Senator Cruz on tax reform: Abolish the IRS

1/18/2015 | johnwk

[JOHN W K]

I wonder why Senator Cruz said we cannot get meaningful tax reform while Obama is president. He probably was referring to the president's veto power. But if the Republican controlled Congress sent an amendment to the states such as the FAIR SHARE BALANCED BUDGET AMENDMENT, it would effectively remove Obama from the process. Is it possible that Senator Cruz may have missed this pathway to real tax reform? Keep in mind that Republican Governors are in control in a majority of the States! Sending an amendment to the states at this point in time which offers real tax reform seems like a good idea!

JWK

“Honest money and honest taxation, the Key to America’s future Prosperity“___ from “Prosperity Restored by the State Rate Tax Plan”, no longer in print.

[central_va]

I'm not thrilled with the amount of income tax I pay either. But the idea that we can fund the government through tariffs is not realistic.

I said an additional consumption tax (NRST) would be needed. Income taxes are evil. Pass it on.

[Sirius Lee]

The IRS isn’t about collecting revenue - that comes from the fed reserve’s bottomless credit card. The IRS in its modern configuration exists solely as a hammer to be swung whenever elements within the population become uppity. It’s the Bureau of Law by Whim. Every American is already guilty until proven innocent. Who gets prosecuted is purely a political decision - and the courts go along with this farce.

[zeugma]

Why not go with the FAIR SHARE BALANCED BUDGET AMENDMENT which would return us to our Constitution's original plan as our founders intended it to operate?

Do you have the text for that?

[yefragetuwrabrumuy]

Okay, let’s crunch the numbers, assuming a 50% tariff, as it was for most goods in the beginning.

The USD value of all goods and services imported into the US in 2013 was $2,770,400,000,000. Let’s say $2.77 trillion.

50% of that would be $1.385 trillion, assuming all exporters could afford to continue to export to the US. If so, that is less than the current (2013) US budget of $2.74 trillion.

On the strongly plus side, most exporters would be unable to sell in the US for 50% more, so would no longer export to the US. This would require that the US rebuild much of its industry to provide us with the goods and services we wanted.

In turn, our export industries would be wiped out because foreign nations would no longer be able to afford our goods. The US would probably have enormous inflation.

The bottom line is that it might be good for the US in the long term, but it would be very painful to us to get to a new state of economic equilibrium. So it would have to be planned very methodically.

[central_va]

In turn, our export industries would be wiped out because foreign nations would no longer be able to afford our goods. The US would probably have enormous inflation.

The foreigners are not buying our stuff now due either to we don't make it anymore or it is tariff'ed by them already(other nations). So this part of your argument holds no water. The rest is ok but the economic stimulus of rebuilding our industries would be like WWII econnomically. It would be fabulous.

[Osage Orange]

Second that!!!

[yefragetuwrabrumuy]

US exports of goods and services in 2013 were $2.3 trillion. So it was $2.77 trillion in, and $2.3 trillion out.

[central_va]

US exports of goods and services in 2013 were $2.3 trillion. So it was $2.77 trillion in, and $2.3 trillion out.

Everything we export gets tariff'ed. I think the only country that doesn't charge us a duty is Singapore. LOL.

[JOHN W K]

See the OP for a rough draft of the FAIR SHARE BALANCED BUDGET AMENDMENT.

JWK

[JOHN W K]

With all due respect and sincerity, a national sales tax is a bad idea. Taxing consumption as our Founders intended is a very good idea.

Hamilton stresses in Federalist No 21 regarding taxes on articles of consumption:

“There is no method of steering clear of this inconvenience, but by authorizing the national government to raise its own revenues in its own way. 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. If inequalities should arise in some States from duties on particular objects, these will, in all probability, be counter balanced by proportional inequalities in other States, from the duties on other objects. In the course of time and things, an equilibrium, as far as it is attainable in so complicated a subject, will be established everywhere. Or, if inequalities should still exist, they would neither be so great in their degree, so uniform in their operation, nor so odious in their appearance, as those which would necessarily spring from quotas, upon any scale that can possibly be devised.


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. When applied to this object, the saying is as just as it is witty, that, "in political arithmetic, two and two do not always make four .'' If duties are too high, they lessen the consumption; the collection is eluded; and the product to the treasury is not so great as when they are confined within proper and moderate bounds. This forms a complete barrier against any material oppression of the citizens by taxes of this class, and is itself a natural limitation of the power of imposing them.”


Let us say for conversation purposes that Congress is only allowed to raise its revenue by selecting specific articles of luxury and placing a specific amount of tax on each article selected. The flow of revenue into the federal treasury under such an idea would of course be determined by the economic productivity of the nation. If the economy is healthy and thriving and employment is at a peak, the purchase of articles of luxury will be greater than if the economy is stagnant and depressed. And thus, Congress is encouraged to adopt policies favorable to a healthy and vibrant economy because the flow of revenue into the federal treasury can be disrupted should Congress adopt oppressive regulations which impeded and burden our founder’s intended free market system.


And so, if Congress is limited to raising its revenue by taxing specifically selected articles of luxury, it suddenly becomes in Congress’ best interest to work toward a healthy and vibrant economy which in turn produces a productive flow of revenue into the federal treasury! It should also be noted that taxing any specific article too high, will reduce the volume of its sales and diminish the flow of revenue into the national treasury, and thus, taxing in this manner allows the market place to determine the allowable amount of tax on each article selected as Hamilton indicates above.


Some may claim that if Congress is required to select each specific article for taxation and place a specific amount of tax on each article, such a system would invite abuse and allow Congress to exercise favoritism with impunity and would certainly pander to countless lobbyists looking for an advantage in the selection of taxable articles. But let us take a closer look at the consequences involved if Congress should attempt to abuse this power. If Congress should abuse the system and tax one article while excluding another for political gain, consumers are treated to a tax free article and Congress reduces its own flow of revenue into the national treasury. In addition, for every penny lost by excluding a lobbyist’s particular article from taxation, another article’s tax will have to be increased to reclaim that penny. And with each increase upon any specific article the reality of diminished sales becomes a very sobering factor for Congress to deal with as explained by Hamilton in Federalist No. 21.


Finally, under our Constitution’s original tax plan, let us remember that if Congress does not raise sufficient revenue from imposts, duties and miscellaneous excise taxes on specifically chosen article of consumption and spends more than is brought in which creates a deficit, it is at this time that the apportioned tax is to be used to extinguish the deficit created, and each state’s congressional delegation must return home with a bill in hand for its state’s apportioned share of this tax and place this burden upon their Governor and State Legislature, and would deplete their own state’s treasury.


The bottom line is, what do you think would happen if New York State’s big spending Congressional Delegation had to return home with a bill for New York to pay an apportioned share to extinguish the 2013 federal deficit? I kind of think tea parties would change to tar and feather parties and big spenders in Congress would REAP THEIR JUST REWARDS for their irresponsible and tyrannical spending.

Why is it that not one of our “conservative” media personalities [Rush Limbaugh, Glenn Beck, Laura Ingraham, Schnitt, Mark Levin, Dennis Prager, Bill O'rielly, Mike Gallagher, Doc Thompson, Lee Rodgers, Neal Boortz, Mike Huckabee, Tammy Bruce, Monica Crowley, Herman Cain, etc.] will discuss the wisdom of our Constitution’s original tax plan, especially when it paved the way to not only control Congress, but created the economic underpinning which led to America becoming the economic marvel of the world?

Let us not forget by the year 1835, under our constitution’s original tax plan, America was manufacturing everything from steam powered ships, to clothing spun and woven by powered machinery and 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. Why do so many willingly ignore the wisdom of our founding fathers?



JWK



“…a national revenue must be obtained; but the system must be such a one, that, while it secures the object of revenue it shall not be oppressive to our constituents.”___ ___Madison, during the creation of our Nation’s first revenue raising Act