FairTax.Org HR25

WWW.FAIRTAX.ORG ^ | Last Week | Thomas Leser

[nsmart]

The FairTax is the non-partisan national sales tax proposal that would replace all federal income taxes. These include personal, estate, gift, self-employment, alternative minimum, capital gains, FICA, and corporate and death taxes.

[ancient_geezer]

Common sense and legal presidence says that a tax on income is not a tax on the source of that income. Taxing a government employee's income is not taxing the government.

Common sense said the world was flat and you could fall off the edge if you went to far from home, and legal precidence supports the continuation of Roe v Wade.

Sorry, if the government is financing it, taxing it has only made sense in preventing economic distortions such as is created out of apparent low pay for civil servants and military or the price of government purchases as compared costs to the private industry, and is why any sales tax system must tax consumption goods and services by government the same as the household is taxed in aquiring goods and services.

For none consumption situations however, the federal irrational roundrobin of taxing payments received from government is exactly why SS benefits, at one time, were not taxed, welfare distributions are not taxable and government grants generally escape the IRS axe for whatever rationale.

[Bigun]

My opinion is that income/payroll is the base of the income/payroll taxes.

And my opinion is that the source(s) of one's income should not be relevant to one's duty to pay his fair share of the costs of government since those who earn ILLEGAL incomes interact with those of us who earn legal incomes in every manner imaginable.

[Your Nightmare]

Sorry, if the government is financing it, taxing it has only made sense in preventing economic distortions such as is created out of apparent low pay for civil servants and military or the price of government purchases as compared costs to the private industry, and is why any sales tax system must tax consumption goods and services by government the same as the household is taxed in aquiring goods and services.

So when a government employee pays a sales tax it's really a tax on the government.

Please. I'm not going to get into another one of these stupid discussions that go 'round and 'round just because you have some pathological need to be right about everything. It's beyond pathetic.

A tax on income is not a tax on the source of that income. Period.

[Your Nightmare]

And my opinion is that the source(s) of one's income should not be relevant to one's duty to pay his fair share of the costs of government since those who earn ILLEGAL incomes interact with those of us who earn legal incomes in every manner imaginable.

Whatever, but if you think the FairTax is going to tap some unmined source of revenue in the underground economy, it ain't gonna happen.

[ancient_geezer]

A tax on income is not a tax on the source of that income. Period.

Strange, but the government, you know the folks actually levying those taxes on us, hold an entirely different view on that one.

Springer v. United States(1880), 102 U.S. 586

"The central and controlling question in this case is whether the tax which was levied on the income, gains, and profits of the plaintiff in error, as set forth in the record, and by pretended virtue of the acts of Congress and parts of acts therein mentioned, is a direct tax."

"Our conclusions are, that direct taxes, within the meaning of the Constitution, are only capitation taxes, as expressed in that instrument, and taxes on real estate; and that the tax of which the plaintiff in error complains is within the category of an excise or duty."

 

KNOWLTON v. MOORE, 178 U.S. 41 (1900)

• 'indirect taxes are levied upon the happening of an event or an exchange.'

BROMLEY v. MCCAUGHN, 280 U.S. 124 (1929)

• While taxes levied upon or collected from persons because of their general ownership of property may be taken to be direct, Pollock v. Farmers' Loan & Turst Co., 157 U.S. 429 , 15 S. Ct. 673; Id., 158 U.S. 601 , 15 S. Ct. 912, this court has consistently held, almost from the foundation of the government, that a tax imposed upon a particular use of property or the exercise of a single power over property incidental to ownership, is an excise which neet not be apportioned

Tyler v. U.S. 281 U.S. 497, 502 (1930)

• An indirect tax is a tax laid upon the happening of an event,as distinguished from its tangible fruits.

 

Stanton v. Baltic Mining Co.(1916), 240 U.S. 103:

• "the provisions of the 16th Amendment conferred no new power of taxation, but simply prohibited the previous complete and plenary 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, and being placed in the category of direct taxation subject to apportionment"

 

House Congressional Record, March 27, 1943, pg. 2580:

• "The income tax is, therefore, not a tax on income as such. It is an excise tax with respect to certain activities and privileges (the type 3 and 4 taxes) which is measured by reference to the income which they produce. The income is not the subject of the tax; it is the basis for determining the amount of tax."

[lewislynn]

Strange, but the government, you know the folks actually levying those taxes on us, hold an entirely different view on that one.

Those are court decisions...courts don't actually levy taxes.

[ancient_geezer]

Those are court decisions...courts don't actually levy taxes.

They how ever do make sure the tax law is framed in such a way as to be levied in a Constitutionally defined manner, else they must kill tht law on challenge.

For if the income tax is not of the class of indirect taxes, it is being levied in an manner inconsistant with Constitution and clear legal precident going bacl to the very first tax case before the USSC:

 

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."

[Bigun]

...if you think the FairTax is going to tap some unmined source of revenue in the underground economy, it ain't gonna happen.

So says YN for whatever that is worth. I happen to think otherwise for whatever that is worth.

[nsmart]

For a tax to be fair.. everyone must pay it (even if they get the entire amount back in pre-bate), .. it must be visible (so we all know what our government costs, ... it must be broad ..(no way to avoid). Reagan gave us a broad, semi-flax (three bracket) tax but look what happened .. it eroded.

I do not think there is any way to erode the Fair Tax.

I also love not having the IRS in my affairs.

[nsmart]

"Last night the onondaga county conservative party of NY, passed a resolution to urge our elected federal offcials to
sponsor and support the fairtax bills."

Whooohoo.. Great News.

[Bigun]

I'm with you on every point! Absolutely!

[Always Right]

There are two criminals in the activities you list, the seller and the buyer. Currently the buyers are taxed and the seller don't. Under the FairTax sellers would pay and the buyers don't. It's a wash!

I made that point a hundred times. It's either stupidity, stubborness, or just brainwashing, but they can not concede a point no matter how obvious it is.

[Always Right]

So says YN for whatever that is worth. I happen to think otherwise for whatever that is worth.

YN is absolutely correct. Unless you have prostitutes and drug dealers collect and remit sales tax for their goods and services, that economic activity is untaxed under both systems. It is not a matter of what anyone thinks, it is a fact. Under the current tax system, the prostitute illegally avoids the income tax she owes. Under the NRST, the prostitude illegal avoids collecting and paying sales tax. Depending on the income bracket she is in, she quite probably will actually be avoiding more tax under the NRST system. Both system only capture this money once it is brought into legal economic activity.

[Your Nightmare]

Springer v. United States(1880), 102 U.S. 586

1880? That must bring back memories.

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KNOWLTON v. MOORE, 178 U.S. 41 (1900)

1900, huh?

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BROMLEY v. MCCAUGHN, 280 U.S. 124 (1929)

Property taxes? We aren't talking about property taxes.

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Tyler v. U.S. 281 U.S. 497, 502 (1930)

• An indirect tax is a tax laid upon the happening of an event,as distinguished from its tangible fruits.

Hmmm...

A tax laid upon the happening of an event, as distinguished from its tangible fruits, is an indirect tax which Congress, in respect of some events not necessary now to be described more definitely, undoubtedly may impose. If the event is death and the result which is made the occasion of the tax is the bringing into being or the enlargement of property rights, and Congress chooses to treat the tax imposed upon that result as a death duty, even though, strictly, in the absence of an expression of the legislative will, it might not thus be denominated, there is nothing in the Constitution which stands in the way.

So you misquoted and quoted out of context. This was about death taxes, not income taxes. So according to the standards you apply to me, you are a liar.

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Stanton v. Baltic Mining Co.(1916), 240 U.S. 103:

Stanton v. Baltic Mining? You get this from a tax kook website?

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House Congressional Record, March 27, 1943, pg. 2580:

So now you are claiming statements made on the House floor as evidence of fact?

This is typical of you, AG. You find a bunch of out of date rulings and assume time stood still for the last 70 years. Throw in the obligitory irrelevant cut & pastie and you've got a classic AG post.

Let's take a look a couple of more recent rulings:

GRAVES v. PEOPLE OF STATE OF NEW YORK, 306 U.S. 466 (1939)

The present tax is a non-discriminatory tax on income applied to salaries at a specified rate. It is not in form or substance a tax upon the Home Owners' Loan Corporation or its property or income, nor is it paid by the corporation or the government from their funds. It is measured by income which becomes the property of the taxpayer when received as compensation for his services; and the tax laid upon the privilege of receiving it is paid from his private funds and not from the funds of the government, either directly or indirectly. The theory, which once won a qualified approval, that a tax on income is legally or economically a tax on its source, is no longer tenable,

 

and a little more recent

OKLAHOMA TAX COMM'N v. CHICKASAW NATION, ___ U.S. ___ (1995)

The Tribe and the United States further urge us to read the Treaty in accord with the repudiated view that an income tax imposed on government employees should be treated as a tax on the government.

So, again, a tax on income is not a tax on the source of that income. Period.

[Your Nightmare]

YN is absolutely correct. Unless you have prostitutes and drug dealers collect and remit sales tax for their goods and services, that economic activity is untaxed under both systems. It is not a matter of what anyone thinks, it is a fact. Under the current tax system, the prostitute illegally avoids the income tax she owes. Under the NRST, the prostitude illegal avoids collecting and paying sales tax. Depending on the income bracket she is in, she quite probably will actually be avoiding more tax under the NRST system. Both system only capture this money once it is brought into legal economic activity.

In thinking about it, the FairTax may actually be much worse than the current system at capturing illegal drug money. The vast majority of illegal drugs are imported. We have a "trade deficit" in illegal drugs. So there is a lot of legal income flowing into the domestic drug market and then flowing out of the country, not to be spent on domestic consumption. The current system taxes than money before it gets into the drug market and it has a chance to leave the country (unspent).

[Bigun]

YN is absolutely correct. Unless you have prostitutes and drug dealers collect and remit sales tax for their goods and services, that economic activity is untaxed under both systems. It is not a matter of what anyone thinks, it is a fact. Under the current tax system, the prostitute illegally avoids the income tax she owes. Under the NRST, the prostitude illegal avoids collecting and paying sales tax. Depending on the income bracket she is in, she quite probably will actually be avoiding more tax under the NRST system. Both system only capture this money once it is brought into legal economic activity.

Both you and YN are absolutely WRONG! Under the the NRST the proceeds of those sales will eventually be spent, just as they are today, the only difference being that under the NRST that spending is taxed were it isn't today under the income tax.

[Always Right]

the only difference being that under the NRST that spending is taxed were it isn't today under the income tax.

But under the current system all the taxes are embedded into the cost of goods anyways, so it still gets taxed once the prostitute spends her money. Under both systems, legal transactions result in taxes eventually getting paid, and illegal transactions do not result in taxes getting paid until that money is spent on something legal. It is basically a wash and I have never understood why NRST folks don't get it. It is not really a debatable point.

[Your Nightmare]

Both you and YN are absolutely WRONG! Under the the NRST the proceeds of those sales will eventually be spent, just as they are today, the only difference being that under the NRST that spending is taxed were it isn't today under the income tax.

Boy, you don't get it, do you? Let me try to explain.


Under the current system:

Person makes $100. Gets taxed 25%, or $25, and spends $75 on drugs. $25 is collected in taxes.

Under the FairTax:

Person makes $100 and pays no income tax and spends all $100 (prices go up) on drugs. The drug dealer take that $100 and buys some new bling-bling and pays 25% inclusive NRST, or $25 - the same amount as was collect under the current system.

And this assumes some of that $100 doesn't go to Columbia to buy more "stock."

[ancient_geezer]

So, again, a tax on income is not a tax on the source of that income.

A useful point about the immediate source of payment of the compensation paid not being taxed where taxation in regard income received is concerned, the cites will be useful in other contexts. That however and has little to do with the fundamentals that I was expressing.

For your statement misses the prime issue, that the subject of an indirect tax is the activity or exchange engaged in and not the compensation used as factor in measuring the amount of the tax to be paid.

That activity or exchange is the essential, that "property incidental to ownership" that classifies a tax as indirect as opposed to direct (where tax is levied merely because of ones ownership.)

To not tax activities or exchanges the same for government as for the individual causes economic dislocations and is the essential reason it makes sense to tax government purchases of goods and services the same as you would household purchases of goods and services.

The case of purchasing services without a tax paid by government agencies, which government could legally arrange and you apparently advocate, creates a situation of net advantage to government agencies in purchasing resources away from the household's access to them at cost lower to government agencies than is available to the household which is taxed.

Essentially the government is able to offer a compensation higher, by the rate of the tax, to the service or goods provider outbidding the household in competition for the same pool of resources.

Not taxing government agencies operates to deplete resources from the markets reducing the supply available to the private sector. The same principle operates for goods as well as services drawing resources away from consumer applicaton and into government utilization.

[lewislynn]

The employee sees a 7.65% raise. The employeer sees a 7.65% of wages reduction in costs.

You obviously don't comprehend one word of the paper written by the authors of the fairtax when they used the example of a couple whose income "under the fairtax will increase" the amount of the employer half of the payroll tax. Otherwise I don't understand your endless attempts at trying to make liars out of AFT, Dan R. Mastromarco and David R. Burton the authors of the fairtax bill.

[26] If the $47,129 of our family's income was all wage income, then that couple would have paid $3,605 in employee payroll taxes on those wages. Note also that their wages were also about $3,605 lower because of the employer payroll tax......

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[28] Under the AFT Fair Tax plan, their disposable income will increase to $50,734 because of the repeal of all payroll and income taxes.

Their words, not mine...

Under the AFT Fair Tax plan Their income WILL increase ($47,129+$3,605[employer half]=$50,734) because of the repeal of ALL payroll taxes.

Not maybe if the employer decides but WILL.

Get it?...