, taxes the fuel used to heat that child’s room during winter, taxes the medicine a mother needs to care for a sickly child, and then taxes the coffin used to bury her child because she could not afford the taxes imposed upon the necessities of life!
The words of Hamilton obviously indicate certain articles of consumption ought to be excluded from the list of taxable items___ the necessities of life, tools of production and supplies necessary to conduct American businesses___ thereby removing the oppressive nature of taxation and making the tax a more voluntarily paid type of tax, which is exactly what our founding fathers practiced.
A consumption tax plan ought to be limited to articles of luxury, and each article must be individually selected by Congress, and then the appropriate amount of tax determined for each specific item chosen, just as was done in THE FIRST REVENUE RAISING ACT FOR OUR COUNTRY! NOTE: those interested may use the PREV IMAGE and NEXT IMAGE buttons at the above link to study the bill___it is refreshing to study statesmen creating a revenue raising bill beneficial for America’s businesses, industries and labor force, as opposed to politicians acting in their own self interest and on behalf of internationalists who have no allegiance to America or any nation [the NAFTA - CAFTA CROWD on Capitol Hill].
Limiting the tax to articles of luxury, and requiring each article to be individually selected and having Congress place a specific amount of tax upon each article chosen, as our founding fathers intended, creates a self regulating check and balance upon Congress, just as Hamilton indicates!
If Congress does its job properly and the nation as a whole is productive and prosperous, the purchase of articles of luxury will undoubtedly increase, and with it, the flow of revenue into the common treasury. But, if the legislative policies of Congress are burdensome and its regulatory requirements upon business, industry and our nation’s labor force impede a flourishing economy, or any particular article is excessively taxed by Congress, the first sign would be is a decline in the flow of revenue into the national treasury and thereby defeat an extension of the revenue, just as Hamilton explains above!
For a recent example of how effective the founder's method of taxing consumption works to control the amount of tax on a specific article chosen by Congress see:Fed luxury tax 1990 in which Congress attempted to lay an outrageous 10 percent tax on boats. And then see: 1991 legislation to repeal the luxury excise tax on boats
Had the tax been one or two percent rather than the outrageous 10 percent, it probably would have been paid without much resistance and not adversely affect the industries involved which caused Congress to immediately repeal the tax, and prevented an extension of the revenue!
Bottom line, Pal, unlike your establishment big government friendly H.R. 25, our founder's plan grants almost unlimited power to raise essential revenue, but also provides various checks and balances to control the actions of Congress and makes Congress immediately accountable if it should engage in reckless borrowing by the direct apportioned tax___ a tax which makes members of Congress immediately accountable to their State’s Governor and Legislature who are required to raise their state’s apportioned share of the tax, only to then send it off to Washington, D.C.
pigdog wrote:
"Your daydream will never make it before Congress for a vote unless you have it in bill form and it is precisely that we need to see. Until then, you're just continuing to rant and rave only to boost your own ego."
I have confidence the people will see through your tax illusion! The only stinking tax reform we need is for the American People to demand their employees in Washington add the following words to our Constitution which brings us back to our founding father’s plan:
“The Sixteenth Amendment is hereby repealed and Congress is henceforth forbidden to lay “any” tax or burden calculated from profits, gains, interest, salaries, wages, tips, inheritances or any other lawfully realized money“
Just more empty nonsense, John. You still need to bring it before Congress as a tax bill as I said.
Until you do that, it's still piffle.
And all of the comments I've made about the flaws still apply unless you somehow have something in your bill to overcome them.
I look forward to your showing your revenue neurtral calculations, too.
Until then, get lost. Testifying before Congregational committees counts for nothing. Nor does trying to claim you have the only constitutional idea. The FairTax is definitely constitutional also. And it does provide for revenue neutrality which the President has set as one of the requirements. You'll have to figure a way around little things like that. You're just wasting your own time (and mine too) with such nonsense.
As to the revenue neutral feature of H.R. 25 which you boast about, that revenue feature is nothing more than a provision to insure the continuance of existing big government without any of the checks and balances our founding fathers intended when granting power to tax consumption as is explained above [see post 435]. Truth is, your tax idea is a welcomed plan by socialists and the friends of big government.
As to H.R. 25 being constitutional, sorry pal, you are wrong again because Congress does not have authority to tax property unless the tax is apportioned among the states and that is what is being taxed under your proposal . . .property, and , the value of the property being sold determines the amount of tax to be paid, which contravenes the constitutional requirement that direct taxes are to be apportioned among the states.
JWK
ACRS
The only stinking tax reform we need is for the American People to demand their employees in Washington add the following words to our Constitution, bringing us back to our founding father‘s original tax plan:
“The Sixteenth Amendment is hereby repealed and Congress is henceforth forbidden to lay “any” tax or burden calculated from profits, gains, interest, salaries, wages, tips, inheritances or any other lawfully realized money.”
The FairTax is both constitutional - and probsably more so that even your tariff-heavy and apportionment schemes - and revenue neutral.
The President has stated that revenue neutrality is one of the things he requires and I've asked you several times to show us your detailed economic presentation that shows your notions to be revenue neutral.
Also, the FairTax does not tax property, but sales to the final consumer. No apportionment is required which, despite your misinformation, did not well in the early history of the country.
Solid — how will Fairtax fans react to finding out the entire math scheme of FT is to CUT the wages of all workers, simlutanousely?
I can answer that, I blog this. They either 1) deny it 2) say Im a liar 3) say so what, it would be a great deal for workers anyway.
Human nature, being what it is, people can’t admit they are wrong, once they have invested any ego or status into a position.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.