Posted on 05/29/2004 4:01:50 AM PDT by Remember_Salamis
BY ERNEST S. CHRISTIAN ONE ARM TIED BEHIND OUR BACK: U.S. Taxes and the International Economy
Thanks to our tax code, United States companies have to compete in the global economy with one arm tied behind their backs. This handicap is partly a result of foreign envy of U.S. competitiveness, but partly a result of our own failure to make a level playing field for businesses (U.S. and foreign) within our own market. Regrettably, our tax code is biased against exports and it favors imports. It also puts a heavy burden on income that U.S. companies make abroad. This policy clearly weakens U.S. companies, and our huge trade deficit is Item #1 for the prosecution. For the economy’s sake, it is time to reform the tax code, allowing U.S. businesses to compete and win in the global economy.
(Excerpt) Read more at ipi.org ...
Taxreform Bump. (The PDF File May Take A While To Load, But It's Not That Long)
Mr. Christian is a long-time WDC tax lawyer/lobbyist who originally supported the Schaeffer/Tauzin NRST legislation introduced in 1997.
That the NRST will solve the problems Mr. Christian points out is indisputable.
Our problem is to get the damn legislation passed!
Let's get to it!
That the NRST will solve the problems Mr. Christian points out is indisputable.
Our problem is to get the damn legislation passed!
Let's get to it!
How bout calling out the troops, or maybe drafting a few more ;O)
A Taxreform bump for you all.
If you would like to be added to this ping list let me know.
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 retail sales tax.
Exports pricing would contain no tax. All, imports would be fully taxed by the NRST providing a significant change in our international trade competitiveness:
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.
a big ping for you all.
Erasing the memory of Jim Traficant now that he's serving time as a convicted felon???
LOL! You NRST shills are Stalinist to the core!!!
Well did you consider this?
Don't you want US companies to compete on an even footing????
It does absolutely nothing to alleviate the burdensome health, safety and environmental regulations and restrictions imposed by the federal government on economic utilization of our natural resources.
Its a revenue bill Willie Green, it doesn't cure baldness either. Revenue bills only address how taxes are to be collected.
If you want those things accomplished then support legislation repealing those programs. And we will be right with you pushing for the same thing.
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.
So lets look at what the maximum it would take to fund those functions clearly authorized under Article I Section 8 of the Constitution, in current dollars:
http://w3.access.gpo.gov/usbudget/fy2001/guide02.html#Spending
- $334 Billion --- Defense & Military related expenditure
- $ 31 Billion ---- Administration of Justice
- $ 16 Billion ---- General Government
- $199 Billion ---- Interest on the Debt
=========================
$580 Billion ---- Total
Institute an across the board, Flat rate, single stage National Retail Sales Tax, which taxes all imports and domestic products with the same rate.
Replacing all current federal tax law with a retail sales tax would be 23% on new goods and services paid and receipted at the retail register. No hidden tax, no exceptions, exemptions everyone participates.
Such a tax acts in a natural manner to encourage the elimination of excess government functions through visibility of burden among all constituencies of the electorate.
The total federal government budget would move from $2,000 billions towards something less than $580 billions calculated.
The across the board federal tax rate on new goods and services would decline towards less than 6.7%.
As tax rate on sales decreases the economic burden on retail items, the sales volumes and growth in the economy would be tremendous allowing even further reductions in tax rates below that less than 6.7% theoretic level.
That is what I perceive as the ultimate achievements possible under a National Retail Sales Tax structured in the manner of the revenue bill H.R.25. Simple common sense applied to the principal of TANSTAAFEL,( no free lunch, everyone participates in paying there way in proportion to the benefit the extract from their consumption.) encourages the natural change in attitudes required of the electorate as regards the burden of government largess in their lives.
- It is fairer to tax people on what they extract from the economy, as roughly measured by their consumption, than to tax them on what they produce for the economy, as roughly measured by their income
Hmmmmmm....... It's do able, with time and effort, once the blinders are removed from the electorate.
The NRST doesn't accomplish that.
Sure looks like it goes a long way towards reversing the situatioon as foreign corporations see it:
Chairman of the House Ways and Means Committee,
Rep. Bill Archer (R-TX)
August 12, 1996
Ask yourself how many of those who are leaving are likely to have been poor. Think about it. The poor have no reason to leave. In fact, it is the poor, who are streaming across our borders in huge numbers, with their hands out. It is the wealthy, who are increasingly being targeted by legislation, aimed primarily at giving the federal government, through their demon spawn, the IRS, more power and control over all wealth.
Since the top 1% of income earners pay over a third of all taxes and the top 5% of income earners pay over half of all taxes, it won't take that many of the wealthy leaving, to make a significant dent in our tax base - a difference that will have to be make up by those who remain. If most of the top 1% of income earners were to leave, it would mean that those who remain would face a 50% increase in the tax burden, to make up the difference. If most of the top 5% of income earners were to leave, the tax load would double, for those who remain.
Of course, not all of those people will leave, nor even be able to leave. Bill Gates is tied to the US by his business. On the other hand, John Templeton, of the Templeton Fund, has already gone to (I think) Bermuda, taking his billions in tax base with him. But, even if only half of the wealthiest people leave, it still presents a tremendous problem. Instead of your tax load doubling, you may only have to pay 50% more than you do today.
Common sense tells us that, with 363,000 plus Americans leaving every year, most of those people are going to be at least somewhat wealthy, since they are the only segment of our population who are being both systematically backed into a corner, by our lawmakers and who have the wherewithal to easily go elsewhere, to escape such mistreatment. It's all about government control of wealth that legislators haven't earned, by further empowering the IRS. That's why all forms of income tax, be they progressive or flat, must be abolished, so as to eliminate the threat of the IRS to our economy.
For a detailed treatment of this subject, see "The Economy Bomb - Ticking Down Faster", where you will find links to authoritative sources for the facts quoted here and much more. The problem, though not yet obvious, is real. By the time it becomes obvious, it may well be too late to do anything about it.
(BTW, the above cited article has taken over 100,000 hits this month and was key in pushing Action America's traffic to a record that will probably exceed 400,000 hits for the month - currently 386,000 plus.)
What is hr 134 .... is that the current bill number of Tauzin's sales tax bill?
A-A, that's a terrific article, thanks for posting the link. It certainly makes the case for reforming the system before we have a MAJOR financial crisis because of wealth fleeing our nation. As you said, by the time the situation becomes so obvious that the average American can recognize it, it may very well be too late.
There is another crisis that isn't obvious to the average American, even if its symptoms are all around us. Between 1976 and 2001, the tax system (including the Code itself, Treasury Dept rulings, and IRS regs grew from app. 23,000 pps. to roughly 46,000 pps. That means it doubled in 25 years. Since 2001, it has grown to 60,000 pps (app.). That means it is now doubling every 8 years. All of those statistics are from Commerce Clearing House.
As bad as today's system is, can you imagine what it will be like by 2010, if it exceeds 100,000 pages by then? I don't think we will ever see a 100,000 page system - I think the whole masive thing will come crashing down well before then. As with the problem you point out, by the time the situation becomes obvious to the average American, it may very well be too late to avoid a major financial disaster.
That is why, when people say that trying to get Fundamental Tax Reform passed is futile, will never happen, I strongly disagree. Make no mistake - we WILL have FTR. The only question is whether it will happen before or after the current system implodes of its own massive weight. Of course, the problem you point to with respect to the wealthy fleeing the country could precipitate it even sooner.
Damned Paleos...
We're trying to fix your biggest concern: job loss and free trade.
That's not the cause if our problems: taxes are!
It is estimated that 20-25% of the price of american-made goods is passed on taxes. follow me on this one:
A $100 item is exported. $25 of that $100 is passed on taxes. Whe this item is bought overseas, whatever foreigner buys this item is essentially paying a 25% tax-inclusive tax rate.
Now, if we took that $25 out, that items now only costs $75. If that good more likely to be purchased? Hell Yes!
Under the current system, if you manufactured an item in Canada, a country with similar labor costs as our own, you could re-import that item back in the US and sell it for cheaper than if it were built here in the first place!
Why? because we trade on an uneven playing field, where our own rules are slanted against us!
The NRST would make all exports free of any imbedded taxes. However, every import sold in the US at the retail level would be subject to the NRST.
The problem is so simple it's ridiculous.
I really don't like your tagline. Sure, the president spends too much, but how can you say that he spends more than Nixon, or taxes more than his father???
Thanks geezer, Taxman, Principled and everyone for calling attention to this. The amount of ink is increasing day by day.
The IRS still gets you when you leave...they closed most of
that loophole in 1996...
http://www.bankrate.com/brm/itax/news/20040402a1.asp
The IRS still gets you when you leave...they closed most of that loophole in 1996...
A part of the article that I referred to discusses just the laws that you mentioned. The problem is that those laws had an effect that was the exact opposite of what Congress intended. I know, for a fact, about one consulate of a favored tax-haven country, that although they always kept a lot of applications for citizenship on hand, ran out of those applications within weeks after HIPAA was signed into law. I personally know expatriates who have told me that HIPAA was the deciding factor, that pushed them over the edge, to expatriation.
When I asked an expat associate of mine, who left in 1997, if he wasn't worried about never being able to return to the US, because of changes to the INA, he told me (as exact as I can remember) "Why would I ever want to go back to a country that treated me like the lowest form of dirt, just because I had the audacity to make a few million dollars, without their permission?" In fact, I find that this particular gentleman is even more upset about the situation than most other expats who I have encountered, since after retiring from a career of serving the United States, as a highly decorated US Marine officer, such treatment by the government that he served, makes him feel far more betrayed than you or I ever could ever feel. In fact, every time the subject comes up, he goes to some length to make it very clear, just how betrayed he feels. All of the expats who I have ever met in my travels, have expressed how betrayed they feel, by the US government. But, I can certainly understand how much worse that betrayal must be, for someone who spent most of his life serving that very government. When I asked him if it wasn't hard to leave the US after serving it for so long, he told me that by the time he finally made the decision to leave, he had come to the realization that the country and the Constitution that he fought for, no longer existed. The country that he was leaving was not the same country that he fought for, since most of that Constitution had already been dismantled and he felt that there was ample reason to believe that it would get much worse. Turns out that he was right.
The IRS has long been aware of the loss of hi-dollar individuals and it is for that reason that the offending amendment was placed in the HIPAA legislation. It was supposedly designed to force the wealthy to stay, by creating an excessively expensive punishment for the wealthy, who have the audacity to leave. Instead, the wealthy saw that legislation as exactly what it was - one more brick in the economic Berlin Wall, being built by Congress - and many who had been sitting on the fence immediately jumped and many others began planning their "escape" (the popular term, used by expats to describe leaving the US) and most of them left within the next year or so.
But, where it really backfired on the IRS, was that prior to HIPAA, when wealthy Americans chose expatriation, they most often left a significant amount of their investments in the US, which meant that the IRS still got their pound of flesh. Now, as a result of HIPAA, most wealthy expats, to avoid the possibility of having those assets confiscated by the IRS, to pay that 10 years of "escape tax", are taking ALL of their assets with them. There are many ways to do that. For example, they can book lots of foreign debt, owed to them, while creating significant debt on what they have here. The end result is that instead of leaving much of their assets in the US where that income can be taxed, they are now taking all of their wealth with them, when they leave. So, HIPAA had exactly opposite the desired effect.
History shows that in every country where the government tried to close the borders to wealth, from Nazi Germany, to Apartheid South Africa, to the collapse in Malaysia, a few years ago, the more wealth manages to get out. You can't force wealth to stay in any country, but you can force them to leave. If you want the wealthy to stay, you have to entice them to stay. Disincentives just don't work with people who have the wherewithal to leave. In fact, the more of a threat they see the government becoming, the more likely they are to leave and the IRS is increasingly being seen as a threat. That 's why we need to move to a National Retail Sales Tax soon.
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