Posted on 08/02/2004 11:16:09 PM PDT by JohnHuang2
WASHINGTON – Is it real or is it an election year scheme to win votes?
That's the question many in this town are asking about House Speaker Dennis Hastert's proposal to eliminate the income tax and abolish the Internal Revenue Service in a second Bush administration.
In his upcoming book, "Speaker: Lessons from Forty Years in Coaching and Politics," Hastert says the bold move – sure to be immensely popular with voters – will be the centerpiece of President Bush's domestic agenda in a second term.
Hastert, for his part, says he will push for replacing the nation's current tax system with a national sales tax or a value added tax.
"People ask me if I'm really calling for the elimination of the IRS, and I say I think that's a great thing to do for future generations of Americans," he writes in "Speaker," set for release tomorrow.
House Majority Leader Tom DeLay, R-Texas, offered a preview of the House GOP leadership's post-election tax agenda in a March speech in which he said the Republicans are determined to repeal the federal income tax.
Long an advocate of a national sales tax, a confident DeLay told a conference of tax lobbyists that House Republicans will have hearings and push the issue in 2005 and 2006.
He said that replacing the income tax, payroll and other related federal taxes would provide more money for people to use, and he endorsed a proposal from Rep. John Linder, R-Ga., for a national sales tax.
Yet, even as Republican leaders in the GOP-led House, Senate and Bush White House have praised the concept of tax simplification over the last 3 1/2 years, the U.S. tax code has been expanded by over 10,000 pages as the Bush tax cuts and other changes – part of a total of 227 changes to the code – were implemented.
"Pushing reform legislation will be difficult," admits Hastert. "Change of any sort seldom comes easy. But these changes are critical to our economic vitality and our economic security abroad."
Americans for Fair Taxation has been pushing the plan for years. Recently, the group has been pushing H.R. 25 as the vehicle.
"The current federal income tax system is broken. Patching up the existing code is pointless. It's time for a fresh approach, a fair approach. It's time for the FairTax," says the group's website. "From its humble beginnings, the income tax has grown like a cancer by taxing our hard work and discouraging savings and investment."
H.R. 25 would eliminate the federal income tax and replace it with a 23 percent consumption tax paid by the end user. That means business-to-business purchases for the production of goods and services would not be taxed. The organization estimates consumer prices will drop by an estimated 20-30 percent as a result of the change.
The group's website describes how the bill's rebate function works. It assures that those living in poverty would not pay any tax.
"Under the FairTax, no American will pay taxes on necessities. The rebate will be equivalent to the tax paid on essential goods and services. The rebate will be mailed before the tax is actually paid [and] will be paid in equal installments at the beginning of the month. The size of the monthly rebate will be determined by the federal poverty level for a particular household size."
The bill's Senate version is S.1493, sponsored by Sen. Saxby Chambliss, R-Ga., was introduced last year.
"If you own property, stock, or, say, one hundred acres of farmland and tax time is approaching, you don't want to make a mistake, so you're almost obliged to go to a certified public accountant, tax preparer, or tax attorney to help you file a correct return. That costs a lot of money," writes Hastert. "Now multiply the amount you have to pay by the total number of people who are in the same boat. You can't. No one can because precise numbers don't exist. But we can stipulate that we're talking about a huge amount. Now consider that a flat tax, national sales tax, or VAT would not only eliminate the need to do this, it could also eliminate the Internal Revenue Service (IRS) itself and make the process of paying taxes much easier."
Would a campaign promise to eliminate the IRS be taken seriously? If the Bush administration were really planning such a dramatic move in a second term, why would campaign officials not be making more of it? Could Bush really deliver on a promise so bold?
These were some of the questions being asked around the Capitol today. Nevertheless, the leak from Hastert is sure to sell books.
"By adopting a VAT, sales tax, or some other alternative, we could begin to change productivity," Hastert continued. "If you can do that, you can change gross national product and start growing the economy. You could double the economy over the next fifteen years. All of a sudden, the problem of what future generations owe in Social Security and Medicare won't be so daunting anymore. The answer is to grow the economy, and the key to doing that is making sure we have a tax system that attracts capital and builds incentives to keep it here instead of forcing it out to other nations."
"This should satisfy any of the lefty pansies"
Nothing satisfies a lefty pansy. That's part of their disorder.
But I wouldn't even give them that much. States tax necessities like booze and cigarettes now; no reason to exempt anything. Once you start exempting anything, whoosh: next thing you know, the tax code is back up to a million pages.
Just keep the rate at 5%. If somebody's too poor to pay that, let private charities help them. Charitable contributions would go through the roof if they abolished the Infernal Reaming Slimepit and instituted a 5% national sales tax.
"The other part of that equation is that used products would not be taxed (again)."
With a national sales tax, they would be if sold in a second-hand store.
While it would be fair, it would be almost as intrussive as the current system. The government has no business poking it's nose into my financial affairs.
Hastert's remarks are nothing but an indication that the lemmings in Washington are starting to realize belatedly that they have spent our country into oblivion and additional taxation has to be imposed.
As he said, the best way to increase tax revenues is to grow the economy so people spend more, and with the NRST it makes U.S. exports more competitive. In a few years it could neutralize the trade deficit and cause a much stronger dollar.
You either don't know much about the whole fair/flat tax idea and the proposals that have been made, or you are just a typical liberal who believes that he somehow has a "right" to other people's property, simply because they have more than he does. All of the flat or fair tax proposals make provisions for the poor - basically, that they pay no taxes on necessities, just as they now pay no taxes at all, and in many cases, actually get PAID by the government.
I am soooo tired of the patronizing and moronic argument that "the rich won't spend their money" in the "right" way (according to the liberals who believe that only they know how to spend everyone else's money). Its the same nonsense we heard about the last round of tax cuts, that the "rich" wouldn't spend the tax refund, or wouldn't spend it on the "right" things. As someone else here said, it doesn't matter if the "rich" spend it on frivilous luxury items, on groceries, on stocks, or simply put it into a savings account. What matters is that the money is in the private sector, where it generates economic activity.
Perhaps you've heard the story about the liberals increasing the taxes on things that only the "rich" buy, like yachts. The idea was to punitively tax the "rich" because they were (gasp!) spending their own money on things that the liberals thought were excessive or frivilous. The result? Those "rich" b*stards stopped buying new yachts. Who suffered? The "poor" and "middle class" people whose jobs were in the yacht construction, sales, and maintenance industries.
Get a clue, it isn't about rich, poor, and middle class, it's about keeping money in the private sector, it's about allowing capitalism to do what it does best: create efficient economic systems based on incentives and effort, not victimhood and government handouts.
Personally, I think thats a bad idea.
Double taxation is a bad idea, always.
Hopefully, you're not referring to the FairTax.
Because the NRST would be about as nonintrusive as you can get.
There would be *O* reporting by individuals.
Please add me to the ping list
"Double taxation is a bad idea, always."
Yeah, it's offensive, but nothing devised by man is perfect, and that might be a small drawback compared to what we have now.
The minute you start trying to exempt used goods, people are going to start all kinds of dodges to call new merchandise used, or just to gundeck the paperwork.
Better a clear, unequivocal principle: 5% on retail sales. Period.
5% would make this a nonstarter in Congress.
The plan has to be revenue neutral.
Pass it, then we can begin the debate about the rate...that is a debate about spending, not the way you collect taxes.
And when that debate begins, for the first time the American people will be united in one interest.
Yeah, let's go for a national sales tax... and when a RAT like Kerry gets in, we can be assured that we'll end up with BOTH an income tax and a sales tax.
Being in Virginia, I deal with both. It's not fun.
Until the 16th Amendment is gone, then the flat tax remains the only viable option.
The FairTax begins the process.
Read the Plan.
"Until the 16th Amendment is gone, then the flat tax remains the only viable option."
Oh, yes. **Definitely** make the income tax go away before agreeing to a sales tax.
The flat income tax is dead.
It lost the debate several years ago.
Catch up.
Do you wonder why Hastert doesn't even mention it?
"Pass it, then we can begin the debate about the rate...that is a debate about spending, not the way you collect taxes."
Well, I could probably live with that.
Although, in the not-very-long-run a 5% sales tax would produce **more** revenues than our current system.
Remember the J curve. It's an observed phenomenon, not a theory.
I don't disagree with you.
Unfortunately I agree with the first two responders to your post.
Haster may get the House to go along with it but the Senate will never get it out of committee unless the Republicans have a plan to elect enough Senators to pass it.
What are the prospects for a filibuster-proof Senate?
The proposed (revenue neutral) rate is 30%.
I want the 16th Amednment repealed first. Once you have the Amendment repealing the 16th passed, I will support the Fair Tax, but not until.
I want to have that ratification taken care of BEFORE I so much as open the door to getting the worst of both worlds. Politicians will want to get both streams.
"The proposed (revenue neutral) rate is 30%."
Proposed by whom? Seems awfully high.
Still, if people started paying 30% at the register instead of having it withheld, it might be more obvious how much govt is taking.
Ever heard Roger Miller's song "Government" from Big River?
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