Effort to dump income tax gains steam

WorldNetDaily ^ | March 5, 2004 | Ron Strom

[pending]

Who doesnt relish the idea of a "for rent" sign on IRS buildings?

But 23%?

That absurd number causes me to reel away in horror.
It is so horrendous that it
should be used to demonstrate the real tax burden,
in reasonable argument of the need for
further cuts.

Dancing around how we collect it will do
nothing except run the real risk of
decreasing consumption and potentially
grinding the economy to a halt.

On large puchases, would folks finance the tax, pay interest?
Is the tax taken up front?

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

*****
This number would have to be in the single digits to have any chance of public acceptance.

[P.O.E.]

The current tax code is a huge industry. Lawyers, accountants, lobbyists, office clerks, the IRS itself, etc. Large businesses have whole departments dedicated to taxes. They will not be put out of work without a fight, and many of them are well-connected.

The biggest obstacle is legislators themselves. The tax code is how a lot of patronage is spooled out.

Unless one changes the underlying political dynamic, tax reform will remain elusive.

[ancient_geezer]

But 23%?

That absurd number causes me to reel away in horror.
It is so horrendous that it
should be used to demonstrate the real tax burden,
in reasonable argument of the need for
further cuts.

Effective Total Federal Tax Rate (Percent of gross income)
Income Category	1977	1979	1981	1983	1985	1987	1989	1991	1993	1995	Projected 1999
All Families	22.8	23.4	23.5	21.4	21.8	22.6	22.5	22.6	23.5	24.7	24.2

Data from IRS collections statistics and The Bureau of Economic Analysis as compiled in tabular form by the Congressional Budget Office.
http://www.cbo.gov/showdoc.cfm?index=1545&from=4&sequence=0

Problem is that the greatest precentage of folks never recognize the burden for all they really percieve is their net tax owed at the bottom of the 1040. That usually returns them something, even if it is there own money.

A government which robs Peter to pay Paul can always depend on the support of Paul.
-George Bernard Shaw

Those who perceive little burden play the role of Poor little Paul:

Effective Individual Federal Income Tax Rate (Percent of gross income)
Income Category	1977	1979	1981	1983	1985	1987	1989	1991	1993	1995	Projected 1999
Lowest Quintile	-0.6	-0.8	-0.2	-0.5	-0.2	-1.3	-1.9	-2.9	-3.4	-5.6	-6.8
Second Quintile	3.6	3.9	4.6	3.5	3.9	3.2	3.3	2.7	1.8	1.8	0.9
Middle Quintile	7.1	7.5	8.3	6.8	6.8	6.1	6.5	6.3	5.9	6.1	5.4

Those that readily perceive some of the burden.

Effective Individual Federal Income Tax Rate (Percent of gross income)
Income Category	1977	1979	1981	1983	1985	1987	1989	1991	1993	1995	Projected 1999
Fourth Quintile	9.7	10.4	11.3	9.5	9.3	8.7	8.9	8.7	8.5	8.7	8.4
Highest Quintile	15.8	16.3	17.1	14.5	14.3	15.1	15.1	14.8	15.5	16.2	16.1

To play the role of mean ole Rich Peter.

While Congress plays both ends against the middle; hiding the real burden in inflation, higher prices on all goods and services, lower takehome pay, lower return on investment, and higher interest rates. All keeping the poor right where they are and pushing for more freebees.

Right now the bottom 60% perceive little to no "Individual Income Tax" burden,(in many cases even a handout) and 70% of the voting public clamor for more from government looking for the top 40% of income earners/producers to foot the bill. That perception continues to grow ever stronger by eliminating even more participants from the Federal Individual Income Tax rolls as proposed in the tax reduction proposals through changes in personal exemption limits and other mechanisms such as the EITC.

Walter Williams, World Net Daily, 10-25-2000

If you're among those who pay little or no federal income taxes, what do you care about tax cuts? *** So many Americans paying little or no federal taxes makes for a natural spending constituency. It's like me in the restaurant: What do I care about extravagance if you're footing the bill?

[pending]

Another thought, here in New England New Hampshire alone has no state income tax. So naturally, they have border stores for all things, well attended by residents of the other states.

I can easily imagine giant malls in Canada and Mexico, and the development of a "Television Underground".

Or Buy your big screen TV from the Mexican/canadian internet supplier, delivered to your door. Or a Chinese based company warehousing there.
Do you set up a sales tax police force? Review all the international documentation? Yikes.

I would love to be ebnthusiastic about this, but the supporting arguments are far too sophisticated and technical to have any chance against the anticipated
Drat media soundbyte war.

[pending]

oops "Another thought, here in New England New Hampshire alone has no state income tax."

That, and more correctly here, no sales tax.

[ancient_geezer]

Dancing around how we collect it will do
nothing except run the real risk of
decreasing consumption and potentially
grinding the economy to a halt.

Baloney, see reply #55 above.

Furthermore, making the real tax burden visible is the whole issue. You pay that 23% and more now whether you recognize it or not, so does everyone else (embedded into the price of products).

If people cannot perceive the tax that is upon them, they blame everyone but the real culprits(Congress Critters) for not having enough to live on.

Once the real cost of government is visible even to that welfare mother out there, then things start becoming possible in reversing the trend of growth in government.

To remove taxation of the individual, is to remove the goad which assures accountability of government to the electorate. Federal tax rates are high because a majority of the electorate do not share proportionately in the burden their demand for largesse imposes on the minority of citizens.

The siren call for representation without taxation is the formula that got us where we are at today. The ability to hide or disguise taxation from the view of large sectors of the electorate allows the Congress to get away with the creation of the evergrowing monster that it fosters.

Liberty and freedom have a price, responsibility. If that price is avoided there are no brakes on the growth of government, the ultimate result is the end of freedom through creeping socialism.

[ancient_geezer]

On large puchases, would folks finance the tax, pay interest?
Is the tax taken up front?

What do you do now under the income/payroll tax system. Why would anything change just because you get your full gross pay in hand, instead of government whacking you on it before you even get it.

Secondly see reply #40, 20-25% of what you now pay in the price for large ticket item, will decrease prices such that shelfprice + NRST is the same amount that you see a shelf price today.

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

Do they now? If you purchase anything on credit today, more than 25% of the price you are paying is embedded federal taxation. You get any discount in loan interest rates because of that?

[ancient_geezer]

This number would have to be in the single digits to have any chance of public acceptance.

Effective Total Federal Tax Rate (Percent of gross income)
Income Category	1977	1979	1981	1983	1985	1987	1989	1991	1993	1995	Projected 1999
All Families	22.8	23.4	23.5	21.4	21.8	22.6	22.5	22.6	23.5	24.7	24.2

Data from IRS collections statistics and The Bureau of Economic Analysis as compiled in tabular form by the Congressional Budget Office.
http://www.cbo.gov/showdoc.cfm?index=1545&from=4&sequence=0

& 70% of the voting public clamor for more from government

Think maybe if they see what they really pay they might change their minds alittle?

23%........... Effective total federal tax rate with respect to consumption expenditure

14.91% ..... rate if Social Security and Medicare were eliminated
14% .......... rate if Nat'l Endowment for the Arts were eliminated
11.9%........ rate if Dept. of Education were eliminated
10% .......... rate if welfare were eliminated
9.8%.......... rate if foreign aid were eliminated
etc.

Single digits, quite possible once the horseblinder are remove from the eyes of the electorate. But not before that happen, as history demonstrates all to clearly.

[ancient_geezer]

I just hope they make sure to remove the "roots" of the oppressive income tax, by repealing the 16th Amendment.

That way, just like when you eradicate poison ivy, it won't come back!

It's up to us to make sure it gets done properly and with express prohibition of all income taxes not just repeal of the 16th(otherwise taxes on wages and employments remain possible):

H.J.RES.61
Title: Proposing an amendment to the Constitution of the United States to abolish the Federal income tax.
Sponsor: Rep Johnson, Sam [TX-3] (introduced 6/24/2003)      Cosponsors: 5
Latest Major Action: 9/4/2003 Referred to House subcommittee. Status: Referred to the Subcommittee on the Constitution.

That will never happen with out a viable replacement tax system in place first, and total public support to achieve the necessary 2/3rd of both Houses of Congress plus 3/4ths of the states necessary for ratification.

[ancient_geezer]

I would love to be ebnthusiastic about this, but the supporting arguments are far too sophisticated and technical to have any chance against the anticipated
Drat media soundbyte war.

Soundbytes? no problem.

-- a free people that pays slave taxes to its government is willingly training itself for bondage.
Alan Keyes 1999

[Montesquieu wrote in Spirit of the Laws, XIII,c.14:]

• "A capitation is more natural to slavery; a duty on merchandise is more natural to liberty, by reason it has not so direct a relation to the person."
  --Thomas Jefferson: copied into his Commonplace Book.

 

[4edm 4ever]

Only newly built structures will carry the cost of taxation. Therefore, your existing home will not lose value relative to new homes.

For example, if prices on new homes drop 20%, adding the tax back into the price will make it three percent higher than today. The sale of your existing home will not be taxed (the tax was already paid as part of the embedded cost of building it before the FairTax), therefore it will retain it's current price in relationship to new homes.

If prices don't drop (they will!), then your existing home would be worth 23% more than it is today. It would still be relative to new home prices. Because everyone would have more money in their pocket and the economy would start growing at a much faster rate, demand would likely increase for all homes.

Raw land will not be taxed until it is determined whether it will be used for personal consumption or business input. By itself, I believe it is treated as any other investment under the FairTax (not taxed).

[ancient_geezer]

I can easily imagine giant malls in Canada and Mexico, and the development of a "Television Underground".

Or Buy your big screen TV from the Mexican/canadian internet supplier, delivered to your door. Or a Chinese based company warehousing there.

Federalist #21:

"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.

 

---

 

You were the one wanting single digit rates, were you not?

the tax burden that a family of four will have at various annual income levels (or in this case, annual spending levels).

H.R.25 "The FairTax Act

 

---

 

Do you set up a sales tax police force?

You let the state tax authorities do the same job they do now in 45 of the 50 states that collect their own retail sales taxes.

H.R.25, S.1493
A bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national retail sales tax to be administered primarily by the States.

Refer: http://www.fairtax.org & http://www.salestax.org

[scripter]

If you would like to be added to this ping list let me know.

Please add me to your ping list. Being on the ping list will help remind me to look for similar articles, and then perhaps I can beat you to posting more articles. :-)

[edchambers]

(snip)I would need to see more evidence than one Harvard professor, because if prices did not drop as they say, the 23% would be very costly -- indeed, crippling.(snip)

Not necessarily considering that you're probably already paying that and more in income tax now not to mention FICA

[ancient_geezer]

Being on the ping list will help remind me to look for similar articles, and then perhaps I can beat you to posting more articles. :-)

And then I can sleep late in the morning.

You just bought your way onto my very exclusive ping list LOL.

[allrightythen]

Dont they just print the money? Therefore the US Government does not need to raise money thru taxation. We were clearly told that some years ago, and things havent changed. I'm sure you have read (and understand) Beardsley Rumls 1946 speach.

[Texas Patriot]

Hmm I like the Idea, I really do. And further more I am for it! I would love to get a 25% to 30% pay raise (I mean who wouldn’t?) but I do have a question though that I haven’t found a readily available answer for. As I understand it one would only pay taxes on things at the retail outlet or its equivalent. So lets say I buy a house, car or gun “new” and I pay taxes on them, then a couple of years later I sell the house does the one who buys it pay any tax, as I understand it no, same for the car and gun right? Then would this be the result a decrease in demand for new goods and an increase in demand for used ones? What effect would that have on the manufacturing end of our economy?
However thinking about it I guess there might be an initial negative effect, but would that straightens out over time?
And about this 20% to 25% in prices I really don’t think so. Yes, yes I understand the math but your not taking into account the human factor, GREED in effect your telling everyone from the small business owner to Exxon and GM that if this went through by just keeping prices as they are, or maybe just a small 5% or 6% drop for show, that they would see up to 20% in crease in profits!
I prefer to look at it this way, say this goes through “the man” stops getting in my paycheck therefore I get a say 25% raise but so what if prices do stay the same I’m still bringing home 25% more $$$ I’m still happy, corporate America is happy because their profits go up lets just say 20% and lets say half of that goes into investing in more business and better raises ( don’t laugh to hard ) and because people like me have more money we spend more thus increasing demand so since they have the money and the demand they create more jobs.
All this sounds great and like I said earlier I’m all for it but I would like to see a couple of safe guards included like once enacted it in order to raise it would take either a super majority in both houses and the presidents signature or a national referendum or in the event of a formal declaration of war it could be an automatic 5% or something like that.
I know that there is no perfect form of taxation and there will always be those who will find ways to circumvent the system but I do think that this form of taxation is straight forward and much fairer than the others

[is_is]

"I would need to see more evidence than one Harvard professor, because if prices did not drop as they say, the 23% would be very costly -- indeed, crippling."

Why would prices have to drop....your salary would increase 8% almost just from social security not being witheld PLUS your income tax witholding....how much is that extra in your pocket EVERY week?...NOT TO MENTION THE POVERTY LINE REBATE CHECK EVERY MONTH!!!

[Wolfie]

Dream on...