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Presidential Panel Hears About Tax System
AP/Yahoo News ^ | May 11, 2005 | MARY DALRYMPLE

Posted on 05/12/2005 12:25:08 AM PDT by FairOpinion

WASHINGTON - A presidential commission looking into how to make income taxes fairer and simpler heard pitches Wednesday from experts with ideas about revamping or replacing the current system.

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The commission examined plans to base taxes on spending rather than income, which could mean a national sales tax or a European-style value-added tax.

As for transforming the income tax, the commission heard proposals for comprehensive change and minor tinkering.

"Not one person who we encountered as we traveled the country told us that our current tax system was good for America and that we should leave it alone," said the commission's chairman, former GOP. Sen. Connie Mack of Florida.

After hearing complaints about tax laws, the President's Advisory Panel on Federal Tax Reform used this meeting to consider ways to replace the system.

Michael Graetz, a Yale Law School professor, offered an outline of how to meld income taxes with a value-added tax. That tax, used widely in Europe, imposes a levy on the increased value of a product at each stage of production.

Under his plan, consumers would see a 13 percent to 14 percent value-added tax appear on their purchases.

Individuals earning less than $50,000 and families making under $100,000 no longer would pay income taxes under such a plan. Those still paying income taxes would get a simplified system and a top tax rate of 25 percent.

"I am very skeptical that you can fix the income tax," Graetz said.

Federal Reserve Chairman Alan Greenspan has told the commission that he supports some combination of income and consumption taxes as a catalyst for economic growth. Others have warned about the dangers of a poorly designed hybrid.

A consumption tax could take the form of a national retail sales tax, a potential replacement for income, estate and payroll taxes. Americans for Fair Taxation offered a plan setting a 23 percent sales tax on purchases, with exemptions for the poor.

An alternate plan, offered by David Burton of the Free Enterprise Fund, would reduce the rate to 8.4 percent for individuals by also levying the tax on businesses.

In the event the current income tax was retained, experts made the case for ways to promote savings and to simplify credits and deductions.

That could mean letting businesses immediately expense their investments and expanding individuals' ability to save money tax free.

"Why go searching for some new, magic elixir with unknown results?" said Ernest Christian, director of the Center for Strategic Tax Reform. He said the value-added tax was an "exotic import" at odds with the U.S. tax experience.

Others endorsed keeping the incentives for homeownership and charitable giving that President Bush wants preserved, while reducing the many other deductions and credits now available.

The commission, which expects to make final recommendations this summer, discussed options for a flat tax that eliminates deductions and credits, reduces income tax rates and erases taxes on investment income.

"There's not a human being alive today who knows what's in the code," said Steve Forbes, a one-time presidential contender who favors the flat tax.

Commission members asked about how the country could shift to such a tax, wanting to make sure the government got the revenue it needed during that transition.

Former Sen. John Breaux (news, bio, voting record), D-La., the commission's vice chairman, asked whether people could accept a system that taxes wages but not investment income. Others raised questions about eliminating the current system's progressive tax rates.

Former Rep. Dick Armey, R-Texas, said it is a "big job" to convince voters that the poor and wealthy could benefit from a flat tax.

"What's fair is to treat everybody exactly the same as everybody else," he said.


TOPICS: Business/Economy; Culture/Society; Extended News; Government; News/Current Events
KEYWORDS: bush43; economicteam; incometaxes; taxes; taxpanel; taxreform; term2
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To: music is math

"my optimal model of taxation in a federation of states would go something like this. the federal government would be constitutionally prohibited from levying taxes of any sort..."

That's great!

A couple friends and I were writing a "dream constitution" a while ago and though one wanted to go with a strict confederacy and almost no central authority outside of defense, I suggested almost exactly the system you just laid out.

Good stuff!


61 posted on 05/12/2005 5:43:31 PM PDT by Clarion (Restrict liberty for security?... The only security IS liberty!)
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To: cartoonistx

Sure!

My favorite tax is probably the head tax for a few reasons:

Very visible, hard to collect from an armed and somewhat transient public and finally, it has a very high "pitchfork factor" (it hurts so bad each time that the people storm the governemnt buildings when it gets too high)

Beautiful!


62 posted on 05/12/2005 5:50:29 PM PDT by Clarion (Restrict liberty for security?... The only security IS liberty!)
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To: ancient_geezer

"Refer comments #23 & #36. Taxes on commerce & consumption were the preferred mode, with capitations and poll taxes relegated to the last resort position along with taxes on property (i.e. direct taxes)."


I don't think I dissagree? I can still dream, can't I?


63 posted on 05/12/2005 5:54:33 PM PDT by Clarion (Restrict liberty for security?... The only security IS liberty!)
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To: Your Nightmare

To #39 "The only way to know if a business is cheating is spot audits."

You get your records from the folks who have nothing at stake... the wholesalers and producers. if the retail does not come pretty close to the supply going in, you can address the problem then and pretty efficiently conduct minimal audits.


64 posted on 05/12/2005 5:59:21 PM PDT by Clarion (Restrict liberty for security?... The only security IS liberty!)
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To: FairOpinion

We have Connie Mack on our side; we just have to get the others.

At least the FairTax group was there.


65 posted on 05/12/2005 5:59:47 PM PDT by rwfromkansas (http://www.xanga.com/home.aspx?user=rwfromkansas)
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To: cartoonistx

"You must admit that we have gone way past the era of the founders' vision of taxation in this country. If we were to return to their proscirption we would put American industry at a disadvantage in the current global marketplace."

He might admit that but, I won't (I think he won't iether).

All exports would of course not be taxed as they have not been retailed yet so the taxes would not translate into high prices abroad. Also, tarrifs would actually help U.S. industry to compete in our protected market against foriegn manufacturers. All retail would pay the final tax and I'm pretty sure that raw materials for production of retail items are tax free?


66 posted on 05/12/2005 6:07:18 PM PDT by Clarion (Restrict liberty for security?... The only security IS liberty!)
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To: ancient_geezer

"Removing the tax burdens on American industry, would make this country a tax haven for international interests, tending to pull industry to the US rather than drive it away as the current system does."

Amen!


67 posted on 05/12/2005 6:09:16 PM PDT by Clarion (Restrict liberty for security?... The only security IS liberty!)
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To: Conservative Goddess

on #54

Thanks for that 'Godess. I am just pecimistic abou the feds letting go of the power to track every little thing that goes on but, I'll cross my fingers ;)


68 posted on 05/12/2005 6:16:19 PM PDT by Clarion (Restrict liberty for security?... The only security IS liberty!)
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To: Clarion

I have a hard time believing that the founders on iether side of that argument would have considered labor as one of those taxable "articles".

Doesn't matter what you have a hard time believing, as a consumption tax is paid by the purchaser in any case, not the one doing the labor. At most the provider of labor collects the tax from the purchaser at time of sale, for remittence to government, but a consumption tax is clearly levied on the consumer of goods not upon the producer (i.e. laborer) thereof.

It isn't the laborer doing the use and consuming, it is not that laborer being taxed. It is the consumer paying the tax in a consumption tax.

I still can never endorse taxes on labor directly

So? You figure taxes collected from you on the basis of property owned or used is in some way any better?

The key factor is whether or not you engage in commerce. As soon as you engage in an exchange with your neighbor, or anyone else, you invoke the protections of contract that government provides and the capacity of government to reach that transaction as the levy on a taxable activity.

Sorry, that's just the way it is. Couple that with the fact that the constitution provides direct authority over the individual to lay and collect taxes with our any restriction of kind and only conditions on how such must be levied according to whether the tax lay on property ownership as a direct tax, or is and indirect tax levied on activities or on exchanges of commerce. You don't have much leg to stand on in your complaint.

 

Do you really suggest that I earn $100 dollars by raking leaves, send $23 dollars in "service taxes" to the feds and then pay another 23% tax on the grocieries I buy that evening?

Certainly do, as under an "excise" or "duty" you collect that $23 from your customer with the gross payment for the service of goods you provide in commerce with that customer.

In fact under the current income/payroll system that taxes both business and individuals. In mfact many individuals pay at the front when wages are earned, then again through embedded tax burdens in the price of goods and services that are paying for:

DO YOU PAY YOUR INCOME TAX
AT THE SUPERMARKET?

by D. Sherman Cox J.D. L.L.M. Taxation

 

The fairtax bunch is not proposing services taxes as far as I know.

The FairTax legislation is a single stage retail tax paid by the consumer that is true. However, in doing so it levies a tax on the payment for goods and services both purchased by a consumer. At the same time it does not levy a tax on the purchases of goods or services necessary to the conduct of a business thus the mechanics of the tax burden is not embedded out of view as it can be and generally is with an income tax or VAT levied on businesses.

The NRST in the FairTax legislation is generally collected from the purchaser by the vendor of goods or services, and remitted to the state sales tax authority in the state his business is located:

 

H.R.25

Fair Tax Act of 2005 (Introduced in House)
http://thomas.loc.gov/cgi-bin/query/z?c109:H.R.25:


`SEC. 101. IMPOSITION OF SALES TAX.

`(a) In General- There is hereby imposed a tax on the use or consumption in the United States of taxable property or services.

`(b) Rate-

  • `(1) FOR 2007- In the calendar year 2007, the rate of tax is 23 percent of the gross payments for the taxable property or service.

*** SNIP ***

(d) Liability for Tax-

  • `(1) IN GENERAL- The person using or consuming taxable property or services in the United States is liable for the tax imposed by this section, except as provided in paragraph (2) of this subsection.
  • `(2) EXCEPTION WHERE TAX PAID TO SELLER- A person using or consuming a taxable property or service in the United States is not liable for the tax imposed by this section if the person pays the tax to a person selling the taxable property or service and receives from such person a purchaser's receipt within the meaning of section 510.

 

And please re-read my most basic requirements for a good tax system. I would never endorse "hiding" taxes under the idea of finding "alternate revenue sources". visibility is one of my top requirements.

Other than income taxes levied immediately upon the citizen, an NRST (i.e. excise collected from the individual citizen at point of sale or as duty on entry to the US) is about the only other option meeting that criteria. Any other is easily hidden from the perceptions of the individual.

 

No direct taxes, especially labor or property.

looks like you are confusing the constitutional meaning of the term of "direct tax" as being something relating to the laborer (as an individual from who a tax is collected.) and the term really only relates to capitations levied simply because you exist (doesn't require any labor, just you) and a tax on property simply because it is owned by you.

I suspect the term you should use that more clearly represents your position is that their should be no immediate taxes on the person doing the labor. I can agree that that is an affront to one's dignity and sense of well being, but there is no constitutional restriction on Congress from laying such a tax, nor has there every been from the day Constitution was ratified. The individual has alway been subject to taxation as duties and excises in many forms from the very beginning with no exception or limit on such taxes stated in the Constitution other than the law be uniform throughout the United States.

 

It is the anti-thesis of liberty and we have it now. As I said before, it's criminal. Why do you think IRS field agents are armed?

I can recall stories from my family history concerning certain levies on whiskey stills laid by the administration of George Washington collected from individual farmers at gun point. You figure that is any less of an afront to one's suppose liberty? There is no right to not be taxed, there is however right to due process, and protection of law in manner in how it is to be accomplished in a non-violent manner.

Violate law of the land, figure that guns can be the means to assure enforcement, such a law lacking compliance by any other means. Even to the point of raising militia's of other states to assure that compliance:

Constitution of the United States

Section. 8.

The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

*** snip ***

To provide for calling forth the Militia to execute the Laws of the Union, suppress Insurrections and repel Invasions;

To provide for organizing, arming, and disciplining, the Militia, and for governing such Part of them as may be employed in the Service of the United States, reserving to the States respectively, the Appointment of the Officers, and the Authority of training the Militia according to the discipline prescribed by Congress;

*** SNIP ***

;--And

To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.

As was done in me ggggran-pappy's time.

George Washington's Proclamation Whiskey Rebellion August 7, 1794:
http://www.yale.edu/lawweb/avalon/presiden/proclamations/gwproc03.htm

George Washington's address on October 20 1794
to General Lee at Bedford, PA

Washington LED Federal troops into Western Pennsylvania enforcing the Federal tax on UNUSED AND OUT OF PRODUCTION private stills owned by individual citizens and farmers as appliances of the land(i.e. private non-commercial Real Property) in Pennsylvania.

United States Statutes at Large, 1st Congress, 3rd Session Ch 15, 1791,
page 202, 204 Sec 21-24;

Sec. 21. And be it further enacted, That upon stills which after the last day of June Next, shall be employed in distilling spirits from materials of the growth or production of the United States, in any other place than a city, taown or village, there shall be paid for the use of the United States, the yearly duty of sixty cents for every gallon, English wine-measure, of the capacity or content of each and every such still, including the head thereof.

Sec. 22. And be it further encted, That the evidence of the employment of the said stills shall be, their being erected in stone, brick or some other manner whereby they shall be in a condition to be worked.

Sec. 23. And be it futher enacted, That the said duties o stills shall be collected under the management of the supervisor in each district, who shall appoint and assing proper officers for the surveys of the said stills and the admeasurement thereof, and the collectio of the duties thereupon; and the said duties shall be paid half yearly wihtin the firest fifteen days of January and July, upon demand of the proprietor or proprietors of each still, at his, her or their dwelling, by the proper officer charged with the survey thereof: And in case of refusal or neglect, to pay , the amount of the duties so refused or neglected to be paid may either be recovered with costs of suit in an action of debt in the name of the supervisor of the district, within which such refusal shall happen, for the use of the United States, or may be levied by distress and sale of goods of the person or persons refusing or neglecting to pay, rendering the overplus(if any there be after payment of the said amount and the charges of distress and sale) the the said person or persons.

 

Fortunately for most folks tax controversies can be handled under the Courts rather than at the end of the barrel of a gun.

69 posted on 05/12/2005 6:48:07 PM PDT by ancient_geezer (Don't reform it, Replace it!!)
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To: Clarion

Put me on that ping if you can. I want te hear about those type of bills. Gives me a reason to smile, ha.

You are now, on the pinger. That's the easy part, wait till you find out what it takes to get off'n it. Guy's gotta make a profit somehow ;O)

I would be a bigger fan of the sales tax if it is run by the states who then send a big check to the feds.

The administration and collection of the NRST is allowed to be under state authorities,

H.R.25,S.25
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.

the law and authority concerning the levy and collection of that tax however, whether we like it or not, still remains a power of the National government.

Constitution for the United States of America:

 

No more coersion by the feds when they threaten to pull federal funds for state failure to comply with some new law. The state could turn right around and "withold" state funds from the feds. What a beautiful stale mate that would be.

Figure on re-witing the constitution then, as that is what that particular dream would take. It is up to states to turn down any largess offered in the first place, to prevent that coercion, or put it down where coercion is believed by the state to be the operative case and price of the national money.

Feds will never let the states run it to that degree though. it will be ultra controlled commerce under the federal thumb when they are done. And we can all get ready to sign up for the "mark" in order to legaly do business.

It has always been amatter of national authority to lay and collect national taxes from the citizen from the first day of ratification of the Consitution. That is not likely to change any time soon. As far as states go, they have the power to turn aside national money and don't. Seems to me there lay as much of a problem in the one taking the bribe as the one tendering it in the particular case.

A concurrent authority to lay and collect taxes from the individual and the businesses he engages in has been the case from the very beginning.

 

James Madison, Federalist #39:

 

Anti-Federalist Papers #3 NEW CONSTITUTION CREATES A NATIONAL GOVERNMENT;

There are but two modes by which men are connected in society, the one which operates on individuals, this always has been, and ought still to be called, national government; the other which binds States and governments together (not corporations, for there is no considerable nation on earth, despotic, monarchical, or republican, that does not contain many subordinate corporations with various constitutions) this last has heretofore been denominated a league or confederacy. The term federalists is therefore improperly applied to themselves, by the friends and supporters of the proposed constitution.

70 posted on 05/12/2005 7:05:59 PM PDT by ancient_geezer (Don't reform it, Replace it!!)
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To: ancient_geezer
Not if you are implying that the system/s you support such as Flat Tax or VATs are actually better in control of evasion and fraud and result in more revenues to government at lower cost to business and the individual.
I believe my original post stated that the panel members had issues with compliance under a NRST.


You make a comparative judgment when in order for you to assert one system is better or another worse. It would be appropriate to show some examples of empirical data demonstrating it not just claims and might be's. FairTax proponents merely claim no worse results than the current national income/payroll tax system for good reasons it seems to me, considering all it takes to evade the current system is to hide income in barter and cash transactions avoiding reports on any wages or income to be taxed.
Again, you are just stating that the compliance under the current system is bad. Where is your "empirical data" on compliance under a NRST? You wouldn't be basing you opinions on just claims and might be's, would you?


I haven't seem much in the way of any kind of logic on your side, mere claims and little substance.
Please... I'll put the substance of my arguments against your's any day. Do you think you irrelevant cut & pasties are substance? They are a joke. Just look at the post I'm replying to. We are talking about the compliance problem of a NRST and you quoting the Federalist papers and John Philpot Curran in a lame attempt to give your post a sense of gravitas but it ends up just making you look pathetic.


You are aware that the underground economies and black markets in invoices allowing businesses claims on credits in VAT nations are going through the roof do you not. As a consequence of the fraud that attends the VAT implementations, the VAT systems grows ever more complex with ever more burdensome regulation and red-tape on small businesses driving them right out of the legal markets. In fact the situation is so bad VAT nations have found it necessary to except businesses (primarily single proprietors & self-employed) operating below threshold levels of sales volume from the VAT altogether or levy of some alternative amounting to a retail sales tax based on their gross sales turnover instead.
And the "empirical data" on the NRST so we can "make a comparative judgment"?


The rest of your post is just litter.
71 posted on 05/12/2005 7:14:07 PM PDT by Your Nightmare
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To: Your Nightmare
Please... I'll put the substance of my arguments against your's any day. Do you think you irrelevant cut & pasties are substance? They are a joke. Just look at the post I'm replying to. We are talking about the compliance problem of a NRST and you quoting the Federalist papers and John Philpot Curran in a lame attempt to give your post a sense of gravitas but it ends up just making you look pathetic.

YN you're losing credibility here. As anyone lurking here can see, AG is addressing the arguments specifically. He uses the debater's own quotes as is customary.

72 posted on 05/12/2005 7:27:52 PM PDT by groanup (http://fairtax.org)
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To: groanup
YN you're losing credibility here. As anyone lurking here can see, AG is addressing the arguments specifically. He uses the debater's own quotes as is customary.
My "argument" was that the panel expressed concerns about compliance under a NRST. How was that "addressed"? Where is the "credibility" in replying that the income tax and VAT have compliance issues, too?
73 posted on 05/12/2005 7:41:13 PM PDT by Your Nightmare
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To: Clarion

I am simply dissagreeing that the lack of tax on a labor based service would create any significant problems for the economy or society.

Considering that more than half the retail business done in the US is sevice oriented, without taxing consumer purchases of services, the tax rate would nearly double for a given level of revenue.

As a self-employed person, in the extreme example of building a barbecue for you neighbor, only your neighbor would be subject to the NRST.

You, with your retail business hat ,do not pay the NRST on the bricks, mortor, delivery of the materials(a service) or any thing associated with the conduct of your retail business (i.e. building that barbecue for that neighbor). [Note I say retail business, for if you produce a product purchased for resale or use in another business, say a restaraunt specializing in outdoor barbecue, no tax is due. Only at the delivery of an item or service for as a final retail product is a sales tax due from the purchaser under an NRST.]

The neighbor the user and retail consumer of the barbeque, however, would be liable for payment of the tax on the total value of that barbecue(which include the value of the labor you put into producing it), generally that tax being paid to you, the provider of the barbeque, for which you provide a receipt for and remit the retail sales tax to your state tax bureau in his stead.

74 posted on 05/12/2005 7:41:46 PM PDT by ancient_geezer (Don't reform it, Replace it!!)
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To: Your Nightmare
My "argument" was that the panel expressed concerns about compliance under a NRST. How was that "addressed"? Where is the "credibility" in replying that the income tax and VAT have compliance issues, too?

That's not the point. You are attacking AG because of his "cut and paste" when it is obvious to everyone here that his cut and paste is very relevant. That's what we do on this board, state an opinion and back it up with sources. He's doing that and you're attacking him for it. Credibility.

75 posted on 05/12/2005 8:32:07 PM PDT by groanup (http://fairtax.org)
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To: Your Nightmare

I believe my original post stated that the panel members had issues with compliance under a NRST.

Well, I am certainly happy to note that you apparently don't have issues with an NRST on that account.

Again, you are just stating that the compliance under the current system is bad.

Do you disagreeing with that assessment? Are you claiming that compliance with income/payroll tax system is good?

I claim that compliance under any tax system is a problem and an NRST is no worse than the tax system is currently in place.

You wouldn't be basing you opinions on just claims and might be's, would you?

I'm basing mine on the observation that it is easier for government to monitor a small number of retail businesses for compliance to a retail sales tax, than to monitor an entire nation of individuals to assure they are all reporting income on which they are liable for taxes.

There can be NO doubt with the difference in just number of tax collection points, focusing enforcement efforts on less than a tenth as many tax filing entities, government will be able to hold the line on total loss of dollars due to evasion. That is especially true considering the largest businesses comprise less than 20% of the number of business entities subject to collecting NRST and make up over 80% of dollar sales volume on which NRST is collectable. That being the case enforcement could be totally focused on large businesses, completely ignoring small self-employed and single proprietors who are documented as the primary culprits in tax evasion under most tax systems and particularly documented as such in the U.S., and still do as well as the current system.

I'd say the inference that compliance will be at least as good in percent of GDP dollars as the current system is well justified. As there are more than ten times the number of tax filers under income and payroll taxes and all it takes to evade an income or payroll tax is to deal in cash and fail to report the income by not filing at all. Such is the nature of the current underground economy is that requiring an individual to file and report income on which to collect a tax from him is a futile and expensive endevour leading to inevitable failure.

We are talking about the compliance problem of a NRST and you quoting the Federalist papers and John Philpot Curran in a lame attempt to give your post a sense of gravitas but it ends up just making you look pathetic.

LOL, and I'll be more than happy to do so again for they are germane to the question of just how much power should be allowed a government in its quest to squeeze tax dollars out of the electorate.

I definitely prefer a giving abit more latitude and less control over to the citizen, rather than more power to government squeeze that poor turnip to pulp. Simply responsiveness of the electorate to a clear view of the economic factors life should be the sufficient constraint over excess burden of government in the design of our political system.

Federalist #21:

"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."

 

Compliance to tax law, comes at a cost in property, liberty and at times more. Going for the tax that claims higher compliance to feed government coffers should be examined with extreme skepticism as to how that is achieved and at what cost to the business and the citizen.

With out a doubt I prefer a giving more latitude and less control over the citizen, rather than more power to government squeeze that turnip:

Federalist #21:

"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."

 

Compliance to tax law, comes at a cost in property, liberty and at times more. Going for the tax that claims higher compliance to feed government coffers should be examined with extreme skepticism as to how that is achieved and at what cost to the business and the citizen.

Bottomline is visibility and peception of the tax burden by the electorate as a whole, for where many do not perceive the cost, and the otherguy appears to be hauling the freight:

It's like me in the restaurant: What do I care about extravagance if you're footing the bill?
Walter Williams

The result is ever going demand for more from government.

The Honorable James DeMint (R-SC)
United States House of Representatives
APRIL 5, 2001

 

Vigilance, dependant upon perception of the burden laid as the price of largess is key to controlling  the expansion of government spending through the citizen rather than relying on government to control itself.

The condition upon which God hath given liberty to man is eternal vigilance; which condition if he break, servitude is at once the consequence of his crime and the punishment of his guilt."
-John Philpot Curran: Speech upon the Right of Election, 1790.

 

And the "empirical data" on the NRST so we can "make a comparative judgment"?

I know of nocomparable flat tax systems. Though much can be determined just by realizing that the only flat tax proposals tendered (replacing only income taxes and leaving payroll tax in place) appear to offer no relief from complexity as it affects business and commerce or even the certainty about whether or not a tax is owed by any particular individual as far a government's desire to know about such things is concerned and its demands for proof that one does not owe more.

Flat Tax as Seen by a Tax Preparer
by Vern Hoven

For empirical data relative to the VAT that you commend, I recommend looking at high rate VAT countries in the EU that have had the most experience and time to achieve a equilibrium with compliance rate and counter tax fraud under high rate conditions.

The compliance rate as percent of GDP, and the effect of the tax regulations systems supporting VAT compliance on economic growth a measure of cost to those nations of imposing the complex reporting and regulatory systems that are encouraged by VAT systems would be appropriate.

For retail sales taxes, the retail sales tax regulatory environment of the states can readily be compared against the regulatory environment of what is required under the current U.S. tax system to demonstrate a significantly lower impact on both the individual and business with consequent positive benefit to the economy can be infered over what is demonstrably achieved under the compliance regime of the national income/payroll tax system taken in comparison.

refer: Tax Evasion: The Underground Economy

 

The rest of your post is just litter.

Only to those who prefer to igore the reality of what any VAT proposal and its regulatory schemes and propesity to foster complex tax schemes in this country would mean.

A New Money Machine for the U.S.
by Bruce Bartlett
http://www.ncpa.org/abo/quarterly/20043rd/clip/20040729lat.htm

"The United States needs to adopt a value-added tax. Passage of the prescription drug legislation last year demonstrated that there is no longer any hope of holding the line on government growth -- especially when Republicans voted for the multitrillion-dollar entitlement program.

That being the case, the only relevant question is how to finance the growth of government. A value-added tax, or VAT, isn't the complete answer. Other taxes are also going to rise."

*** snip ***

The lack of transparency and the low economic cost of a value-added tax make it possible for this tax to raise substantial revenues relatively easily, both politically and economically. The average VAT in Europe is 20%, and European governments raise about one-third of their total revenue from consumption taxes, including excise taxes on gasoline, tobacco and other items. The U.S. raises about half that, including sales taxes at the state and local levels.


76 posted on 05/12/2005 9:00:48 PM PDT by ancient_geezer (Don't reform it, Replace it!!)
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To: Your Nightmare

Considering the way you have been changing what you claim to have said as you go from post to post, the “credibility” comment is right on the money.

In your original post #20 you said with great forcefulness that “every member” on the panel “had issues” (whatever that might mean since it is exceedingly vague) with the NRST and compliance. Presumably - though it is not certain given your flip-flopping track record on this thread - the term NRST actually meant the FairTax which is a particular type of NRST.

In any event, you then made the completely unsupported allegation that compliance was the “Achilles Heel” of the FairTax and that the presenter of the writeup to the panel was “never able” to give a reasonable answer. You are certainly welcome to your opinion but clearly there are any number of people who disagree with your point of view

But to continue on with your credibility problems, in your #39 response to the observation that the income tax had a very high compliance problem that was something like 20-25%, you attempted to claim that the correct figure was 15-17% along with the pointless remark “... some more than others ...” apparently attempting to infer the FairTax was somehow a major problem in this regard (I don’t think so) when you claimed to have somehow “proven” the approximation I gave was incorrect. It was not as at least 2 on this thread have pointed out to you but is instead a close approximation which I personally think is low.

The fact that the tax is collected at one point in the chain is, if anything, most likely an advantage since the responsibility for its collection is clearly known and, as several states now do with their sales tax, can be “audited around” as a compliance check and there are other factors to limit non-compliance as well. With the tax systems you seem to favor - VAT or flat - there are actually many more opportunities for evasion and noncompliance than with the FairTax partly because there are so many decentralized points in any such system and the marginal gains are greater in addition to outright fraud by falsifying invoices, etc. which can benefit both parties.

I can think that perhaps .... though, of course, since you choose to be so “clever” that you will not identify the specific system you prefer ... it may very well be that your preferred system is even worse in that regard. That apparently is your fear in not identifying or perhaps it is just a more convenient artifice for your flip-flopping to the attack du jour.

But back to credibility. In post #28 you make another completely unsupported allegation that
“... the NRST is the worst of them all ...” referring to compliance. As an aside, in #35, I wonder just how much your “guarantee” of the panel’s report. In view of your difficulties with credibility problems, you may be very surprised as you seem to have missed the growing and wide support for the FairTax once citizens understand what it really is.

In post #39 you attempt a (misguided) swipe at the estimate I offered of IRS number for evasion under the present system along with a swipe at the FairTax apparently (“... but some more than others ...). I asked you in view of that fact (the 20-25% IRS number which you tried to claim was not a fact but which at least 2 on this thread have pointed out is, in fact, a fact) how was it you believed the FairTax was worse. You chose a non-response by saying something like “common sense, mostly”. Very funny and if you were at all familiar with the VAT as implemented among our Euro-friends and the considerable logistic and evasion problems there along with the ease of political tampering since they invariably have exemptions and/or income tax components, you would offer something more concrete than the common sense remark.

There are indeed was of compliance checking with the FairTax and they are typically nopt so intrusive as the VAT/flat tax forms. Several states presently have sales tax audits where they audit around a given retailer - and there are other methods as well - so that really seems a non-issue when compared to the VAT/flat compliance headaches (and those systems don’t even pretend to get to the underground economy). If anything, collecting the tax at one point (and very few points to boot relative the VAT/flat problem) is an advantage over your apparently preferred system.

In your post #49 you attempt to back out of your overly-extravagant statement of #20 by claiming “... many of the panel members ...”. Once again, dishonesty perhaps rears its ugly head since #30 clearly states “every member” and it is hardly irrelevant since you are the one making all the assertions (unsupported) that your preferred tax forms are superior with regard to evasion/compliance - and all without specifically identifying them. Credibility, indeed (or really lack of it).

Moving right along, in #52 you again try to alter your original statement and pretend to not know what a writeup might be which should be clear since we are discussing the Tax Panel. Show us in these Tax Panel presentations where “all members” said any such thing about FairTax compliance. The tas form you support is highly relevant since it is you who have made an unsupported attack on the FairTax compliance and that, to be honestly viewed, must be contrasted with a specific tax bill whether VAT or flat. Which plan do you support? That of Charles McClure of that of Michael Graetz? Or can you link us to some other specific VATplan or bill before Congress?

In #71 anc #73 you morph your original statement a bit more. Whoa, Nellie!!

Straighten up your act, man.



77 posted on 05/12/2005 9:19:10 PM PDT by pigdog
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To: groanup
That's not the point. You are attacking AG because of his "cut and paste" when it is obvious to everyone here that his cut and paste is very relevant.
Did you poll "everyone"? Where is your "empirical data" that "it is obvious to everyone here that his cut and paste is very relevant"?


That's what we do on this board, state an opinion and back it up with sources. He's doing that and you're attacking him for it. Credibility.
Please, AG's modus operandi is to steadfastly defend the FairTax with irrational asumptions and illogical conclusions and then litter his posts with quotes from sources that he thinks will make him look educated, like the Federalist Papers.

If you want a real laugh, go look at some of his posts on global warming.
78 posted on 05/13/2005 4:15:41 AM PDT by Your Nightmare
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To: Your Nightmare

Everyone. Everyone sees what's happening.


79 posted on 05/13/2005 4:39:09 AM PDT by Principled
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To: Your Nightmare

Reduced to ad hominem again. Pitiful.


80 posted on 05/13/2005 4:39:50 AM PDT by Principled
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