Posted on 02/03/2005 9:54:12 AM PST by EternalVigilance
CONGRESSMAN STEVE KING INTRODUCES RESOLUTION TO ELIMINATE IRS
WASHINGTON - As W-2s arrive in mailboxes this week, U.S. Congressman Steve King has introduced a resolution to repeal the 16th Amendment to the Constitution, which gives Congress the authority to collect income taxes.
H.J. Res. 16 would eliminate the IRS and the means for the government to collect income taxes.
"The IRS is an out-of-date, trillion-dollar-a-year drag on our economy," said King. "Instead of continuing to band-aid our complicated, leaking tax system year after year, we can choose a permanent solution and finally rid Americans of the fat leech they feed their paychecks to."
King has been a long-time supporter of the FairTax, a national sales tax placed on goods and services, which would replace the income tax.
H.J. Res. 16 must be approved by two-thirds of both the House and Senate, and then sent to the states, where three-fourths must ratify the amendment.
For information on the FairTax, visit:
http://www.fairtax.org
U.S. Congressman Steve King
Iowa's Fifth Congressional District
1432 Longworth House Office Building · Washington, DC 20515
http://www.house.gov/steveking/
Real prices would fall under any kind of revenue neutral VAT, including the sales tax.
Strange that wasn't the experience with the Australian GST,( as credit/invoice VAT) which was a revenue neutral replacement of a single stage wholesale tax. Inflation jumped prices up 3% of the tax adjusted price of goods and services when the GST went into effect.
Most of that was attributed to the costs of startup and regulatory cost that were necessary over and above their orginal wholesale tax.
On top of it all their underground barter/cash economy took off like a rocket from folks trying to bypass the red tape and government intervention involved with that VAT. Australia's experiences represents a primary case study of effects of replacing a single stage sales tax with a VAT.
But why start with a constitutional amendment, requiring a supermajority? Why not just introduce a bill to abolish the income tax, requiring only a simple majority?
Can you say "political grandstanding"? I knew you could!
This is the correct perspective. The giant has to be hit with many arrows before he falls. The first was the hearings in the 90's by the newly elected Gingrich majority. This is the second. The third and fourth are not going to take 10 more years to hit. They will all hit this year. The giant will be quite prickly by December.
That would be a political killer. Imagine how Democrats would say that everyone pays the same rate for sales tax. Why do high income earners get larger accounts than low income earners? Their disingenuousness would rival that of the "Fair Tax" supporters.
Inflation is not caused by taxes (fiscal policy). Inflation is wholly a monetary (policy) phenomenon. Do you know the difference?
This is something I posted on another thread. If I am in error, please correct me. I would especially appreciate if you could show me the provision of the FaltTax that makes it border neutral.
Some of the reasons I believe the FairTax is better than the Flat Tax:
1 - Under our current system, as well as under the Flat Tax, the taxes are levied at the production level, and increases the costs of our goods before they go to market. This happens throughout the entire production tree resulting in American made products having a cost burden of all the corporate, income, and SS taxes paid through production. This effectively puts a tax on our exports, and although it is not treated as an export tarrif (which are expressly forbidden by the Constitution) it accomplishes the same thing, and makes our own exports less competitive than if we taxed at the point of consumption rather than during production.
In fact, taxing income is WORSE than taxing exports, because it not only accomplishes the same effective tarrif for exports, it effectivly puts that tarrif on ALL American made goods, even if sold domestically. Other countries (China being a big one) are able to insert their products in American markets without being burdened by Federal taxes. That is the exact oposite of protectionism. Both the current system and the Flat Tax are effectively protectionist measures for everyone else at America's expense. The FairTax shifts the point of collection from production to consumption. This allows our products to be exported without the burden of federal taxation (consistent with the Constitutional prohibition on export tarrifs). ALSO, it taxes imported goods at the same rate as domesticly produced goods.
2 - Because the FairTax is collected at the retail level instead of the production level, non-retail business will experience an immediate gain by eliminating their federal tax burden, which should have the effect of lowering costs throughout the entire economy.
3 - Forbes tried to sell America on the FlatTax in 2000 and arguably failed. The FairTax, is much more salable. It has been my experience that everyone, without exception, with whom I have discussed the FairTax face to face, were initially sceptical and offered objections, but were quickly and easily won over and persuaded to be stongly in favor of the FairTax... Even several liberal democrats. That is simply not going to happen with the FlatTax.
4 - The FairTax broadens the tax base relative to the Flat Tax. The FairTax would collect tax from foreign (legal or otherwise) visitor's consumption, who are imune from taxation now. Criminals and others who do not report thier income would be taxed on their consumption. This dynamic would shift some of the Federal tax burden off of American's an onto those who are benefitting from being here but not taxed under our current system or the FlatTax.
5 - The FlatTax leaves the system in place that began as a simple system, open to further manipulations that resulted in the mess we have now. The FairTax repeals large amounts of code, and seeks to repeal the 16th ammendment, making it once again, unconstitutional to have a Marxist income tax.
You usually are. LOL :)
The flat tax, sales tax and VAT are all border neutral.
With the caveat that no special credit is required in the retail sales tax case to refund taxes paid on goods manufactured, as no retail tax exists for business to business purchases. No red tape, far less in the way of regulatory cost to manufacturers and exporters.
Flat Tax, don't see how you are going to make that one fly, as it is both a wage tax coupled with a corporate income tax. Just removing taxes on investment/savings income per-se does not a border neutral/adjustable tax make.
With at VAT applying the credit back to the exporter does the trick, under a flat tax no practical way to accomplish that for the full chain of taxable levels of production that goes into an export product. Flat Tax doesn'et have the mechanism built in for crediting all stages of tax fowarding.
Well, you had to know it was a possibility; we've been here, done this before.
The FairTax bill does just that. HR25/S25. The bill referenced in this thread is a supplementary effort to repeal the 16th amendment to make sure a progressive income tax is, as it was before 1913, unconstitutional.
No caveat required. No credits. No forms. No nothing. All VATs are border neutral including the flat tax and sales tax.
Do you understand international economics? I'd have to get into current accounts and capital accounts to explain it to you.
Okay, I want into this fray. I agree with you - this fair tax is indeed very good. I've been yelling about it for over a year now. The current system is not fair; it only taxes those of us who are "honest" or W2/1099 holders. Why should the underground economy be exempt?
That's exactly what the FairTax bill does. Its passage is not linked to this bill. It is linked to it only in the sense that sensible people want both.
Inflation jumped prices up 3% of the tax adjusted price of goods and services when the GST went into effect.
Inflation is not caused by taxes (fiscal policy). Inflation is wholly a monetary (policy) phenomenon. Do you know the difference?
Yes I know the difference, so lets just say the Australian price indexes based on price of goods and services rose 3% beyond what was accountable for the 10% VAT replacing the wholesale tax imposed.
http://www.abs.gov.au/ausstats/abs@.nsf/0/43742a462f6606ecca256e7d0000264a?OpenDocument
Actually King's bill is the third hit, if that 2nd Curcuit Appeals Court ruling is correct that the IRS cannot just force someone to reveal their records just by 'requesting' them and instead the IRS has to first go to court to force someone to turn over their records
You claim that the flat tax is better than the NRST.
Not even close to true.
It meets few of the basic goals of fundamental tax reform.
Income taxes are fundamentally flawed from their inception.
The appeals court ruling I am talking about took place a couple of days ago.
This is another piece of misinformation originating from the sales tax advocates. A sales tax cannot capture illegal transactions like a drug sale. The drug dealer is not going to collect and remit a sales tax.
But what about when the drug dealer buys a loaf of bread? Well, that is not the underground economy. That is the legitimate economy. The bread transaction will be captured by a sales tax, VAT or flat income tax.
Say whatever you want. Inflation is a monetary issue, not a fiscal one. If prices rose 3%, it was due to monetary policy.
What school of thought would argue otherwise?
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