Posted on 12/17/2004 4:38:48 AM PST by JOHN W K
ANSWERING A FAIR TAX QUESTION
During yesterday's show a caller asked what would happen to her 401K funds if the Fair Tax bill became law. No income taxes had ever been paid on that money residing in her 401K. If, by the time she starts drawing that money out, the income tax is history, will she have to pay some sort of penalty? One month ago I would have rattled off the answer. No. No penalty. No taxes. You take the money and run. Yesterday, however, I was a bit more cautious. I've spent many hours over the past weeks studying the history of the income tax, the history of withholding, and various schemes for tax reform including, of course, the Fair Tax. I wanted my answer to be dead-on accurate, so I deferred until I could dive into the bill.
(Excerpt) Read more at boortz.com ...
The organization that spend millions of dollars pldges to only pass the bill along with a Constitutinoal Amendment:
"The FairTax involves three specific actions:
Passage of legislation that repeals the income tax, the payroll tax in its entirety, the estate tax, the gift tax, the capital gains tax, the self-employment tax and the corporate tax.
Passage of legislation that installs a single rate, national sales tax on all new goods and services at the point of final purchase for consumption and that provides for a universal rebate in an amount equal to the sales tax on essential goods and services.
Adoption of a constitutional amendment to repeal the 16th Amendment and to prohibit income taxes.
Reps. John Linder and Colin Peterson have introduced legislation (H.R. 2525) that would repeal the current tax system and enact the FairTax as a replacement."
Sorry, but that's a lie.
The fairtax does NOT have any legislative action for repealing the 16th amendment.
I don't have the link anymore. I downloaded the PDF months ago. I can send it to you though. What's your address?
From where?
And what is your interpretation of what you posted?
Go read the the links, it's all there. Goodnight.
I DON'T REMEMBER. Again, do you want it emailed to you?
That principle is the rule of abiding by the “legislative intent” of our constitution, as contemplated by those who framed it and the people who adopted it.
Ok, here's the debates now what was that legislative intent you were talking about?
The closest provision of a plan I can find that most of the founding fathers of the Constitution could, in principle, agree on was expressed in:
- To form a more precise judgment of the true merits of this question, it will be well to advert to the proportion between the objects that will require a federal provision in respect to revenue, and those which will require a State provision. We shall discover that the former are altogether unlimited, and that the latter are circumscribed within very moderate bounds. In pursuing this inquiry, we must bear in mind that we are not to confine our view to the present period, but to look forward to remote futurity. Constitutions of civil government are not to be framed upon a calculation of existing exigencies, but upon a combination of these with the probable exigencies of ages, according to the natural and tried course of human affairs. Nothing, therefore, can be more fallacious than to infer the extent of any power, proper to be lodged in the national government, from an estimate of its immediate necessities. There ought to be a CAPACITY to provide for future contingencies as they may happen; and as these are illimitable in their nature, it is impossible safely to limit that capacity.
As I remember, the last time we discussed this matter, over a year ago, we parted pretty much in agreement.
Obviously not, considering your expressed opinion here of the Fair Tax Act (HR25).
"You see, if there is no constitutional amendment to forbid Congress to impose any taxes which are calculated from income, from earned wages, from inheritances or any money lawfully realized by any person living in the United States, Congress is constitutionally authorized to, at any time it so pleases, to lay excise taxes upon certain businesses calculated from their income, and, the door is also wide opened to tack on top of your fair tax various new kinds of taxes calculated from monies realized by the American people."
As you are probably aware, there is a proposal in congress to repeal the 16th. As you are also probably aware, that proposal is going nowhere until a consensus is reached relative to what system would replace the current one. FairTax supporters would immediately start workin on that effort as soon as our bill is passed. You apparently disagree with that logic. Would you explain how you would go about convincing state and federal legislators to vote for repealing the 16th before the FairTax is even out of committee, much less has become the law of the land?
Your position seems to be steeped in respect for the Founding Fathers and the Constitution which is all very admirable, but ignores completely the political realities of the 21st century.
Your excerpt just says consumption tax. And the index to the book indicates that Chapter (pp. 140-178) is devoid of references to National Retail Sales Taxes, RST or the Fair Tax Act.NRST is mentioned on pages 140-143, 145-146, 154, 157-158, 160-161, 176-177.
"Oh, but the tax plan I keep referring to is that which was intended by those who framed and ratified our constitution."
If that was their intent, why didn't they put it in writing? How in the world do you know what the intent of the Founders was with respect to a tax system that would meet the needs of this country in the 21st century, a period that in many respects is radically different than the one in which they had experience. It seems to me that they laid down certain principles which have stood the test of time and which we would be well advised to adhere to. The FairTax certainly is more in line with our Constitutional principles than is the current system, although I would concede that that is a very low threshold, given that the current system violates so many of those principles.
The point is that, absent clear and compelling evidence about legislative intent, I think we go out on a very shaky limb when we declare our proposed approach to be consistent with that intent while alternative approaches are not. The fact that one particular type of tax system was initially implemented does not imply that that type of system is the ideal one for time immemorial and I doubt that any of the Founders would have argued otherwise.
It seems to me that if you are going to declare your proposal consistent with the legislative intent of the Constitution and any others inconsistent, it becomes incumbent on you to to provide some evidence to support that contention. Going back 200 years and pointing out similarities between your proposal and the system in place does not on its face prove that that system was incorporated into the legislative intent of the Constitution.
If we knew for certain, for example, how the Founders felt about abortion, and could infer something about their legislative intent on that issue in the Constitution, that would be powerful ammunition for one side or the other in the contemporary debate. I haven't heard either side claim, however, that they can devine a clear legislative intent some 200+ years after the fact.
As far as your criticism that the FCA constitutes a "ration", that strikes me as disengenuous. The fact of the matter is that when the research was done that ultimately produced the FairTax, it was discovered that the American people were overwhelmingly opposed to a system that was regressive, i. e. one that made it more difficult for those at the lower end of the income scale to afford basic necessities. The FCA is the simplest and fairest mechanism for accomplishing that. Even if you exempted certain items as some have suggested, if you are being intellectually honest, you would have to refer to that as a "ration". It seems that you are simply objecting to the whole notion of not taxing necessities. If you support a regressive tax, then at least be honest enough to say so.
For the lowest quintile, and income of $ 14,900, it says the 2001 total effective tax rate is 5.4%. 5.4%???? With a MINIMUM Payroll tax of 15.3%??? TOTAL BULLSH*T!!!Sorry, I should have posted a link. They are from the CBO. I really doubt they are fraudulent. (Have you ever heard of the EITC?)
Your numbers are fraudulent.
It is also interesting to note your selected chapter in that book only mentions demogrants as a way of reducing tax burdens generally for the Social Security taxes specifically, use with the Business Transfer Tax (BTT), a subtraction method VAT:The authors modeled several types of demogrants. One is a wage demogrant that would rebate money based on people's wages. This would avoid the FCA becoming yet another entitlement program.
I only find an index reference indicating discussion the method of "dynamic incidence analysis" as it might be compared to "distributional analysis". Hardly providing "dynamic analysis results", except the comparison of methods I guess is an analysis, and a result allowing the use of "some" in your phraseology. I guess it pays to look into the things like whatIf you are looking for a "dynamic analysis" that states that the labor supply will jump 30% in the first year, save your money and stick to reading the junk on FairTax.org. You can't just stick your big toe into reality, you gotta jump all the way in.
AG responds: Go read the links, it's all there. Goodnight.
AG,
I have been to the links you posted many times in the past while doing research, but when one posts such documentation, it is usually to confirm and/or support what one has stated. I simply wanted to know what the links are supposed to confirm in reference to our founding father’s original tax plan.
As you know AG, there are many Supreme Court cases in which the S.C. renders an opinion which is not in harmony with the legislative intent of our constitution as contemplated by those who framed and ratified the document. An example is Wickard v. Filburn, a despotic decision made by the SCOTUS in 1942 concerning Congress’ power to regulate commerce in which the Court gave a new meaning to the word “commerce” in order to allow part of FDR’s NEW DEAL socialism [price controls] to pass as being constitutional, when it was not.
The reasoning in Wickard, authorizing Congress to fine a farmer for growing wheat on his property was, that if many farmers planted, grew, and used wheat for their own families consumption within the various states, it would have an “effect” on commerce “among” the states, and therefore, the writers of our federal Constitution, and the various states when ratifying the Constitution, intended to have the Congress of the United States regulate the growth of wheat within the various state borders and allow federal legislation to punish a farmer with a financial penalty for growing wheat on his property without Congress‘ approval!
Sounds stupid, doesn’t it AG? If the logic of the Court was not so obviously intended to subjugate and undermine the limited power our founding fathers intended by the grant of power to regulate commerce, it would be laughable. But it is not laughable because the Court, in rendering its decision, was intentionally acting to subvert the intentions of our founding fathers and those who ratified the constitution in order to assist in the imposition of FDR’s NEW DEAL…a deal in which the servant becomes the master over those who created a servant___ a deal in which folks in government [agents of the strong and powerful] are set free to ignore the four corners of the constitution and impose their will upon the people of the United States without their consent.
The most fundamental principle of constitutional law as stated by Jefferson is:
"On every question of construction [of the Constitution], let us carry ourselves back to the time when the Constitution was adopted, recollect the spirit manifested in the debates, and instead of trying what meaning may be squeezed out of the text, or invented against it, conform to the probable one in which it was passed."--Jeffeson in a letter to William Johnson, June 12, 1823
So, the immediate question the Court was to answer in the Wickard case was, what was the intent of the framers and ratifiers in granting the power to Congress. What was it that the people wanted to accomplish when delegating the power in question to Congress?
Search the case in question [Wickard], follow the cases cited, and you will find insufficient documentation from the historical record of the framing and ratification process of our Constitution to support what the Court concluded. As a matter of fact, the historical record documents the Court did in fact engage in an outright subjugation of our constitutional system and did so by an intentional misrepresentation of the meaning of the word “commerce” as used in our constitution.
The word commerce, as used in the constitution, and as documented in the historical records during the framing and ratification process is found to mean trade. The word commerce, as the founding fathers used the word during the framing and ratification process, did not mean the manufacturing process of goods, the cultivation of agricultural products, the production process by which articles of consumption are created, or, similar economic enterprise carried on within the various state borders.
In fact, the term “commerce“, as used by the founding fathers, appears to be almost synonymous with trade or, the exchange of goods, and is interchangeable as such in almost every context in which the founding fathers used the word “commerce” during the framing and ratification process of our Constitution.
From a research of the historical record, it appears to be irrefutable that the word commerce was in fact intentionally meant by our founding fathers, and used by them in their speeches and debates, to refer to trade___ the transportation and exchange of goods between point A and point B, and/or, between the people of point A and point B.
You can find this truth yourself by doing a word search [what a God send are these modern day contrivances called computers] for “commerce” in the Federalists and Anti Federalist Papers, Madison’s Notes, Elliot’s Debates, etc., and, the truth suddenly jumps from the pages of these historical records and instructs us that the SCOTUS, to assist in a tyrannical imposition of FDR’s New Deal, gave a new meaning, an unintended meaning, to the word commerce as used in the Constitution, and did so to allow Congress to seize regulatory control over various commercial activities within the various state borders: agricultural, manufacturing and almost every other commercial activity one can imagine…a regulatory power having nothing to do with the actual trading and transportation of goods from point A to point B after products of trade are produced within a state’s borders, and which the founding fathers wanted to insure would not be interfered with by the imposition of taxation as they moved from state to state, or, interfered with while being shipped. And thus, the power to regulate commerce among [not within] was granted with this specific intent in mind!
In addition, and to further restrict the power of regulating commerce, the founding fathers also commanded that:
<>“No Preference shall be given by any Regulation of Commerce or Revenue to the Ports of one State over those of another: nor shall Vessels bound to, or from, one State, be obliged to enter, clear, or pay Duties in another.” [Art. 1, Sec. 9]
As pointed out in Federalist Paper No. 42 concerning the intent of the power to regulate commerce, Madison states the following:
A very material object of this power was the relief of the States which import and export through other States, from the improper contributions levied on them by the latter. Were these at liberty to regulate the trade between State and State, it must be foreseen that ways would be found out to load the articles of import and export, during the passage through their jurisdiction, with duties which would fall on the makers of the latter and the consumers of the former. We may be assured by past experience, that such a practice would be introduced by future contrivances; and both by that and a common knowledge of human affairs, that it would nourish unceasing animosities, and not improbably terminate in serious interruptions of the public tranquility.
In any event, AG, I have posted the above to give you an example that posting S.C. decisions, does not necessary provide conclusive proof of a point trying to be made. My question to you was simply to determine if the point(s) you were trying to make were in harmony with the legislative intent of those who framed and ratified our constitution. But, you never told me why you posted your links and what the links are supposted to confirm.
In closing AG, I think the comments in this thread would be a lot different if those making the comments had researched the historical documentation concerning the framing and ratification process of our Constitution with reference to raising a federal revenue, as you have indicated you have. It‘s amazing that knowing how the definition of one word used by the founding fathers, as they intended it, can shed light on how corrupt our Congress critters and the members of the SCOTUS have become! Too bad that more people who engage in such political discussions in their attempt to guide us, as is taking place here, have not familiarized themselves with the legislative intent of our Constitution, before giving their advice and proposals
Sincerely
JWK
ACRS
No. Post the part of the "study" that demonstrates how prices could be reduced 20 to 40%.
I will NEVER understand the thinking of those nattering nabobs of negativity who's sole mission in life seems to be to find fault with every positive proposal put forward which would take them, even if in small measure, in the direction they CLAIM to want to go.
The FairTax proposal is, by no means, perfect and I know of no proponent who has ever made such a claim. NO tax system will EVER be perfect but, at least to my mind, the FairTax proposal will, when adopted, move the country in the correct direction. Something I have seen very little of in my lifetime.
Your position seems to be steeped in respect for the Founding Fathers and the Constitution which is all very admirable, but ignores completely the political realities of the 21st century.
ANSWER
Oh, but I do understand the political realities of today, and the reality is, there are a number of folks looking to undo what the founding fathers did, and undo what the founders did for dishonest and subversive reasons.
Many of those who have concocted and promote so called tax reform are the same folks who were trying to get a constitutional convention going in the 1980’s to re-write our Constitution for their own advantage; and many are the same folks who pretended to want a balanced budget amendment added to our constitution in the 1980’s, but the amendment they proposed would make an unbalanced budget constitutional, and would override our founding father’s method of balancing the budget with a direct tax upon the states to extinguish annual deficits, a method devised by our founding fathers to insure each state legislature and its Governor would keep a close eye on the spending habits of their congressional delegation less the various states would be responsible to pay a direct tax for Congress’ reckless and profligate spending and borrowing habits.
Yes buddy, I do know the political realities you refer to, many of which are attempts to deceive the people and brake the chains of our Constitution for dishonorable reasons.
I'll try to find a link to that study for you. I'm not sure where auto's fall in that range. Dont forget to consider tax compliance costs. It's difficult to calculate. The direct tax cost is much more simple.
Given that, would you PLEASE be kind enough as to enlighten me as to what specific proposal(s) you would make to correct that situation?
It seems to me that if you are going to declare your proposal consistent with the legislative intent of the Constitution and any others inconsistent, it becomes incumbent on you to to provide some evidence to support that contention. Going back 200 years and pointing out similarities between your proposal and the system in place does not on its face prove that that system was incorporated into the legislative intent of the Constitution.
ANSWER
But I have no proposal. I have merely documented the founding fathers original tax plan. For the founding father’s tax reform see EXPOSING THE FAIR TAX HOAX ___ scroll down and start reading at:
American Constitutional Research Service Before the
Committee on Ways and Means
United States House of Representatives
June 1995
If you have any specific disagreement with the above being within the legislative intent of our constitution, quote the words and I will try to provide the necessary documentation.
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