Posted on 09/17/2006 8:03:05 AM PDT by Principled
A Battlefield for Tax Reform
There are a few significant battlefields in the war for tax reform. One of them is Free Republic. What makes the Free Republic battlefield significant is that the debate is at the cutting edge. The debate on Free Republic is the most current and most knowledgeable. It is a year ahead of other significant battlefields (radio talk shows, political town-hall meetings, conversations among neighbors and coworkers.)
The trend on Free Republic with respect to tax reform is going to show up in the real world. Free Republic is a tiny segment of the world, albeit a more educated, more politically motivated, more affluent segment than most. Perhaps those are a few of the reasons that Free Republic predicts what will happen in the real world – the world of radio, newspapers, network television, and most importantly - elections.
The choices are
Keep the status quo and continue with our graduated income tax
Eliminate the income tax and implement a flat income tax (although this option has negligible support)
Eliminate the income tax and implement a national sales tax
There are no other options. We are going to have taxes. The only choice is deciding the best way to have them.
Whichever choice you prefer, one thing is clear. The opponents of tax reform on Free Republic will stop at nothing to protect the status quo. Here’s what’s happening on Free Republic (remember it’s a predictor of what will happen in the real world.)
Opponents of reform randomly select perceived problems, however insignificant, and say that’s the reason this reform cannot work. For example, attackers of HR 25 (the “Fair Tax”) have alternately said the rate is too high and then the rate is too low. Whatever seems to get traction is what they stick with. Is it no wonder the perception is that these anti-reformers are not being honest with the reason(s) they oppose the reform. This is why so many question the motives of the anti-reformers. What are they hiding?
The anti-reformers try to make the reform threads so unpleasant that people choose not to participate in them (what does this predict about the real world?)
An anti-reformer may be taking advantage of the positions he he was entrusted with by the site (modertor). By taking sides in threads, berating and belittling pro-nrst posters, by deleting threads, by locking threads, and by moving threads from news/ACTIVISM to “Bloggers and Personal” and to “Smokey Backroom”, the mod(s) in question are taking away from the greatest site on the internet. Sometimes, threads are moved to bloggers and then moved to SBR or vica versa.
Pro-nrst posters are suspended for things that don’t make sense. Anti nrst posters are not suspended for things that should require it - comes to mind the picture of a dog copulating with a pig with the comment “screw you pigdog”… “I found a picture of your parents”. Noteworthy is that the poster of said graphic and phrase were not suspended but rather the recipient of it was suspended for complaining about it.
What does this predict about the real world?
Suffice to say that the debate about tax reform is won by the reformers. The proof is that when educated about the three reform options, the general public chooses the nrst over 70% of the time.
The only question is whether the dishonesty of the anti-reformers will slow the progress of reform in the real world. This is NOT to say that all anti reformers are dishonest - but it is the dishonest ones who are tainting the others.
The good thing about the debate is that the nrst is the most thoroughly investigated alternative - each and every point is debated in complete detail. Problems have been identified and some changes have been made. That's a good thing. And as debate continues, the level of knowledge of any lurkers continues. As I said, I predict over 70% will choose the nrst.
Studies paid for by the FairTax organization. BTW, have those studies been released yet or are we still relying on the FairTaxers to accurately quote from the studies?
Third party reporting is accomplished when both parties of a transaction are required to report.
Except when the employer is actually the small business and his employees/partners looking to make a buck off evading both income and payroll taxes.
The point, not all income is reported among the worst offenders as determined by the IRS, those small business operating on cash both in regards its employees (pretending to be independant contractors to similarly evade/avoid taxes) and in regards itself.
Self reporting under self-employment and small business, where the biggest evasion problems lay, is non existent as regards the illegal trade and the cash underground.
There is no third party reporting anything where evasion of income and payroll taxes are concerned and where the big gains are to be had by those intent on evasion by simple failure to report at all.
The FairTax only requires that a report be made by the tax collector.
Yep at both ends of the business' operations, himself and his suppliers from whom he purchases taxfree.
That makes for a third independant party reporting that assures a clear track of monitoring of business required to collect the FairTax.
Those that pay taxes on products they buy are purchasing retail and are not required to collect taxes if they should resell there stuff. Products may only be taxed once under the retail sales tax system implemented under the FairTax legislation.
H.R.25Fair Tax Act of 2005 (Introduced in House)
`SEC. 1. PRINCIPLES OF INTERPRETATION.`(a) In General- Any court, the Secretary, and any sales tax administering authority shall consider the purposes of this subtitle (as set forth in subsection (b)) as the primary aid in statutory construction. `(b) Purposes- The purposes of this subtitle are as follows:
`(c) Secondary Aids to Statutory Construction- As a secondary aid in statutory construction, any court, the Secretary, and any sales tax administering authority shall consider--
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As pointed out earlier, a certified business is tracked not only through its own reporting of its sales, but also by reporting of its suppliers from whom he purchases tax exempt. This assures the capacity for close monitoring and audits by state tax administrators where discrepencies flag the need.
Where retail taxes have been paid by a reseller, (e.g. one who has no certification and not required to collect a the tax) there is no issue in the first place. The FairTax system is a tax once but only once system thus avoiding many of the pit falls of systems relying on taxing resale products for tax revenues.
There must first be an operable tax revenue bill such as the FairTax so that the removal of the 16th amendment and/or income taxation would proceed apace in a manner consistent with the laws of the country.
Getting the cart before the horse and destroying the income tax as you put forth would merely have Congress shooting themselves in the foot and cutting off government revenues as well. They would certainly be foolish to do that - and would undoubtedly lose their jobs on a wholesale basis if they were to let that happen since it makes no sense.
It's by far better to eliminate the income tax and its appurtenances and require its records destruction and THEN move on the eliminate the 16th and/or the constitutional prevention of income taxation in an orderly fashion and without chaos.
Studies paid for by the FairTax organization.
Yep, you expect government to pay for such or special interests intent on keeping the current system in place or supporting some other favorite version of taxreform?
Nah I rather doubt they are particularly interested in supporting actual studies that will always run against their own interests.
LOL That would be rather silly of them wouldn't it?
Most are more interested in policy papers about adhoc systems that are constructed for strawman arguments.
Of course for counter policy papers of pretend retail sales tax systems not actually introduced to Congress you can go several thinktanks and organizations that bitterly oppose retail sales tax systems and see what they have to say about the tax systems they construct for use as redherrings.
BTW, have those studies been released yet or are we still relying on the FairTaxers to accurately quote from the studies?
Actually they have been released long ago. They have also been linked to and provided on FR many times over the years for those actually interested in looking at the reports.
If you want access to any such report, merely contact AFFT and ask for a copy or contact the cited authors for such as many of your buddies have done, and as anyone can just by exercising the effort.
Dear pigdog,
"It is a logical fallacy since if unconstitutional there would be no income tax law and therefore no tax revenue."
Well, it's theoretically possible that it would be some other sort of fallacy, but it doesn't fall into the category of formal logical fallacies.
However, we've gone around this tree before. A constitutional amendment repealing the 16th Amendment could easily be written to provide for a date in the not-too-distant future when the authority to tax income would expire, providing the time needed to move from one system to another.
There is no reason that such an amendment couldn't say:
"This amendment will become effective two years from its adoption to the Constitution, during which time, the federal government may continue to impose and collect income taxes."
Or whatever is determined to be the right language.
"It's by far better to eliminate the income tax and its appurtenances and require its records destruction and THEN move on the eliminate the 16th and/or the constitutional prevention of income taxation in an orderly fashion and without chaos."
Nope. That's demonstrably false. If the NRST is passed, the 16th Amendment will not be repealed. Why buy the cow when the milk is free?
sitetest
Your entire post, when stripped of the irrelevant comments is that I have not commissioned a study to back up my thinking, and that the FairTax organization has done such studies. But there are a number of economists and studies who have said the same things I am saying. So, your point is wrong.
A constitutional amendment repealing the 16th Amendment could easily be written to provide for a date in the not-too-distant future when the authority to tax income would expire, providing the time needed to move from one system to another.
Such is already on the tracks where are is the grassroots support to make it happen? Just as importantly where is the Congressional support for it to happen.
H.J.RES.14
http://thomas.loc.gov/cgi-bin/bdquery/z?d109:h.j.res.00014:
Title: Proposing an amendment to the Constitution of the United States relative to abolishing personal income, estate, and gift taxes and prohibiting the United States Government from engaging in business in competition with its citizens.
Sponsor: Rep Paul, Ron [TX-14] (introduced 1/26/2005) Cosponsors (2)
Latest Major Action: 3/2/2005 Referred to House subcommittee. Status: Referred to the Subcommittee on the Constitution.
We have had proposals for such amendments to the constitution nearly continuously since the ratification of the 16th amendment and the first income tax enacted under it. It is interesting that no support to see the deed done arises in Congress as long as the income tax system has been in place.
I submit, you will not see the prohibition of the taxation of income until such time as the system itself is rendered obsolete by going to taxation of consumption as the viable alternative in place.
Nearly a century of experience under the income tax system bears evidence to that conclusion.
You have here a catch 22 situation, until the statutory infrastructure of the income/payroll tax is totally replaced by an alternative viable system of taxation you will not see the prohibition of the income tax.
The FairTax NRST is the first necessary step to the eventual prohibition of income taxes altogether. The other route of waiting for proposal and ratification of an amendment to prohibit income taxes is clearly no more than a pipe dream as history totally confirms.
Such a bill would be some strange combination of repeal and revenue bill as well as well as more likely that not a spending bill since elements of "transition" would be thrown in also.
It would be a catastrophic failure in accomplishing the purpose you claim for it.
Much better would be to pass the FairTax as presently constituted eliminating the IRS and its appurtenances and then (or concurrently) have a cleaner separate repeal bill (either with or without the provision to make income taxation unconstitutional). In this way, such an amendment would stand an excellent chance of passing Congress and being sufficiently ratified to make the amendment effective all the while providing an operational (and quite effective) system of taxation.
Done this way, the passage of the FairTax not only provides some protection against any short term (7 year) attempts to re-institute an income tax, but it also makes the repeal of the income tax easier since it would now be an anachronism much like the Prohibition amendment - which you'll note did not make it unconstitutional to prohibit alcohol again ... but it's certainly not likely to happen in our lifetimes.
It would be the same way with the FairTax and the income tax; once gone the citizens will have no desire to return to it and that will be amply clear to the politicians since with enough votes to pass the FairTax into law, there will certainly be enough to defeat any reinstatement of income taxes. But if banned by constitutional amendment, that's even better provided its done the reasonable way.
The FairTax needs to realize that they need to include the 16th Amendment as part of what they are selling, and not some separate thing to be handled later like they do with spending control, end entitlement reform.
You claim to want to reform the way taxes are collected, why would you only want to do a partial job and leave the heavy lifting of the 16th to others? Many FairTaxers claim that they would not support the FairTax if the 16th is left standing.
That is another big plus for doing it this way, rather than you fooling people that it will be accomplished later. Because it is very difficult to get an amendment to the Constitution ratified. Much more difficult than passing a tax bill.
You are merely making excuses because you know that a new Constitutional amendment isn't going to happen. Three-quarters is a lot of states...38 to be exact. And most states have income taxes of their own to contend with.
I'll guarantee both of those right now.
I am not making an accusation, I am just acting for a couple of clarifications:
Are you paid by any FairTax organization for any of your activities related to promotion of the FairTax, or for any of your expenses related to promotion of the FairTax, including posting on Free Republic and other political websites?
Would you tell us if you were?
No it isn't revenue neutral.
First, they have to collect the money to pay the socialist prebate entitlement, that is a significant increase in the government collections.
Second, they have to increase the amount of money collected so they can pay the FairTax, this hasn't yet been acknowledged by the FairTax organizations, but it is true nonetheless.
So, the government collections under the FairTax are significantly larger than todays collections. Hence, it's not revenue neutral.
It will certainly appear huge when you purchase the $250,000 home and they ask you for $350,000 or more to pay for it.
"... people would have to pay higher taxes to their state and local govenrments too ..."
Not so since state and local governments now pay federal taxes in the form of what they pay their employees and their suppliers. In other words, the governments tax the,selves presently and would continue to do so. Trying to remove this amount of taxation makes no sense since the income tax presently taxes government - and the various flat tax proposals also. Not doing so under the FairTax would amount to giving government a tax-free advantage to compete against private firms - something that no one should wish to see.
Your post is simply untrue, under the FairTax the costs of state and local government is going to go up substantially.
Things that they buy will have the FairTax (currently stated at 29.87% exclusive) added to them and remitted to the Federal government. Since pre-tax prices are not going down anywhere near that much (more like 8% MAX), this will mean the cost of aggregate purchases will go up by at least 19-20%, and probably more since the tax rate is artificially low.
And since you claim government employees keep their same take-home salaries, these will have the FairTax added and the only savings is the removal of employer half FICA, so cost of salaries (non teacher) will also go up at least 20%.
This extra 20% will have to be raised through new additional state and local taxation as a result of the general FairTax-induced price inflation.
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