Repeal That Infernal Tax Code

Ronald Reagan said it back in 1983: "Our federal tax system is, in short, utterly impossible, utterly unjust and completely counterproductive . . . (it) reeks with injustice and is fundamentally un-American . . . it has earned a rebellion, and it's time we rebelled."

But what politician today would speak so eloquently, and all too accurately, about the country's irrational, insufferable, infernal Internal Revenue Code? (Except maybe for purely ceremonial purposes during an election year.)

Those in Congress who have made distinguished careers sneaking tricky little passages into the tax code to favor the special interests they represent, or just hope to solicit for a campaign donation, aren't interested in undoing this elaborate trap for the average taxpayer.

Why would politicians seriously challenge a system that so richly rewards them for their expertise in an arcane specialty?

Lest we forget, and so many do, that this republic was born of a tax revolt -- indeed, a mounting succession of them that climaxed in the Spririt of '76. Gosh, maybe that's why they call it the Tea Party.

But we the people long ago lost touch with our Revolutionary, and still revolutionary, roots. We've become inured to the injustice, inefficiency and general incomprehensibility of an encyclopedic tax code that by now passeth all understanding.

A whole priesthood of CPAs has multiplied to translate this gnostic creed, with all its daunting commandments and special dispensations.

Most of us don't object to paying our taxes. Living in the United States of America is not only a blessing but a great bargain. What we object to, or should, is how hard, how complicated, how expensive and sometimes just how plain hopeless it is to try to figure out how much we owe.

Awash in a sea of paper, or rather an ocean of electronic impulses in this internetted age, the American taxpayer needs . . .

But every sweeping new tax law Congress enacts -- always called a "reform" -- makes reform only more complicated and, if possible, more confusing. And makes the tax code longer. By now, it has grown as indecipherable as Hammurabi's. It might as well be on clay tablets.

Despite the perennial foofaraw in Washington about whether and how much to cut taxes, what really drives people nuts is the paperwork, the record keeping, the uncertainty.

Even if folks have an accountant, and by now an estimated 80 percent of us use a tax preparer, or at least some software, to figure out how much we owe, it's still a wearing process.

For the average American family, filling out a tax form has become like attacking a puzzle to which, often enough, there is no right answer. But we're all supposed to swear, on penalty of perjury, that we've done our best to find it.

What to do? Don't mend it, end it. Abolish the tax code and start all over. Think about it: Would anybody starting from scratch come up with a system so byzantine, so counterproductive, so insane as the one we're stuck with? Well, maybe Rube Goldberg.

Yes, kill the monster. Drive it through. Abolish the Internal Revenue Code and begin anew.

Put this thing out of its misery and the taxpayer's. By a date certain. Say, December 31, 2013. The government would have until then to come up with a simpler, fairer substitute.

At this point, it would be easier to junk the U.S. tax code and start all over than to fix it, and certainly to understand it.

To rephrase a thought from Dr. Johnson, nothing so wonderfully concentrates the mind as the prospect of having to file your taxes by midnight tonight. Or get an extension and so succeed only in prolonging the pain.

First kill the Internal Revenue Code, and the way to create a simpler, fairer system might become clearer to all those politicians, bureaucrats and other unimaginative types who now say it just can't be done. But it can be.

There is no time like the present to abolish the Internal Revenue Code. Which is pretty much what I wrote on Tax Day in 2004 and 2006 and 2008 ... and just about every year since. And now have said so again on this Tax Day.

Never. never, never, never give up. Don't believe those who can always be counted on to do nothing about even the longest-running outrages. Just abolish the old tax code and the politicians in Washington would have to devise a new, better, simpler one. From scratch. They'll want to get paid, won't they?

The graduate income tax and removal of apportionment were tied at the hip in history, that’s historical fact.

Because a pre-1913 direct tax with apportionment would lead to taxing the rich in one state far more than in other states, problems were created that had been unforseen. What happened in history is the wealthy class would change residency leaving states in more of a mess. To think of not allowing people to change residency would in effect turn the Constitution on its head.

The solution was to tax the rich uniformly in all states but then it became a problem of uniformity again because what is rich? In 1913 an annual income of $20,000 was considered very rich. Less than 2% of the population had such incomes. So was it right to tax those making $20,000 or more but those making $19,999 or less not at all? So they needed a graduated income tax so that “everyone would pay their fair share”. But they needed the 16th amendment to make such a scheme constitutional.

In the years following ratification of the 16th, the wealthy class reacted by changing the nature of their money from income to non-income or non-taxable. So began the long history of corruption that we see today like a metastacized cancer.

The wealthy class will always have a means to escape confiscatory taxation of their incomes. But they cannot escape a consumption tax if they live in the USA. They might purchase a $200,000 Mercedes in Germany or a million dollar yacht in the South Pacific but they must pay the import tax in the USA if they expect to use these large ticket items in the USA.

Income taxation will always gravitate to the middle and upper middle classes. And that is what has happened throughout history.

The solution to get everyone to pay their fair share is to go with the FairTax.

the flaw in the bill is that it only provides for a constitutional repleal. this leaves the citizens wide open for a LAW that imposes an income tax. It must be a repeal AND a prohibition like those states with constitutional prohibitions against sales tax.

This sentence makes no sense, in fact it does not even appear to be a sentence. The FairTax legislation ends (sunsets) if the 16th amendment is not repealed. Americans will have lived and enjoyed life under the FairTax and will then be told it will go away and the income tax will come back unless they take action to repeal the 16th.

Regardless a new monthly entitlement check as is proposed on the FairSCAM is a non-starter.

There are no entitlement checks in the FairTax legislation. You are hallucinating.

the proposal is DOA.

HR 25 FairTax legislation has more support in Congress than any other tax reform. That is a far cry from being DOA.

The FairTax grows every year as more and more people hear about it and become educated about how it works. The FairTax movement is undergoing an educational process campaign and that process can take many many years but once a critical mass is reached there is no turning back.

The income tax without apportionment took 52 years to finally become legal under the Constitution. The FairTax will not take that long.

Yes, it started that way and it always grows to a complex pile of indecipherable statutes via a midnight amendment process.

In other words a Flat Tax never stays flat for long because the Flat Tax needs the 16th Amendment to be legal and the 16th allows Congress to amend the tax code at will.

The USA has had 5 major tax reforms since 1913 and each reform has made the tax code ‘flatter’ and ‘simpler’. And it always grows back into a monster because Congress has the license (16th Amendment) to do what ever they want with taxes.

Since the last tax reform in 1986 under Ronald Reagan, there have been more than 20,000 amendments to the tax code and a quadrupling of the number of tax lobbyists in DC.

The revolving doors between Congress and the IRS, between IRS and tax lobbying firms, and between Congress and tax lobbying firms are used by persons that form the Praetorian Guard of the Washington establishment.

The battle over freedom comes down to about 50,000 of these contemporary Praetorian Guards plus their surrogates in the NY media against 144 million individual tax filers. If we get a critical mass of these 144 million to understand the FairTax and stand their ground against the naysayers, then we win hands down.

But the DC Praetorians will use their allies and surrogates in the NY media complex to paint us as radicals and bigots of the Tea Party variety. They will smear us so often that anyone watching who is not educated to the FairTax and who is not aware of what the NY media does to brainwash them, these watchers will have a prejudice against us.

But it only takes on average about 3000 FairTax activists in each Congressional district to turn the Congress member to the FairTax. So we need to keep adding to our ranks.

The good news is that once a person gets it, gets the FairTax, it does not leave them and they can’t think of anything else. But they can get frustrated with the pace of progress. I always tell them the Income Tax took 52 years to become legal and the FairTax has only been out there a little more than 10 years, and it won’t take near as long to get the FairTax passed.

> “You think that will remain uniform for any meaningful length of time? “

Do I think the FairTax will remain uniform? It must if it is to be constitutional. Because in the legislation for the FairTax (H.R.25), the proposed law has a provision that sunsets the FairTax if the 16th Amendment is not repealed within a certain time frame.

Here’s the essential idea to understand, the Constitution with the 16th Amendment repealed requires taxes to be uniform. So the answer is yes the FairTax will remain uniform or else it goes away. How does this happen you say?

To be clear the FairTax:
1. Abolishes the Income Tax code, scraps it altogether.
2. Requires a stake to be driven through the heart of the Income Tax by requiring the 16th Amendment to be repealed within a certain time frame.

This number 2 above guarantees the Income Tax never comes back without apportionment, and apportionment puts pressure to generate all manner of non-uniformities when used to collect income taxes, so it ain’t gonna ever happen because without the 16th, all taxes must be uniform or else they will be stricken from the code.

What 1 and 2 above mean is that Americans will be enjoying life under the FairTax and then be told that the FairTax will go away and the Income Tax will come back if the 16th Amendment is not repealed. So the pressure will be on to perform 2 above.

> “How then is it suddenly “sensible” for the feds to give a family of 4 $38,180 no strings attached? especially when anyone can work a high-paying job, and by operating exclusively in used goods and private sales pay no taxes regardless of income? How is this any different from the well-despised “redistributing the wealth”? “

The FairTax does not give a family of 4 (you are mistaken twice here, see below) the amount of $38,180. This amount is a consumption allowance based on purchasing essentials for living and is in fact the level at which FairTax federal taxation begins for this family structure.

First off your $38,180 applies to a family of six, a couple and 4 children:

http://www.fairtax.org/PDF/PrebateExplained2012.pdf

The rebate is $8,781 ($2,569 for each adult and $911 for each child).

Secondly, buying used goods is a good idea for frugal families and people when it makes sense. But we are not going to buy used light bulbs, or used detergent, or used oil etc. Are you going to buy a used car for the rest of your life? Who will be buying the new cars?

We will buy many many new things just as do now and the price is going to be about the same! Say what? Yes, the price is going to be about the same. Because all the taxes applied up and down supply and production chains get pushed out down to the end of the chain to the consumer of the product or service and that’s where the FairTax NRST is applied.

Thirdly, the FairTax Rebate is not an entitlement, it is a reimbursement of National Retail Sales Tax (NRST) paid based on a consumption allowance for living essentials. If this rebate is increased it must be the same increase for every person, the same for grandma on Social Security as for billionaire Warren Buffett. It must be uniform for all because the repeal of the 16th will not allow for different rates and rebates.

You see all we are doing with the FairTax is just making the whole process simpler and more transparent. And the political class don’t like transparency anymore than cock roaches welcome light.

With the FairTax, we are pushing all the supply chain taxes down to the end of the line and we are paying just about the same taxes that we pay today but don’t see. For example, your employer had to pay a matching amount of your social security and also had to pay federal corporate tax. These taxes form a part of the cost of doing business so prices are inflated by federal taxes at each step for each business in the supply chain. These are called the hidden embedded taxes and they form on average about 23% inclusive of the price of a product or service before reaching the consumer.

To give a simple example, I go to Home Depot to buy a 2 X 4 piece of wood. It sits on the shelf at $2. I go to the cash register and pay $2 for it and no state sales tax if I am in Oregon.

Under the Fair Tax I go to Home Depot to buy a 2 X 4 and it sits on the shelf at $1.54. I go to the cash register to purchase it and there is added $0.46 FairTax NRST to bring the total to $2.

Lastly, private sales. One of the great things about the FairTax from an enforcement point of view is that it is easy to sting people on either side of a sale. Because with the FairTax it takes two people to cheat whereas with the Income Tax it takes only one.

The bottomline is that the FairTax wins the debate on every point but it is opposed by the political class because it take away their power to tinker with code and social engineer things for us. It takes their power away to cause us trouble.

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