Required Reading for the Tax Revolution

FRee Market Project ^ | August 1, 2005 | Free Market Project

[phil_will1]

FairTax would free markets, individuals from income tax.

In “The FairTax Book,” Rep. John Linder (R-Ga.) and libertarian talk radio host Neal Boortz offer a witty and straightforward explanation of the political and economic consequences of making April 15 “just another day.” Published by Regan Books, it hits bookstores this week. And if tax reform is not a “hot” topic now, then give this book a month on the New York Times bestseller list for things to change.

The FairTax is a bold idea to replace the income tax with a national sales tax. What’s so bold about it? Not only would the FairTax get the IRS off the nation’s back, but it would unshackle the economy to grow free of an achievement-punishing income tax.

The FairTax is a 23 percent sales tax designed to be revenue-neutral, meaning the tax would generate the same amount of revenue as the old system. Why 23 percent? Because once the cost of the income tax was phased out, prices on consumer goods would drop by that amount.

The Free Market Project is pleased to present the following excerpts from “The FairTax Book.” by Neal Boortz and John Linder. All rights reserved. No part of this book may be used or reproduced without written permission from HarperCollins Publishers, 10 East 53rd Street, New York, NY, 10022.

[phil_will1]

The visibility of the FairTax is increasing significantly with this book. Linder and Boortz will be on Hannity and Colmes tonight.

[phil_will1]

I just found out that the FairTax book will be in Target, Kroger's and Publix, among others. The book signings here in Atlanta will be huge the latter part of this week.

[sinanju]

I'm sorry but I have heard too many reservations from the conservative side of the economic aisle to get hyped up about this scheme. Why not stick with the flat tax? Unlike this national sales tax it actually has a long, successful track record in numerous countries.

[Always Right]

The FairTax is a 23 30 percent sales tax designed to be revenue-neutral, meaning the tax would generate the same amount of revenue as the old system. Why 23 30 percent?

OK, let's make the statement honest.

[DennisR]

Bingo - flat tax (10% maximum) is the only way to go - with absolutely no deductions for anything. And everyone has to pay - no "ceiling." Because whether you make a million a year or a hundred a year you benefit from living in this country. And things you get for free are just not as precious as those for which you have to pay.

[dljordan]

"Bingo - flat tax (10% maximum) is the only way to go - with absolutely no deductions for anything. And everyone has to pay - no "ceiling." Because whether you make a million a year or a hundred a year you benefit from living in this country. And things you get for free are just not as precious as those for which you have to pay."

You got it. NO deductions and EVERYONE pays something. It'll never happen but we can dream.

[phil_will1]

"Why not stick with the flat tax? Unlike this national sales tax it actually has a long, successful track record in numerous countries."

For starters, the current system started as a flat tax. The monstrosity that we have now is a flat tax on steroids. When you tax income, you always have the problem of defining what "taxable income" is. In the 90+ years we have been attempting to do that, we have never been able to do it in a manner that is understandable even to the so-called experts.

In addition, when you tax corporate income and payroll at each level of the supply chain, you imbed the cost of your tax system into your domestic production. Then our products compete with VAT countries which either
(1) remove their VATs from their goods when they ship them to us, or
(2) add their VATs onto our products when we ship them outside the USA.
Is it any wonder that we have a huge and growing trade deficit?

In addition, Social Security and Medicare have major solvency problems tied to demographics. As long as we raise those revenues from a payroll tax, those problems will get worse and worse.

That should do for starters.

BTW, if you like a flat tax, you should love the AMT.

[Amalie]

Moreover, though I am a conservative, I don't trust Washington one bit with this. My fear is seeing this AND a small remaining income tax that can balloon at DC's money-lust will. Here in TN, we pay almost 10% sales tax (no state income tax); this would make our tax burden 1/3 of the cost of a purchase, and more once the politicians manipulate it. It sounds good in theory, but I don't think it is practical to think that the theory will translate into good legislation.

[IronChefSakai]

How about getting rid of the Federal Income Tax and that's it! I dont see where it says in the Constitution where the Federal Government has any right to tax its population. Actually, the Fed's only constitutional source of income would be from trade tariffs but since everyone in DC is pretty much all for the free trading i dont know how that would work nowadays. My thoughts are, that if the federal govt cant support itself on less than 15% of all the working american's earnings (assuming there are no tax law changes) then it is too big and needs to diet. I say let the states levy taxes and return the fed to its constitutional roots.

[ancient_geezer]

A Taxreform bump for you all.

If you would like to be added to this ping list let me know.

John Linder in the House(HR25) & Saxby Chambliss Senate(S25) offer a comprehensive bill to kill all income and SS/Medicare payroll taxes outright and replace them with with a national retail sales tax administered by the states.

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.

Refer for additional information:

• search: "national sales tax" OR "national retail sales tax" OR "fairtax"

[IronChefSakai]

I wonder if anyone has thought about the "Black Market" of consumer goods that may evade taxation. For example, farmers selling foodstuffs at a fleamarket or a skilled craftsman such as a chainsaw artist selling their products without some sort of governmental safety net in place to collect its taxes. It sounds ok in theory (and i suppose you need a way to tax the illegals) but i'm not all about letting the fed's tax me being that it is unconstitutional to begin with.

[ancient_geezer]

I dont see where it says in the Constitution where the Federal Government has any right to tax its population.

You might try looking at what the folks who wrote the Constitutution & those that were there at the time had to say about that subject.

 

Federalist #34:

• ``A CONCURRENT JURISDICTION in the article of taxation was the only admissible substitute for an entire subordination, in respect to this branch of power, of State authority to that of the Union.'' Any separation of the objects of revenue that could have been fallen upon, would have amounted to a sacrifice of the great INTERESTS of the Union to the POWER of the individual States. The convention thought the concurrent jurisdiction preferable to that subordination; and it is evident that it has at least the merit of reconciling an indefinite constitutional power of taxation in the Federal government with an adequate and independent power in the States to provide for their own necessities.

Federalist #39:

• "The difference between a federal and national government, as it relates to the OPERATION OF THE GOVERNMENT, is supposed to consist in this, that in the former the powers operate on the political bodies composing the Confederacy, in their political capacities; in the latter, on the individual citizens composing the nation, in their individual capacities. On trying the Constitution by this criterion, it falls under the NATIONAL, not the FEDERAL character;"

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.

Federalist #45:

• "The change relating to taxation may be regarded as the most important; and yet the present [Continental] sic Congress have as complete authority to REQUIRE of the States indefinite supplies of money for the common defense and general welfare, as the future [Constitutional] Congress will have to require them of individual citizens;

James Madison, Elliots Debates Vol 3 p128:

• "If a government depends on other governments for its revenues -- if it must depend on the voluntary contributions of its members -- its [*129] existence must be precarious."

• "If the general government is to depend on the voluntary contribution of the states for its support, dismemberment of the United States may be the consequence."

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."

[jpsb]

So my business does 200,000 in sales but I spend 100,000 in inventory, I can't deduct the 100,000 I have to spend to make the 200,000? LOL, no thank you.

[calex59]

The flat tax is still an income tax. Our country did very well on sales taxes until the early part of the 20th century when congress passed the 16th amendment and BSed people into thinking it would only affect the rich. See what happened to it. It was a flat tax at the time.

As long as we leave the income tax in place we leave ourselves open to the same thing we have now. We don't need an income tax of any kind. Sales taxes work better than income taxes and we don't make criminals of our citizens with it the way we do with an income tax.

I have been praying for the people of this country to come to their senses in regards to an income tax since I was a young man( a ways back) and now we are finally getting somewhere but too many people can't seem to give up the apron strings of an income tax.

As far as the people who say that the real amount of the tax is 30 percent, so what? We pay that and more now with the income tax. We will pay what we pay now except for one big difference: You don't have to buy goods if you don't want.

[ancient_geezer]

It sounds ok in theory (and i suppose you need a way to tax the illegals) but i'm not all about letting the fed's tax me being that it is unconstitutional to begin with.

So the farmer's thought in Western Pennsylvania as regards their whiskey stills.

There were folk who had their properties sold out from under them over simple excises, such as the still tax levied on farmers which led to a rebellion over such, squashed by President Washington leading federal troops in to put the insurrection down.

I happen to have some knowledge of that one as a consequence of one of farmers taken by those federal troops was a many great grandpappy with an empty unused still that he figured he wasn't about to pay not tax on. At that time alcohol was money for these folks, cash was unheard of thus property was at risk without the benefit of apportionment to put the state between the Feds and the individuals at risk.

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 actoin 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.

[jpsb]

I'll take just about anything to get away from the income tax, it takes me months to figure my damn tax bill and I am a little guy, can't imagine the headache the big guys go thru. Sales tax means no paper work, I love it.

[Misplaced Texan]

http://www.apttax.com/

[jpsb]

hmmm, thanks for the ping, have to think about that one.

[groanup]

From your link:

Every bank, brokerage, or other financial account established by a person, corporation or other taxable organization will pay 0.3% on ALL funds moving IN OR OUT of that account.

I don't see how that would work. Some days the same 1 million dollars is transferrred three or four times. That's 9-12 thousand in taxes in one day. An annual tax rate of over 200%!!

[rwrcpa1]

We're not going to have to have the tax exclusive vs. tax inclusive lesson again, are we? Haven't you learned anything, yet?