Effort to dump income tax gains steam

WorldNetDaily ^ | March 5, 2004 | Ron Strom

[scripter]

An effort to do away with federal income tax and replace it with a national consumption tax is gaining steam, as activists strive to get at least 100 members of the House of Representatives on board by Independence Day.

"We think we'll be at 100 co-sponsors by July 4," Tom Wright, executive director of Americans for Fair Taxation, told WND.

Wright noted the House bill, H.R. 25, added its latest co-sponsor this week – Republican Rep. Barbara Cubin of Wyoming – bringing the total to 44.

"We're working with our grass-roots people across the country" to get to the goal, Wright said. H.R. 25, the Fair Tax Act, is sponsored by Rep. John Linder, R-Ga., who has sponsored similar legislation for the last several years. The latest version of the bill was introduced Jan. 7, 2003.

"The current federal income tax system is broken. Patching up the existing code is pointless. It's time for a fresh approach, a fair approach. It's time for the FairTax," says the group's website.

"From its humble beginnings, the income tax has grown like a cancer by taxing our hard work and discouraging savings and investment."

H.R. 25 would eliminate the federal income tax and replace it with a 23 percent consumption tax paid by the end user. That means business-to-business purchases for the production of goods and services would not be taxed. The organization estimates consumer prices will drop by an estimated 20-30 percent as a result of the change.

The group's website describes how the bill's rebate function works. It assures that those living in poverty would not pay any tax.

"Under the FairTax, no American will pay taxes on necessities. The rebate will be equivalent to the tax paid on essential goods and services. The rebate will be mailed before the tax is actually paid [and] will be paid in equal installments at the beginning of the month. The size of the monthly rebate will be determined by the federal poverty level for a particular household size."

Wright touted the support of the American Farm Bureau. The organization has been educating its membership on the bill, and many state chapters have given the bill legislative priority.

Dumping the income tax has become a campaign issue in many political races this year, Wright says.

"All over Texas, House candidates are supporting it," he said, mentioning races in other states as well.

Wright noted the bill's cause is helped every time Social Security reform is discussed, since, under the plan, the entitlement program would be supported by the consumption tax instead of what he calls the "regressive" Social Security tax.

Americans for Fair Taxation says the first year the plan goes into effect, revenue to the federal government would remain the same. From there, the group claims, revenue will grow due to increased economic activity.

H.R. 25 is pending in the House Ways and Means Committee and has not had a hearing. Once the sponsorship level grows to 100, however, Wright thinks Chairman Bill Thomas, R-Calif., will take action on the bill.

The bill's Senate version is S.1493, sponsored by Sen. Saxby Chambliss, R-Ga., which was introduced in July.

WND columnist Neal Boortz is a supporter of the plan. In an August column, he addressed the issue of why the idea hasn't been enacted already.

"And just why hasn't it passed?" he wrote. "Because the idea is so bold that many politicians, while personally praising the concept, just assume it can't pass.

"It can pass, my friends. It can pass if the people of America learn the details and then let their elected officials know that they want some action."

Previous stories:

Income tax to end within few years?

National sales tax gains momentum

Group plans 'fair tax' convention

Congress to consider 'fair tax'

Tax reform drive builds steam

[Taxman]

ROFOL, Ray! All of the above!

[lewislynn]

A 23% tax on a major purchase like a new car or home could be a major burden,

You've fallen for the 23% lie. The tax is "23% of the gross payment" (including itself).

`(1) FOR 2005- In the calendar year 2005, the rate of tax is 23 percent of the gross payments for the taxable property or service.

That equates to 30+ percent increase in price. Notice the tax is "of the gross payment...gross payment being all other taxes, fees, excises and anything else tacked on to the "payment" would also be taxed 30%. They'll claim the term "gross payment" doesn't really mean "gross payment". Keeping in mind the governments hunger for spending your money you decide what that means and what kind of favors they'll be doing you.

BUT they say that prices will also drop 20 - 30% because of the hidden income taxes that are already built into the products

There is NOT 20 to 30% federal income taxes "hidden" into any product at the retail level...NO business would survive paying 20 to 30% of their gross in taxes. Most products aren't even made here anymore anyway....THINK!

[lewislynn]

I'm sure a President Kerry would make eliminating the income tax his first priority.

Like George did?

[Hostage]

Yeah, there are cheaters and scammers.

It goes beyond a simple handwave of 'yeah there are cheaters'.

Watch the Frontline piece. You will see that the nation's biggest accounting firms are engaging in sham transactions and accounting flips to help corporations and individuals evade not avoid income taxation.

The abuse steps over the line to lies and deceit. The big accounting firms are making hundreds of millions of $$$ pushing tax scams onto unwitting clients, and saying while doing so that everyone does it, the government is powerless to do anything about it.

I think we agree about the negative behavior caused by the tax code.

But try to understand this. The characters who are presently involved, and they are at the highest ranks within the big accounting firms, exhibit such unscrupulous conduct, unethical to the extreme, that I would bet heavily that these individuals would find a way to sham an NST.

In other words, these guys are criminals no matter what the tax code looks like. That was my point.

[lewislynn]

Part of the process of implementing the Fair Tax is the revocation of the 16th Amendment killing the Federal Income tax.

No it isn't.

Simply saying it "should" be done doesn't make it part of the processs.

[lewislynn]

Try this out-- the manufacturers no longer have to comply with the IRS. No more employee withholding.

Wrong.

`SEC. 903. WAGES TO BE REPORTED TO SOCIAL SECURITY ADMINISTRATION.

`(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

There's little difference between witholding it and reporting it.

[Fiddlstix]

Bump

[lewislynn]

There are many thousands of people involved in developing and manufacturing a vehicle - they all pay income taxes!

They'll be paid without withholding taxes...no gain there.

[lewislynn]

Would finance companies have to carry and collect this debt for free?

No they'll charge a fee and you'll pay a 30% tax on that too.

[lewislynn]

Lets see, 20-25% fall in prices + a 23% tax == OMG the same as now.

You're such a fraud. You know the tax isn't 23% in that context.

Never mind that they can't, but even if the prices could fall 20-25% (I thought it was 20 to 30% a minute ago) the tax increases the pice 30%...not 23%...

Same as now?...Not even close.

[SERE_DOC]

So you are satifisfied to keep things as they are without trying to change?

No

Congress are actually trying to make it happen

And for how long have they been trying to do this, without it happening?

I don't like it, but to think that Washington actually gives a hoot about the masses and limiting their power one needs to give up crack and smell reality

[Paul C. Jesup]

You forgot the sarcasm tag.

[scott7278]

Thank you for the information...

[ancient_geezer]

I'm sure you have read (and understand) Beardsley Rumls 1946 speach.

Sure do, if you want government using income taxes for social, political and economic engineering you can have it too, somewhere else.

There is only one function authorised and mandated under the constitution for taxation:

Constitution for the United States of America:

• Article I Section 8: "The Congress shall have power to lay and collect taxes, duties, imposts and excises,
  to pay the debts and provide for the common defense and general welfare of the United States;

Don't see inflate you way out or social, economic, or political engineering in there do you?

[mil-vet]

You people just don't get it - a consumption tax is NOT the way to go - a FLAT TAX would be far simpler, cheaper to administer, kinder to lower income folks, and isn't as easy to hide malfeasance as it is with a consumption tax (which has happened almost everywhere - if not everywhere - it's been tried).

I've done the numbers - I've had y'all show me your numbers, and you're wrong.

I'm not going to argue - I'm gonna wait and, if this foolishness (consumption tax, not the overhaul of the current system which is so badly needed - at least we agree on THAT!) goes through, it'll only be a matter of time before I'll refrain from saying "Toldja so"....

[ancient_geezer]

You're such a fraud. You know the tax isn't 23% in that context.

Income/Payroll tax case:

Lets see $100 today. 23% income/payroll taxation embedded.

.23 * $100 = $23, $77 kept by retailer with the 23% due to income & payroll taxation removed,

That $23 tax going to governent via many different routes embedded into all production levels for the product.

NRST case:

A retail seller (who is legally liable for reporting and remitting the NRST) merely multiplies sales revenue received by sales tax rate to determine what he should remit to tax authority.

Retailer receives $100, end of month he multiplies 100* 0.23 = $23 that he sends to state tax authority, and keeps $77.

Works out fine lewislynn.

The customer pays $77 for product, and $23 tax on purchase, both of which are list on his receipt.

The retailer keeps $77 for the product and remits $23 tax.

Same tax paid in the income/payroll situation, as the NRST.

[ancient_geezer]

but to think that Washington actually gives a hoot about the masses and limiting their power one needs to give up crack and smell reality

Washington, cares about staying in their cushy jobs.

The voter cares about how they are taxed.

Who sits put Congress Critters in and allows them to stay there.

It's up to you how you will be taxed. NOT Congress Critters who can you can replace.

[phil_will1]

"However, I have a $130,000 investment in my house that I bought prior to this proposed tax plan. If I decide to sell it, after such a tax is inacted, I will have to discount it 20% or more just to be competitive with a NEW house that was built under the new tax rules."

I shared your concern about real estate values until I noodled through it (with some help) a bit. The after tax price of houses built after implementation will be approximately the same. This rationale is the same as with any manufactured product - the cost of the current tax system is removed from the various levels in the supply chain and prices decline as a result of competitive pressures. The new house costs app. the same (after-tax) as it would have cost befoe that sales tax was implemented. The house across the street which was built before the tax went into effect would not have to have the sales tax levied on it when it is sold. Say both houses sold for $130K. The $130K on the new one included the sales tax. The buyer had the option of buying the new one where part of the $130K is the sales tax or the older one for $130K on which no sales tax is charged. Property values will not be adversely affected.

On the other hand, property values should rise because (1) interest rates will fall 25 - 30%, (2) workers will take home their entire paychecks, and (3) economic growth will be substantially higher.

[unixfox]

PINGING G.W.B., A.K.A. POTUS !!

[phil_will1]

"There is NOT 20 to 30% federal income taxes "hidden" into any product at the retail level...NO business would survive paying 20 to 30% of their gross in taxes."

LewisLynn aka LiberalLarry has been making the same deliberate distortions on FR for years now. I am going to clarify this point not for his benefit, but so that he doesn't confuse others on here, as he is attempting to do.

The imbedded taxes do not include merely the corporate income taxes that the end seller pays. They include the taxes and their attendent compliance costs of the final seller and the suppliers at each level of the supply chain. The deeper the supply chain, the greater the embedded taxes. That is why embedded taxes are always quoted as a range.