Posted on 03/22/2004 6:47:25 AM PST by ancient_geezer
'It's time to get rid of income taxes'
TIM ROHWER , Staff Writer
03/20/2004
It's time to eliminate income taxes and impose a national sales tax, said U.S. Rep. Steve King, R-5th District [Iowa] on Friday.
"The cost of enforcing the IRS (Internal Revenue Service) is over $1 trillion a year," King said during a visit to Council Bluffs. "We're consuming 9 percent of our Gross National Product just with the IRS. It's time to get rid of income taxes, implode the entire thing."
King's national tax on retail sales and services, also known as the Fair Tax, would mean that people would only pay a 23 percent consumption tax each time they purchased a new item or service, as opposed to paying 43 percent in taxes going to the federal government.
"Everybody keeps the money they earn in their pockets," he said.
What's more, the Fair Tax would provide a prepaid, monthly rebate for every registered household to cover the 23 percent consumption tax spent on necessities up to the federal poverty level, King said. In this manner, the Fair Tax completely untaxes the poor, he said.
It would take a little money to administer this tax, King said, but 45 states already collect sales taxes so the mechanism is there to expand it nationally.
King came to Council Bluffs to formally announce his campaign for a second term as the representative for western Iowa in the House of Representatives.
"This job energizes me," King told a large audience at Bayliss Park Hall.
King said he committed to funding major transportation projects in Council Bluffs, such as the expansion of the city's airport and improvements of the local interstate highway system.
He definitely supports the war on terrorism and criticized presidential candidate John Kerry for calling the Iraqi situation "a law enforcement issue."
It is not unpatriotic for people to hold opinions against the war, but such criticism by presidential candidates aids the enemy, King said.
"When they speak, it's viewed as quasi foreign policy and their words have given significant aid and comfort to the enemy and encourages them to attack America and our allies," King said. "I'm far from alone in that opinion.
This message of appeasement encouraged al-Qaeda to attack Spain."
There are tens of millions of Muslims around the world who support the actions of al-Qaeda and to deal with that their culture must change, he said.
"We must give them freedom or the opportunity for freedom and we've done that in Afghanistan and Iraq," King said.
If Kerry was elected president, the war against terror would be suspended for at least four years, he said.
King also opposes gay marriages.
"It's a violation of Iowa law," he said.
America must support the institution of marriage between a man and a woman, he said.
"Every civilization throughout history supported a man and a woman in holy matrimony and raising children," King said.
"The cost of enforcing the \par IRS (Internal Revenue Service) is over $1 trillion a year," \par King said during a visit to Council Bluffs. "We're consuming 9 percent of our Gross National Product just with the IRS. It's time to get rid of income taxes, implode the entire thing."
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John Linder in the House & Saxby Chambliss Senate, offer a comprehensive bill to kill all income and payroll taxes outright, and provide a IRS free replacement in the form of a pure consumption tax:
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.
He needs to provide a source for this data. I'd love to see one.
I support getting rid of the income tax, but this $1 trillion a year seems way out of whack. That would mean that almost half of the federal budget would be going to IRS enforcement, and I just don't by it. He might be adding in the loss of productivity, and the cost that people pay accountants and advisorts, but he needs to say that if he has the numbers to back it up.
but this $1 trillion a year seems way out of whack.
I presume he is talking about he cost of tax compliance, as defined by Payne in '95. Works out to be over $1Trillion today.
Every time Washington collects a dollar in tax revenues, taxpayers shell out that dollar plus another 65 cents. Why is that? It's not that the IRS is inefficient.
That agency's expenses eat up less than a penny of each dollar it raises. The 65 cents is what it costs taxpayers -- businesses and individuals -- to pony up each dollar. Compliance costs, which come to 24 cents, include the expense of keeping records, staying current with the tax code, and filling out the forms. Enforcement costs, close to 2 cents, include tax-???payers' expense for audits and litigation. We spend 3 cents on tax evasion and avoidance. However, the biggest expense item, at 33 cents, is economic disincentive. "By taking away the fruits of labor and capital," says political economist James L. Payne in his book Costly Returns, "the tax system works to discourage working and investing." So the next time Washington announces a, say, $10-billion program, remember that the real cost is that plus 65 cents per dollar -- or $6.5 billion more.
Costs of the Federal Tax System to Taxpayers for Every Dollar of Revenues Collected
Compliance costs 24¢ Enforcement costs 2¢ Disincentive to production 33¢ Disincentive cost of tax uncertainty 2¢ Evasion and avoidance cost 3¢ Government cost 1¢ Total 65¢ Source: Costly Returns, by James L. Payne (ICS Press, San Francisco, 1993). n
By the time you add taxes and fees that aren't in the actual revenue code and state sales tax, you're back to the old rate. I envision a lot of stuff "falling off trucks" nationwide.
I'm glad you beat me to it, you have the data to back it up. ;-)
I believe that he is and I agree that I would love to see some hard figures on this issue. All of these compliance costs act as a hidden tax burden on every good and service that we use and needs to be eliminated if we ever hope to regain our competitiveness in the global market.
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