Gross Minus Net Equals Zero: Repeal the Sixteenth Amendment

CalitalistMagazine.com ^ | June 20, 2004 | Michael Marriott

[Remember_Salamis]

Gross Minus Net Equals Zero: Repeal the Sixteenth Amendment by Michael Marriott (June 20, 2004)

Summary: Let us together repeal the sixteenth amendment to the Constitution by the year 2013.

When I worked in Saudi Arabia as a technical consultant in the 1990s, my coworkers and I were astounded upon receiving our first paycheck: we actually were paid the full amount we had earned. Gross pay minus net pay equaled zero. Never before or since in my lifetime has such a thing happened. Since every working person in the United States deserves such a delightful, fulfilling experience I would like to submit the following proposition.

Let us together repeal the sixteenth amendment to the Constitution by the year 2013. This infamous income tax amendment was passed in 1909 by "progressive" Republicans as the best method to collect government revenue, ensure "fairness" and get around the pesky Supreme Court. The latter had the gall to rule in the late 19th century that such levies on income were unconstitutional. Undaunted, the politicians of the era decided that an income tax amendment was necessary. It required four years for the states to ratify the amendment, which became part of the Constitution in 1913.

Hence 2013 presents a nice target date for the amendment's repeal (rather then a year of mournful reminders, 2013 could become a jubilee year that strikes a majestic blow in favor of individual rights). Further, we all can participate in the nine year debate to determine if our country is to be truly free. Repeal of the 16th amendment would be a real and symbolic reaffirmation that our government is truly limited; no other single act we could possibly perform would so effectively reinforce the idea that America is a country dedicated to individual happiness.

Consider some of the travesties the 16th amendment has spawned in the last one hundred years. The power to tax has become the ultimate politician plaything. The so-called "progressive" nature of the tax code allows permutations uncountable as politicos raise, then lower, individual tax rates. The tax code can tailored to benefit specific special interest groups to garner bloc votes. As seventy five percent of government revenue is made possible by this insidious amendment, great sums become available to wage war, pay premium prices for toilet seats and allow certain folks to sit and do nothing for a living.

Upon approval of the 16th amendment, a new agency was sired to "help" reticent citizens "volunteer" personal, private income data, the Internal Revenue Service. And such a "service" it provides! If the IRS suspects tax cheating it can: garnish wages, freeze bank accounts, seize assets and in general make life hell for its "customers". Over the amendment's existence, citizens of the United States have been harassed, hounded, and in some cases, driven to suicide for failing to pay their "fair" share to the government. Never mind due process, innocent until proven guilty or other such tripe. The 16th amendment horribly contradicts other parts of the Constitution, such as depriving citizens of property without a trial. These things make one yearn for the good old days of taxation without representation under Great Britain.

The diminution of individual rights is sordid enough but by no means the only effect of the 16th amendment. The income tax has served to raise costs on the very people made poorer by paying the taxes in the first place. The government is able to finance great agencies that cause prices to increase artificially: milk subsidies raise the price of dairy products as do a whole host of similar subsidies in other industries; medical care costs have spiraled since the inception of Medicare and Medicaid; housing costs have ballooned astronomically, in part due to government support of unions, underwriting of loans and special tax write-offs for mortgage interest. I could mention OSHA, EPA, minimum wage and a thousand other regulations but you get the point. The tax system often makes us pay twice.

Lest we overlook another point regarding taxpayers: they pay taxes so that others can have material things that the taxpayer himself may not be able to afford. Housing instantly springs to mind. Poor folks (i.e., unproductive folks) move into government subsidized housing while the hapless taxpayer struggles to save for a down payment, a process made more difficult by the act of paying taxes. Many persons work but have no health care coverage. Not so with those refusing to work at all. Still other taxpayers struggle to capitalize a business while their fellow citizens stop at the Small Business Administration for government financing of their start-up costs. Poor mom and pop farmers feed at the government trough to save their acres of land while a struggling taxpayer in the big city lives on a sliver of land called an apartment.

At the philosophic level there is something morally repugnant in forcing people who get off their butt and work for a living to pay for that privilege. Life can be trying to say the least but when one works, prospers and finally succeeds it is a travesty to levy a tax on that person's "good fortune". No working person should have to look over their shoulder to see where the taxman is hiding. The income tax system makes citizens angry at their government, and distrustful to boot. It makes enemies of people who vie to place tax burdens on their fellow countrymen. It divides the nation into permanent classes of the "haves" versus the "have-nots", divisions that accentuate envy and ill will among the populace.

Finally I note that taxing income is hardly fair as it fails miserably as a barometer of who should pay what. With great envy (see above paragraph) I calculate that for the year 2003 I paid a higher income tax rate than ketchup nabob Theresa "Heinz Inheritance" Kerry (me, 20% average rate on income of 200k, Ms. Kerry, 11.5%, on income of 5.1M). Her fabulous wealth immune from government pillage, she smugly endorses taxation on others so that all below her can be equally poor. I marvel continuously that such a system would ever employ the term "fair" as an adjective.

Of course the income tax system is not fair, has never been fair, and indeed can never be fair. As the Ms. Kerry example demonstrates, our tax system is based on the faulty premise that a person's income can be arbitrarily classified to produce a tax that affects all taxpayers equitably. A person making $200,000 in San Francisco may be worse off financially than a rustic living in Idaho on an income of $30,000. Net worth is the true measure of wealth, not income.

The solution to these systemic injustices is not to tweak the tax code so that Ms. Kerry pays more. The solution is to scrap the entire system. Anything that has had one hundred years to prove itself and fails to do so is, well, a failure. Dismally so. The efforts of our great people must be directed toward invention, business and improving life rather than filling tax forms, hiring accountants and fighting the government. Work must always be rewarded. So let us begin the fight against freedom's enemies by finally making gross -minus net-pay equal to zero.

[Remember_Salamis]

bump

[CSM]

Tax reform ping.

[Remember_Salamis]

Let's euthenize the 16th Amendment at age 100.

[CSM]

Would you mind if I took it "hunting" at 91? (Sounds of shells being loaded)

[Remember_Salamis]

I don't have a problem with that, but the author makes a good point regarding how long it takes to pass an amendment.

[Defiant]

The 16th Amendment was passed because people in the early 20th century believed it was necessary under the Constitution before you could force people to reveal their income, and there was concern about whether it was included in the enumerated powers. After the 1930s and FDR, there was no more need for concern. You could eliminate the 16th amendment, and a simple law by Congress could reinstate the income tax. If you want to kill the income tax, you need an amendment prohibiting income tax.

[NJ_gent]

"If you want to kill the income tax, you need an amendment prohibiting income tax."

Can you imagine being in Congress and trying to get the "Kill the Income Tax" amendment to the floor? Probably half the commercials on TV from that point to the death of the amendment would be apocalyptic accounts from 'experts' and government officials about how the world would come to an end if the income tax were stopped. They'd have police on there saying they'd lose their jobs, they'd have generals on there saying we'll be overrun by invaders, and little kids on there saying they're frightened by the prospect of not being able to mooch off uncle Sam for the next 20 years. They'd portray anyone supporting the amendment as a lazy, selfish, freeloading anti-patriot.

Isn't irony great?

[Remember_Salamis]

And that's what legislation accompanying HR 25, aka the FairTax Act, calls for. But if we were to simply repeal thhe 16th, the Feds would have to institute an income tax apportioned amond the states. Even an apportioned income tax would be better than the current system (Cali has 12% of the pop., so they need to provide 12% of the tax bill).

[ancient_geezer]

If you want to kill the income tax, you need an amendment prohibiting income tax.

It takes three steps to get there, repeal of the income tax statutes by simple majority of House and Senate, replacing the income tax with a working tax system to take its place.

John Linder in the House & Saxby Chambliss Senate, offers a comprehensive bill to kill all income and payroll taxes outright, and provide a replacement in the form of a pure consumption tax:

H.R.25, S.1493
Sponsor: Rep Linder, John [GA-7] (introduced 1/7/2003)      Cosponsors (52)
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 for additional information: http://www.fairtax.org & http://www.salestax.org

 

Laying viable conditions for approval of the required joint resolution proposing the amendment by 2/3rds of both Senate and the House in a form such as Sam Johnson's amendment to the constitution:

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.

for the final step of ratification by 3/4s of the states.

[ancient_geezer]

A Taxreform bump for you all.

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

[ancient_geezer]

But if we were to simply repeal the 16th, the Feds would have to institute an income tax apportioned amond the states.

Wish that were true, unfortunately the state of affairs would simply fall back to the status left by the Pollock decisions. The Congress would only have to remove the tax on rents, and returns from investments. Wages, salaries, profits etc would still be open to be taxed, that is why there must be not only repeal of the 16th but an explicit prohibition of taxation of incomes.

 

POLLOCK v. FARMERS' LOAN & TRUST CO., 158 U.S. 601 (1895):

• "We have considered the act only in respect of the tax on income derived from real estate, and from invested personal property, and have not commented on so much of it as bears on gains or profits from business, privileges, or employments, in view of the instances in which taxation on business, privileges, or employments has assumed the guise of an excise tax and been sustained as such."

• "If that[rents from land] be stricken out, and also the income from all invested personal property, bonds, stocks, investments of all kinds, it is obvious that by a r the largest part of the anticipated revenue would be eliminated, and this would leave the burden of the tax to be borne by professions, trades, employments, or vocations; and in that way what was intended as a tax on capital would remain, in substance, a tax on occupations and labor. We cannot believe that such was the intention of congress."

• "We do not mean to say that an act laying by apportionment a direct tax on all real estate and personal property, or the income thereof, might not also lay excise taxes on business, privileges, employments, and vocations. "

• Our conclusions may therefore be summed up as follows:

  First. We adhere to the opinion already announced,-that, taxes on real estate being indisputably direct taxes, taxes on the rents or income of real estate are equally direct taxes.

  Second. We are of opinion that taxes on personal property, or on the income of personal property, are likewise direct taxes.

  Third. The tax imposed by sections 27 to 37, inclusive, of the act of 1894, so far as it falls on the income of real estate, and of personal property, being a direct tax, within the meaning of the constitution, and therefore unconstitutional and void, because not apportioned according to representation, all those sections, constituting one entire scheme of taxation, are necessarily invalid.

• Mr. Justice WHITE, dissenting.

  16. The injustice of the conclusion points to the error of adopting it. It takes invested wealth, and reads it into the constitution as a favored and protected class of property, which cannot be taxed without apportionment, while it leaves the occupation of the minister, the doctor, the professor, the lawyer, the inventor, the author, the merchant, the mechanic, and all other forms of industry upon which the prosperity of a people must depend, subject to taxation without that condition.

[Defiant]

I prefer a flat tax (of no more than 17 percent) to a national sales tax, but the debate is academic. There is almost no chance of anybody pursuing either reform, even if Bush is reelected. We need to identify a Reagan Republican and start looking to 2008 and beyond for such dreams.

If Reagan had a 3rd term, he might have gotten a flat tax through (Kemp was pushing it), but instead we got "kinder, gentler" Bush 41, who raised taxes instead.

[af_vet_rr]

Can you imagine being in Congress and trying to get the "Kill the Income Tax" amendment to the floor? Probably half the commercials on TV from that point to the death of the amendment would be apocalyptic accounts from 'experts' and government officials about how the world would come to an end if the income tax were stopped. They'd have police on there saying they'd lose their jobs, they'd have generals on there saying we'll be overrun by invaders, and little kids on there saying they're frightened by the prospect of not being able to mooch off uncle Sam for the next 20 years. They'd portray anyone supporting the amendment as a lazy, selfish, freeloading anti-patriot.

Isn't irony great?

It gets even better - all of that lobbying and advertising and expenses of those saying "you can't repeal it, it would be bad" would probably be paid for by Congress, i.e. by we, the taxpayers.

This is great to talk about, but look who we have in Congress. It won't happen. Democrats would be against it (like you say, they could portray us as anti-American, etc.). Quite a few Republicans would be against it as well.

It is nice to dream about though.

[Centurion2000]

BUMP

[frgoff]

Unrealistic. The best and easiest way to get all payroll and income taxes repealed is to simply stop witholding. Just give everyone their gross pay and then bill them for taxes owed either each month or at the end of the year.

You could do that with legislatlion or perhaps even an executive order.

The end result would be the same: Howls of outrage as people actually had to pay their taxes out of pocket.

[tm22721]

Inflation is a flat tax and since 1995 the Fed printing presses have been debasing the dollar at a stupefying rate.

We need to sunset the Fed first.

BUMP

[Hank Rearden]

There is almost no chance of anybody pursuing either reform, even if Bush is reelected.

That's for sure. Bush loves spending money, and hasn't vetoed a dime of increased government waste. The last thing he'd do is to inhibit Big Stupid Government's schemes to steal more money.

[inquest]

The Congress would only have to remove the tax on rents, and returns from investments.

Then why was there such a big push for the 16th amendment in the first place, if Congress was already free to levy taxes on most types of income? Usually an amendment is a result of a controversy involving high stakes.

[ancient_geezer]

I prefer a flat tax (of no more than 17 percent) to a national sales tax, but the debate is academic.

And do nothing about paying SS/Mediscare taxes?

Here's how tax rates come out for the Armey/Shelby Flat Tax, a flat individual/corporate income tax, leaving all SS/Medicare, Federal Unemployment, excise taxes and tariffs in place and unchanged.

http://www.library.unt.edu/govinfo/subject/vital.html

• "The chart below shows a hypothetical set of flat tax rates and allowances that would result in revenue neutrality. This model, produced by the Congressional Budget Office shows that all federal income tax revenues could be fully replaced by a system with a flat tax rate of 13.1 percent and no deductions. Allowing total deductions for a family of four to reach $36,800 (more than double the amount allowed in 1995) would require a 19.9 percent rate."

Joint Economic Committee

Revenue Neutral Tax Rates for Alternative Allowances and Exemptions Under a Flat Tax

Standard Allowances	Option 1	Option 2	Option 3	Option 4	Option 5
Single	$13,100	$13,100	$ 6,550	$ 6,550	$0
Joint	$26,200	$26,200	$13,100	$13,100	$0
Head of Household	$17,200	$17,200	$ 8,600	$ 8,600	$0
Dependent Exemption	$ 5,300	$ 2,650	$ 5,300	$ 2,650	$0
Revenue Neutral Tax Rate	19.9%	19.4%	16.8%	16.3%	13.1%

Source: Congressional Budget Office, 1995.

---

Under the Armey "flat" tax, as proposed n,(HR1040 introduced 3/15/2001) a single person would pay:

7.65% ---- 7.65%(SS/Medicare) tax on wages/salary income below $13,600,

26.65% --- 19% + 7.65%(SS/Medicare) tax on wages/salary and other taxable income from $13,600-$85,000

20.45% --- 19% + 1.45% Medicare tax on wages/salaries and other taxable income from $85,001 up.

0% -------- on savings & bond income and stock dividends.

And that single person's business/employer pays,

19% ------ on earnings (Gross Receipts less allowed business deductions, exemptions and credits)

13.65% ---- 7.65% on SS/Medicare employment excises + 6% federally mandated unemployement excises levied on each employee's on wages up to $85,000.

7.45% ----- 1.45% on Medicare employment excises + 6% federally mandated unemployement excises levied on each employee's wages greater than $85,000.

Plus additional selective excises and tariffs dependant upon the nature of business engaged in.

Note: The base "Flat Tax Rate" is subject to meet revenue neutrality requirements under the Budget Enforcement act. The 19% rate stated in the Armey/Shelby Flat Tax proposal does not meet these requirements and would of necessity be adjusted upwards, and/or personal exemptions and business deductions be reduced to meet revenue neutrality criteria for enactment.