10 Outrageous Facts About the Income Tax

Cato Institute ^ | April 15, 2003 | Chris Edwards

[vannrox]

[vannrox]

[vannrox]

[phil_will1]

"I wonder (often) why a sales tax is great for cities and states, but is wrong for the federal government. I'm not pushing for one. I'm just wondering."

I would guess it is more tradition than anything else. Since the income tax has come into being in 1913, it has grown to become the primary source of revenue for the federal government. Of course, the ratification of the 16th amendment in 1913 in effect overruled the judgement of the founding fathers (who had opposed the imposition of an income tax) and that of the Supreme Court in the late 1800s (who ruled an income tax unconstitutional).

Many of us today believe that it was the founding fathers and the Supreme Court of the late 1800s who had it right and the congress of 1913 who had it wrong.

[Axenolith]

I vote we use a guillotine :O)

I think it's more interesting if you sprinkled salt on them to watch them shrivel up...

[Protagoras]

However, their solution - the Flat Tax - is totally inadequate for the magnitude of the problem. It is the equivalent of treating a cancer patient with aspirin. These guys MUST be kidding.

With all due respect, ignorance of the all the policy papers that that Cato produces might lead one to the mistaken, out of context, conclusion that you drew. I realize THIS article, and it's one line, by THIS author, on this ONE NARROW tax issue leads one to think that they think the flat tax is the ultimate solution they recommend.

For a more complete view, please visit their website, go to issues, taxes, and see ALL the articles and studies and possible solutions they offer there.

A consumption tax might be the number one recommendation. Thanks.

[lewislynn]

It is a National Retail Sales Tax, but it has a rebate to make it progressive.

Where does the rebate money come from?

[Publius6961]

Heard a fellow on the radio this morning that suggested 10 members of the US Congress be selected at random and forced to figure their own taxes.
Any Senator or Representative that made a mistake was to be immediately executed.

He guaranteed that the tax code would be simplified by next April 15th. Sounds like it would work to me.

Works for me too.
We just need a catchy name for it. I am serious!

THE ULTIMATE FAIR TAX

[Publius6961]

Progressive?
Socialism, by any other name is still immoral stealing.

Progressive?
Progressive this!

You are free to give any excess that you choose to any one you want. And so am I. Why do we need the power of government to make it real?

[lewislynn]

"I wonder (often) why a sales tax is great for cities and states, but is wrong for the federal government

Because the gross payment tax you're proposing/favor isn't a simple sales tax like a city would have...in fact because it isn't, you can't even be honest about the disclosure of what the rate is.

In other words the 23% tax you tout is really 30% in sales tax terms yet you avoid using the actual rate like the plague...Makes you wonder what else you're/they're lying about.

[tdadams]

I was on the IRS website the other day. I knew it was a tangled mess of Leviathan paperwork, but I had no idea how many forms, schedules, and pages of instruction the IRS publishes. It's truly shameful that we have such a complex system that has obviously been well-carved to cater to the friends of those in Congress.

[Triple]

"What I find interesting as well as outrageous is that there is one very small statutory line that permits the govt to tax its citizenry." - LLT

Which line is that? (Do you mind posting it?)

Regards,

[lilylangtree]

I should have said "one sentence" vice "one line". See below:

Amendment XVI (1913)
The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several states, and without regard to any census of enumeration.

[Triple]

Thanks.

I thought you had the statute tht congress passed, once it was provided the constitutoinal authority to do so in 1913.

If you have that ( the law that congressed passed, subsequent to that constitutional amendment, that requires the filing and payment of income taxes, that is what I'm looking for. (and I thought that is what you had given your 'statutory' reference)

Thanks anyway,

[lilylangtree]

Have you seen this? http://www.tax.org/Museum/default.htm

Maybe it can help you.

[phil_will1]

"I realize THIS article, and it's one line, by THIS author, on this ONE NARROW tax issue leads one to think that they think the flat tax is the ultimate solution they recommend."

I received a very nice e-mail response today from the author stating similar sentiments. He said that he personally would be happy with either one and that there is a diversity of opinion among the organization's tax scholars.

However, he then said something that knocked my socks off. He said that the Hall-Rubushka Flat Tax was economically identical to a consumption tax. I want to write him back and diplomatically ask him how he figures that. The Flat Tax retains the corporate income and payroll taxes and therefore imbeds the cost of our system in goods produced here. For that reason, it would not address the handicap that the current tax system places US producers under. Also, I wonder how many pages the system would be if the Flat Tax were passed. As the current graph shows, it currently exceeds 54,000. I would bet that it would still exceed 45,000 under the Flat Tax. Assuming that compliance costs are roughly proportionate to the size and complexity of the Code, that means that compliance costs savings would be nominal, at least compared to the potential savings under the FairTax.

I may be missing something, but I don't consider the FairTax and the Flat Tax to be economically equivalent at all. Compliance cost savings and price shifts to make US production more price competitive in the US and around the world are probably the two biggest reasons that the FairTax would create enormous economic stimulus and the Flat Tax would appear to come up short in both areas.

[phil_will1]

"Where does the rebate money come from?"

As if you didn't know. Go play your silly games somewhere else.

[phil_will1]

"In other words the 23% tax you tout is really 30% in sales tax terms yet you avoid using the actual rate like the plague...Makes you wonder what else you're/they're lying about."

For the benefit of you other posters/lurkers on this thread, LewisLynn is a longtime basher of the FairTax who uses a number of other login IDs, including Balrog666, LiberalLarry and who knows how many others, to make it appear that the opposition to the FairTax is much greater than it is. He has denied using those tactics in the past.

I will let the other readers decide for themselves who the liar is.