Posted on 08/14/2004 10:58:52 AM PDT by forest
Last week, Juliet Eilperin reported in the Washington Post(1) that "House Speaker J. Dennis Hastert (R-Ill.) would like to abolish the Internal Revenue Service and replace the current tax system with either a flat tax, a national sales tax or a value-added tax." As reported, Hastert suggests that a new tax system would increase productivity and "double the economy" over the next 15 years. "All of a sudden, the problem of what future generations owe in Social Security and Medicare won't seem so daunting anymore," The Post reports Hastert wrote.
"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," Hastert said.
Hastert is, of course, quite correct. We should abolish that overbearing IRS and all of the unruly tax code. Federal tax law is so complicated, no person in the IRS (or Congress) understands all of it. Yet, every citizen is expected to obey 100%. Truly, it is a corrupt system.
But, before we begin looking for any new "flat tax" proposal, perhaps we should take a quick look at a little history -- see what has already been on the table.
Back in June of 1998, the House actually passed a bill to abolish the income tax code by the year 2003. Albeit, there was one damning caveat: that Congress approves a simplified replacement tax system before then.(2)
That, of course, did not happen. Because, then Treasury Secretary Bobby Rubin -- who is a millionaire hundreds of times over -- immediately jumped on the bill, saying the bill should never became law. "If enacted, it would create enormous uncertainty which could well have a severe adverse impact on our economy, our workers, our businesses, our people. Families, for example, would not know what to pay for a house because they wouldn't know if their mortgage interest would be deductible."
Pete Stark (D-CA) did a good job of representing the whining of the tax and spend Social-Democrats: "With the Republicans in leadership having no understanding of the basic tenets of economics and leading this house in the most amateurish, asinine way, we will destroy this economy, destroy the values upon which the families are based."
Then House Minority Leader Dick Gephardt, (D-MO), said the bill "is yet another irresponsible Republican idea masquerading as a solution. They refuse to have a real debate on tax reform because they know what we know: That the average taxpayer would be worse off under the Republican plans."
That just goes to prove how far out of touch the Democrats really are with the American people. Also, they fear losing the control they wield over the American people via the tax code.
In March of 1999, then House Majority Leader Dick Armey (R-TX) announced that he was reintroducing H.R. 1040, a bill to scrap the current tax system and replace it with a flat 17 percent tax on all income.(3)
"Filling out an IRS tax form can be a frightening experience," Armey said. "The forms and instructions we must deal with are complicated and confusing. Millions would rather pay someone else to deal with their returns than face this frustration. But there's no reason that our system needs to be so complex. My flat tax proposal offers a simple, fair alternative. It allows everyone to file their returns on a simple, postcard-sized form." . . .
"The flat tax offers relief to an America that is overtaxed, and burdened by the current tax system," said Armey. "Millions would find their tax burden reduced -- or eliminated entirely -- under the flat tax. But the flat tax offers no breaks for special interests. No loopholes for powerful lobbies. Just a simple tax system that treats everyone the same."
Armey also reported that the U.S. income tax code is a monument to unnecessary waste. The income tax system is so complex, the IRS publishes 480 tax forms and another 280 forms to explain the 480 forms. The IRS sends out eight billion pages of forms and instructions each year which, if laid end to end, would circle the earth 28 times. Nearly 300,000 trees are cut down each year to produce the paper on which IRS forms and instructions are printed. The tax code does more than complicate people's lives during tax season and reduce living standards. It pollutes Washington's political culture.
As special-interest provisions have been added to the tax code, Washington's lobbying industry has flourished. Washington's lobbying industry, which is the largest private employer in the nation's capital, generates $8.4 billion in revenue each year. If the lobbying industry were its own economy, it would be larger than the economies of 57 countries. While the thousands of lobbyists in Washington have prospered in an environment of tax favoritism, the typical taxpayer has not.
And remember a bean counter named Steve Forbes with a very interesting flat tax plan? His table is still available.(4) Forbes said: "Start by scrapping the tax code. Don't fiddle with it. Junk it. Throw it out. Bury it. Replace it with a pro-growth, pro-family tax cut that lowers tax rates to 17% across the board and expands exemptions for individuals and children so that a family of four would pay no taxes on the first $36,000 of income.
Not one cent to the IRS on the first $36,000. Anything over that would be taxed at a flat, fair 17%. The flat tax would be simple. You could fill it out on a postcard. It would be honest. It would eliminate the principal source of political corruption in Washington. It would be fair. Millions of people would be off the federal income tax rolls. There would be no tax on Social Security. No tax on pensions. No tax on personal savings. It would zero out capital gains taxes. It would set off a boom by letting people keep more of what they earn and by lowering barriers to risk taking. "(5)
Let's not discount any of the above mentioned people. Dick Armey is now at FreedomWorks(6) and still fighting for lower taxes, less government, and more freedom at the grassroots level. Steve Forbes is also still available to lend a hand. Many other "flat taxers" are, too. They may all be quiet at the moment, but that could be for a very good reason.
It appears that House Speaker Dennis Hastert sent up a trial balloon in an election year for a reason. George W. Bush has also mentioned abolishing the IRS as we know it and replacing those many thousands of pages of federal tax law, rules and regulations with a flat tax. This may be the time for President Bush to formally announce that publicly.
As this article was being written, President Bush was addressing an "Ask President Bush" campaign forum in Florida. The flat tax was mentioned and President Bush called it "an interesting idea." Then, Bush came back with: "You know, I'm not exactly sure how big the national sales tax is going to have to be, but it's the kind of interesting idea that we ought to explore seriously."
Was that also a trial balloon? Sure; of sorts. Unfortunately, the media didn't pick up on it and so few Americans know of the statement. In truth, President Bush knows exactly how high any of the flat taxes would need to be. People in the White House and on Capitol Hill have been quietly running the numbers for a couple years. Now is the time for our input -- before the Social-Democrats start whining about the program.
Let's face it, President (candidate) Bush likes to play his cards close to the vest. His campaign committee knows very well that, if President Bush were to formally make such a flat tax proposal within the next few weeks, there just ain't enough Prozac available in the nation to calm down the Social-Democrats and their liberal media cheerleaders enough to be understood properly by the electorate before November.
1. <http://www.washingtonpost.com/wp-dyn/articles/A37806-2004Aug3.html>
3. <http://www.uhuh.com/reports/headsup/hu90.htm>
2. <http://www.uhuh.com/reports/headsup/hu126.htm>
4. <http://www.ctj.org/html/forbedis.htm>
5. <http://www.pbs.org/newshour/bb/congress/forbes_flat_tax.html>
6. <http://www.cse.org/armey/index.php>
By shaming spineless Republicans.
Actually .06 is six-hundreths (6%), .006 is six-thousandths (six tenths of one percent).
No. It did not change much, if anything.
(SCOTUS = Supreme Court of the United States)
FACT #10: Congress passed an Act in 1894 to impose a tax on the incomes of citizens and resident aliens of the United States. The constitutionality of the Act was challenged in 1895 and the Supreme Court said that the law was UNCONSTITUTIONAL because it was a DIRECT TAX that was not apportioned as the Constitution required. (see Pollock v. Farmer's Loan & Trust Co., 157 US 429 [1895]).
FACT #14: The U.S. Supreme Court said in 1916 that the 16th Amendment did NOT change the U.S. Constitution because of the FACT that Article 1, Section 2, Clause 3, and Article 1, Section 9, Clause 4, were NOT REPEALED OR ALTERED; the U.S. Constitution cannot conflict with itself. The Court also said that the 16th Amendment merely prevented the "income duty" from being taken out of the category of INDIRECT taxation. (see Brushaber v. Union Pacific R.R. Co., 240 US [1916])
FACT #16: In another Supreme Court decision in 1916, the Court, in clear language settled the application of the 16th Amendment; " . . . by the previous ruling [Brushaber] it was settled that the provisions of the Sixteenth Amendment conferred NO NEW POWER OF TAXATION but simply prohibited the complete and plenary [full] power of income taxation possessed by Congress from the beginning from being taken out of the category of indirect taxation to which it inherently belonged . . . " (see Stanton v. Baltic Mining Co. , 240 US 112 [1916]).
FACT #25: Karl Marx wrote in his COMMUNIST MANIFESTO, ten planks needed to create a COMMUNIST state. The SECOND PLANK is: A HEAVY OR PROGRESSIVE INCOME TAX, second only to the ABOLITION OF PRIVATE PROPERTY.
[The above Facts were taken from
"Believe It or Not", owned and copyrighted by Save-a-Patriot Fellowship.]
But, under the NRST, everyone is contributing. Sure, those who live under the HHS poverty line get rebates each month, but I have no problem with that. It removes a barrier to upward mobility in the economy, IMO.
Like I said, I'm open to the flat tax as well, though the FT seems to be just a simplification of the current tax structure, rather than eliminating it outright. You still have to report income, you still have to submit forms to the IRS. This is just my impression, but enforcing the flat tax would take more resources and budgeting than enforcing the NRST would, which balances out the amount of money the government would take in with either tax. With the flat tax, they've got less overall to spend because of having to budget for the IRS, but they're also taxing everyone's income, so they're also raising more money. Meanwhile, with the NRST, the government is taking less money in, with no IRS needed to enforce the NRST, and giving rebates to those under the poverty line. I think this is just a matter of where you prefer your taxation.
There are definitely problems with both, but there is no comparison with those problems and the ones we have now. The one thing I do not like about NRST is that it penalizes productivity. That is, the tax is a disincentive when you go to buy things. It is a penalty, whereas an income tax - if assessed at one percentage - is psychologically and emotionally neutral. I do not want anything that will penalize our economy.
The one thing I do not like about NRST is that it penalizes productivity.
Hmmm,
Thomas Hobbes, Leviathan; 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.
"If direct taxes upon the wages of labour have not always occasioned a proportionable rise in those wages, it is because they have generally occasioned a considerable fall in the demand for labour. The declension of industry, the decrease of employment for the poor, the diminuation of the annual produce of the land and labour of the country, have generally been the effect of such taxes....
Absurd and destructive as such taxes are, however, they take place in many countries."
- Adam Smith, The Wealth of Nations
Yes, I corrected myself in post #72.
"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."
This is only an opinion based on the author's personal biases - no problem there. It sounds fine if you are only looking at it from the "consumption" side. How can you consume something if someone has not produced it??? In any case, government is going to penalize someone. I just prefer it be on income since we all enjoy the benefits of living in the USA. And government should not try to influence social behavior by taxing/not taxing it. For example, I live in WA (sales tax state). So if I want to buy a few-hundred-dollar item, I wait to buy it when I visit a relative in OR (no sales tax). Why should I have to do that?
"If direct taxes upon the wages of labour have not always occasioned a proportionable rise in those wages, it is because they have generally occasioned a considerable fall in the demand for labour. The declension of industry, the decrease of employment for the poor, the diminuation of the annual produce of the land and labour of the country, have generally been the effect of such taxes....
Absurd and destructive as such taxes are, however, they take place in many countries."
Obviously some truth here, but only in a perfect world would there be no taxation...period. Not much chance of that happening, of course.
How would a sales tax be keeping the IRS, as that would be collected at time of sale, then deposited to US Govt.
The flat tax would also be collected similar, not income tax forms and deductions...since one must pay period. NO Income Tax forms to file, no IRS. It would just be a minimum staff for Government Treasury Department.
Abolish the IRS
Or lose my vote.
Put up or shut up.
you gopers listening?
I agree with this concept as it gives an equal playing field for both companies, and let chips fall where they may.
As for our 17%, can't they just deduct it same way as we do Federal Income Tax and let Treasury Department handle those funds now??? I realize it hasn't happened yet, but wanting to think positive.
As I have said more times than I can count: Any income tax is fundamentally flawed from its inception.
To revive one of my old taglines: An income tax is like a cowpie...flatten it and it's still a cowpie.
The NRST is the only tax system that meets every need of liberty, economy and privacy for us now and our posterity down the road.
That's why I suppport the FairTax.
Obviously some truth here, but only in a perfect world would there be no taxation...period. Not much chance of that happening, of course.
No ones suggesting no taxation, just replace the income/payroll tax system with a better way.
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 retail sales 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.Refer for additional information: http://www.fairtax.org & http://www.salestax.org
[Montesquieu wrote in Spirit of the Laws, XIII,c.14:]
- "A capitation is more natural to slavery; a duty on merchandise is more natural to liberty, by reason it has not so direct a relation to the person."
--Thomas Jefferson: copied into his Commonplace Book.
Patrick Henry, Virginia Ratifying Convention June 12, 1788:
- "the oppression arising from taxation, is not from the amount but, from the mode -- a thorough acquaintance with the condition of the people, is necessary to a just distribution of taxes. The whole wisdom of the science of Government, with respect to taxation, consists in selecting the mode of collection which will best accommodate to the convenience of the people."
- "A nation cannot long exist without revenues. Destitute of this essential support, it must resign its independence, and sink into the degraded condition of a province. This is an extremity to which no government will of choice accede. Revenue, therefore, must be had at all events. In this country, if the principal part be not drawn from commerce, it must fall with oppressive weight upon land."
- "The ability of a country to pay taxes must always be proportioned, in a great degree, to the quantity of money in circulation, and to the celerity with which it circulates. Commerce, contributing to both these objects, must of necessity render the payment of taxes easier, and facilitate the requisite supplies to the treasury."
"Imposts, excises, and, in general, all duties upon articles of consumption, may be compared to a fluid, which will, in time, find its level with the means of paying them. The amount to be contributed by each citizen will in a degree be at his own option, and can be regulated by an attention to his resources. The rich may be extravagant, the poor can be frugal; and private oppression may always be avoided by a judicious selection of objects proper for such impositions. "
"It is a signal advantage of taxes on articles of consumption that they contain in their own nature a security against excess.
They prescribe their own limit, which cannot be exceeded without defeating the end proposed - that is, an extension of the revenue."
The Records of the Federal Convention of 1787
(Farrand's Records)
James Mchenry before the Maryland House of Delegates.
Maryland Novr. 29th 1787--
Appendix A, CXLVIa, page 149, S9."Convention have also provided against any direct or Capitation Tax but according to an equal proportion among the respective States: This was thought a necessary precaution though it was the idea of every one that government would seldom have recourse to direct Taxation, and that the objects of Commerce would be more than Sufficient to answer the common exigencies of State and should further supplies be necessary, the power of Congress would not be exercised while the respective States would raise those supplies in any other manner more suitable to their own inclinations --"
We get this type of rhetoric in Presidential election years. It was floated the last two previous presidential elections.
We've heard all the arguments why it will never happen and why it should happen.
Bcause it is too sweeping it will always be branded as radical extremist in its reach. It will then be put back on the shelf of 'interesting ideas'.
What is to prevent these ideas from being tried as optional in certain enterprise zones? If the ideas really work, the benefits should be evident. Good ideas that are practically implemented work well in America.
Impressive docs.
Am I reading this right? Is the court overturning Hylton with this statement? It seems to fly right in its face.
Is the court overturning Hylton with this statement? It seems to fly right in its face.
Hylton held:
Hylton v. United States(1796), 3 U.S. 171
"A general power is given to Congress, to lay and collect taxes, of every kind or nature, without any restraint, except only on exports; but two rules are prescribed for their government, namely, uniformity and apportionment: Three kinds of taxes, to wit, duties, imposts, and excises by the first rule, and capitation, or other direct taxes, by the second rule. " "the present Constitution was particularly intended to affect individuals, and not states, except in particular cases specified: And this is the leading distinction between the articles of Confederation and the present Constitution." "Uniformity is an instant operation on individuals, without the intervention of assessments, or any regard to states," "[T]he DIRECT TAXES contemplated by the Constitution, are only two, to wit, A CAPITATION OR POLL TAX, simply, without regard to property, profession, or any other circumstance; and a tax on LAND."
Pollock maintained that rents & returns from stocks & bonds (personal property), Taxes on the fruits of ownership of property were to be treated as direct taxes on the source.
Stocks and bonds are one form of personal property, but not the only form. The second conclusion from Pollock refers to "personal property", without qualification. Certainly carriages should fall under that category.
(By the way, I remind you that the last item you quoted from Hylton was explicitly not a holding from that ruling, but merely a tentative dictum)
The second conclusion from Pollock refers to "personal property", without qualification. Certainly carriages should fall under that category.
I would point out that, excises on all kinds of "personal property" as you described it continue after Pollock, and to this day.
The issue Pollock raised was in relation to taxes predicated solely on ownership.
KNOWLTON v. MOORE, 178 U.S. 41 (1900)
" It is true that in the income tax cases the theory of certain economists by which direct and indirect taxes are classified with reference to the ability to shift the same was adverted to. But this disputable theory was not the basis of the conclusion of the court. "
"The constitutional meaning of the word direct was the matter decided. Considering that the constitutional rule of apportionment had its origin in the purpose to prevent taxes on persons solely because of their general ownership of property from being levied by any other rule than that of apportionment, two things were decided by the court: First, that no sound distinction existed between a tax levied on a person solely because of his general ownership of real property, and the same tax imposed solely because of his general ownership of personal property. Secondly, that the tax on the income derived from such property, real or personal, was the legal equivalent of a direct tax on the property from which said income was derived, and hence must be apportioned."
BROMLEY v. MCCAUGHN, 280 U.S. 124,136 (1929)
Use, consumption, sale etc. of personal property is seen as taxable in regard to exercise of a particular single power over property incidental to ownership, which distinguishes the carriage in the case of Hylton.
It would also be appropriate to recognise that the Court following Pollock decision was rapidly backtracking fast on any broad interpretation of Pollock in commerce/business related taxes:
Flint v. Stone Tracy Co.(1911), 220 U.S. 107
- "The Pollock Case construed the tax there levied as direct, because it was imposed upon property simply because of its ownership."
- "In the present case the tax is not payable unless there be a carrying on or doing of business in the designated capacity, and this is made the occasion for the tax, measured by the standard prescribed. The difference between the acts is not merely nominal, but rests upon substantial differences between the mere ownership of property and the actual doing of business in a certain way."
- "As we have seen, the only limitation upon the authority conferred is uniformity in laying the tax, and uniformity does not require the equal application of the tax to all persons or corporations who may come within its operation, but is limited to geographical uniformity throughout the United States. This subject was fully discussed and set at rest in Knowlton v. Moore, 178 U.S. 41, 44 L. ed. 969, 20 Sup. Ct. Rep. 747, and we can add nothing to the discussion contained in that case."
- "It is therefore well settled by the decisions of this court that when the sovereign authority has exercised the right to tax a legitimate subject of taxation as an exercise of a franchise or privilege, it is no objection that the measure of taxation is found in the income produced in part from property which of itself considered is nontaxable.
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