CAVUTO REPORTS THAT BUSH CONSIDERING SCRAPPING THE IRS CODE!!!

Fox News Channel | November 6, 2002 | n/a

[Tree of Liberty]

Neil Cavuto just interviewed Mitchell E. Daniels, Jr., the director of the OMB, and Neil let it be known that he's hearing rumblings that Pres. Bush is considering a total re-write of the tax code and that SecTreas O'Neill is strongly pushing a national retail sales tax!

[carenot]

The 401(k), though, is VERY important. The more people invest, the more of a stake they have in fiscal conservaitsm, low taxes, and all of that.

I don't understand your thinking.

Are you saying that you don't want to lose your tax breaks? If so there would be no tax breaks with HR2525.

[ancient_geezer]

It is this very fact that Hamilton believes makes an excise the best kind of tax. It has a self-limiting feature.

Hamilton & others regarding taxes on commerce.

Alexander Hamilton, Federalist #12:

• "A nation cannot long exist without revenues. Destitute of this essential support, it must resign its independence, and sink into the degraded condition of a province. This is an extremity to which no government will of choice accede. Revenue, therefore, must be had at all events. In this country, if the principal part be not drawn from commerce, it must fall with oppressive weight upon land."

• "The ability of a country to pay taxes must always be proportioned, in a great degree, to the quantity of money in circulation, and to the celerity with which it circulates. Commerce, contributing to both these objects, must of necessity render the payment of taxes easier, and facilitate the requisite supplies to the treasury."

Alexander Hamilton, Federalist #21:

• 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. ... Impositions of this kind usually fall under the denomination of indirect taxes, and must for a long time constitute the chief part of the revenue raised in this country.

  Those of the direct kind, which principally relate to land and buildings, may admit of a rule of apportionment. Either the value of land, or the number of the people, may serve as a standard. The state of agriculture and the populousness of a country have been considered as nearly connected with each other. And, as a rule, for the purpose intended, numbers, in the view of simplicity and certainty, are entitled to a preference.

Hamilton, 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.

• When applied to this object, the saying is as just as it is witty
  that, "in political arithmetic, two and two do not always make four."

• If duties are too high, they lessen the consumption; the collection
  is eluded; and the product to the treasury is not so great as when
  they are confined within proper and moderate bounds.

• This forms a complete barrier against any material oppression of the
  citizens by taxes of this class, and is itself a natural limitation of
  the power of imposing them.

• Impositions of this kind usually fall under the denomination of indirect
  taxes, and must for a long time constitute the chief part of the revenue
  raised in this country."

Hamilton, Federalist #32:

• ``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.

Hamilton, Federalist #35:

"if the jurisdiction of the national government, in the article of revenue, should be restricted to particular objects, it would naturally occasion an undue proportion of the public burdens to fall upon those objects. Two evils would spring from this source: the oppression of particular branches of industry; and an unequal distribution of the taxes, as well among the several States as among the citizens of the same State."

"The maxim that the consumer is the payer, is so much oftener true than the reverse of the proposition, "

"When they are paid by the merchant they operate as an additional tax upon the importing State, whose citizens pay their proportion of them in the character of consumers. "

"Suppose, as has been contended for, the federal power of taxation were to be confined to duties on imports, it is evident that the government, for want of being able to command other resources, would frequently be tempted to extend these duties to an injurious excess. There are persons who imagine that they can never be carried to too great a length; since the higher they are, the more it is alleged they will tend to discourage an extravagant consumption, to produce a favorable balance of trade, and to promote domestic manufactures. But all extremes are pernicious in various ways. Exorbitant duties on imported articles would beget a general spirit of smuggling; which is always prejudicial to the fair trader, and eventually to the revenue itself: they tend to render other classes of the community tributary, in an improper degree, to the manufacturing classes, to whom they give a premature monopoly of the markets; they sometimes force industry out of its more natural channels into others in which it flows with less advantage; and in the last place, they oppress the merchant, who is often obliged to pay them himself without any retribution from the consumer. When the demand is equal to the quantity of goods at market, the consumer generally pays the duty; but when the markets happen to be overstocked, a great proportion falls upon the merchant, and sometimes not only exhausts his profits, but breaks in upon his capital."

Hamilton, Fedralist #30:

"The more intelligent adversaries of the new Constitution ...qualify ... by a distinction between what they call INTERNAL and EXTERNAL taxation. The former they would reserve to the State governments; the latter, which they explain into commercial imposts, or rather duties on imported articles, they declare themselves willing to concede to the federal head. This distinction, however, would violate the maxim of good sense and sound policy, which dictates that every POWER ought to be in proportion to its OBJECT; and would still leave the general government in a kind of tutelage to the State governments, inconsistent with every idea of vigor or efficiency. Who can pretend that commercial imposts are, or would be, alone equal to the present and future exigencies of the Union? Taking into the account the existing debt, foreign and domestic, upon any plan of extinguishment which a man moderately impressed with the importance of public justice and public credit could approve, in addition to the establishments which all parties will acknowledge to be necessary, we could not reasonably flatter ourselves, that this resource alone, upon the most improved scale, would even suffice for its present necessities.

"To say that deficiencies may be provided for by requisitions upon the States, is on the one hand to acknowledge that this system cannot be depended upon, and on the other hand to depend upon it for every thing beyond a certain limit. "

Hamilton, Federalist #31:

"A government ought to contain in itself every power requisite to the full accomplishment of the objects committed to its care, and to the complete execution of the trusts for which it is responsible, free from every other control but a regard to the public good and to the sense of the people."

"As revenue is the essential engine by which the means of answering the national exigencies must be procured, the power of procuring that article in its full extent must necessarily be comprehended in that of providing for those exigencies."

"As theory and practice conspire to prove that the power of procuring revenue is unavailing when exercised over the States in their collective capacities, the federal government must of necessity be invested with an unqualified power of taxation in the ordinary modes. "

Hamilton, Federalist #35:

"The maxim that the consumer is the payer, is so much oftener true than the reverse of the proposition, that it is far more equitable that the duties on imports should go into a common stock, than that they should redound to the exclusive benefit of the importing States. But it is not so generally true as to render it equitable, that those duties should form the only national fund. When they are paid by the merchant they operate as an additional tax upon the importing State, whose citizens pay their proportion of them in the character of consumers. In this view they are productive of inequality among the States; which inequality would be increased with the increased extent of the duties. The confinement of the national revenues to this species of imposts would be attended with inequality, from a different cause, between the manufacturing and the non-manufacturing States."

James Wilson, Pennsylvania Ratifying Convention
4 Dec. 1787 Elliot 2:466--68

• No man is obliged to consume more than he pleases, and each buys in proportion only to his consumption. The price of the commodity is blended with the tax, and the person is often not sensible of the payment But would it have been proper to rest the matter there? Suppose this fund should not prove sufficient; ought the public debts to remain unpaid, or the exigencies of government be left unprovided for? should our tranquillity be exposed to the assaults of foreign enemies, or violence among ourselves, because the objects of commerce may not furnish a sufficient revenue to secure tham all? Certainly, Congress should possess the power of raising revenue from their constituents, for the purpose mentioned in the 8th section of the 1st article; that is, "to pay the debts and provide for the common defence and general welfare of the United States."

The Records of the Federal Convention of 1787
(Farrand's Records)
James Mchenry before the Maryland House of Delegates.
Maryland Novr. 29th 1787--
Appendix A, CXLVIa, page 149, S9.

"Convention have also provided against any direct or Capitation Tax but according to an equal proportion among the respective States: This was thought a necessary precaution though it was the idea of every one that government would seldom have recourse to direct Taxation, and that the objects of Commerce would be more than Sufficient to answer the common exigencies of State and should further supplies be necessary, the power of Congress would not be exercised while the respective States would raise those supplies in any other manner more suitable to their own inclinations --"

[SeeRushToldU_So]

PLEASE PLEASE!!!!!!!!!!!!!!!!

[jejones]

I fervently hope that's true.

[AmericanDave]

Many current sales taxes expempt tax on food and clothing. This helps the poor to cover necessities before paying any taxes.........

[Southack]

"We have two years, at a minimum. Let's push our agenda, including this. I am a HUGE fan of this idea."

As am I, but let's pluck the low hanging fruit (e.g. judges, SCOTUS, double-tax on dividends, death tax, et al) prior to committing everything that we've got - on going for the crown jewel.

That being said, surely we can make a play for this in the next two years. The first obstacle, of course, will be finding a way to neutralize the opposition of real-estate agents, who will view our push to eliminate the income tax as an attack on their sacred cow mortgage interest tax deduction (I kid you not).

This would be the most incredible coup if we could pull it off! This is doable!

[WhyisaTexasgirlinPA]

PLEASE PLEASE!!!!!!!!!!!!!!!!

Rush, you have to say that three times, while clicking your ruby red slippers together........

[Hostage]

You think I can rest after reading what you linked me to?

Excerpt:

"The Treasury Department is also formulating a series of options to simplify or overhaul the corporate and personal income tax system. And Social Security reform advocates insist they have been promised an all-out push from the White House to enact proposals that would divert some of the Social Security payroll tax into personal accounts that could be invested in the stock market."

And if that isn't enough, here's another:

"Ueland said Republicans are waiting for Bush to signal that they should move forward with a package of tax cuts aimed at investors, including proposals increasing the amount of stock losses that can be deducted from income taxes, raising the contribution limit on retirement accounts and cutting or eliminating taxes on stock dividends."

and yet another:

"Bush has also promised proposals to curb lawsuits, especially malpractice suits, and some kind of effort to cut back business regulations, possibly on Superfund environmental cleanups."

Is this all a dream or what??????

[AmericanDave]

You may be thinking of the evidence that it was not properly ratified, and therefore not legal. Some states ratified the constitutional amendment with changes added, and that is not a legal way to ratify; but their ratification vote was entered anyway, improperly, thus not legaly....

[carenot]

Hey that's fine with me. I know that most supporters of the NRST want the tax to apply to everything, but I think it would make sense to exclude basic food items and housing.

Nope. What is basic food? What is basic housing?

Fair Tax figures the poor folks spend all their money on food and housing. That is why the prebate.

[ancient_geezer]

IMHO, enacting a 30% tax on virtually everything makes the tax unavoidable taking it out the class of excises.

The definition of the terms "excise" and "duty" of the time of the founders, and is the controlling factor of the consitutional meaning of those terms , is not so limited:

A LAW DICTIONARY
by John Bouvier, Revised Sixth Edition, 1856:
DUTIES. In its most enlarged sense, this word is nearly equivalent to taxes, embracing all impositions or charges levied on persons or things;

A LAW DICTIONARY
by John Bouvier, Revised Sixth Edition, 1856:
EXCISES. This word is used to signify an inland imposition, paid sometimes upon the consumption of the commodity, and frequently upon the retail sale

And the pre income tax Supreme court doesn't seem to agree with your restriction either:

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

" It is true that in the income tax cases the theory of certain economists by which direct and indirect taxes are classified with reference to the ability to shift the same was adverted to. But this disputable theory was not the basis of the conclusion of the court. "

"The constitutional meaning of the word direct was the matter decided. Considering that the constitutional rule of apportionment had its origin in the purpose to prevent taxes on persons solely because of their general ownership of property from being levied by any other rule than that of apportionment, two things were decided by the court: First, that no sound distinction existed between a tax levied on a person solely because of his general ownership of real property, and the same tax imposed solely because of his general ownership of personal property. Secondly, that the tax on the income derived from such property, real or personal, was the legal equivalent of a direct tax on the property from which said income was derived, and hence must be apportioned." These conclusions, however, lend no support to the contention that it was decided that duties, imposts and excises which are not the essential equivalent of a tax on property generally, real or personal, solely because of its ownership, must be converted into direct taxes, because it is conceived that it would be demonstrated by a close analysis that they could not be shifted from the person upon whom they first fall. The proposition now relied upon was considered and refuted in Nicol v. Ames, 173 U.S. 509 , 43 L. ed. 786, 19 Sup. Ct. Rep. 522, where the court said ( p. 515, L. ed. p. 791, Sup. Ct. Rep. p. 525):

[AdamSelene235]

double-tax on dividends,

I concluded this would happen about 6 months ago and started buying up div bearing stocks....Obviously they will spike when double taxation is removed...Its just such an *obvious* problem that could be easily fixed...Corporate taxes strike me as equally obvious, but I'm not getting my hopes up...Actually, I am getting my hopes up...If disappointed, Lord knows where on the political spectrum I'll land..

The first obstacle, of course, will be finding a way to neutralize the opposition of real-estate agents, who will view our push to eliminate the income tax as an attack on their sacred cow mortgage interest tax deduction (I kid you not).

Dead on. In fact, I made the argument that this artificial incentive for homeownership actually distorts the price of homes back during our GSE slugfest.

This would be the most incredible coup if we could pull it off! This is doable!

Its not just doable, its dammitall neccesary!

[carenot]

I think that the advantages of the NRST would only be temporary. Within a few years, it would be a convoluted mess with income-testing, etc.

No one will know your income under the Fair Tax. Everyone gets the prebate. No matter how rich you are.

[AmericanDave]

There would be no tax on "barted or traded used goods". There would be no income tax on your local church, and therefore the minister could speak his mind freely about the goings on of government.... Are you getting the light-bulb?

[weikel]

Exclude food, medicine, housing and rent under a certain amount( indexed for inflation I don't think luxury houses or apartments should be excluded), most clothing( expensive designer stuff no), and medicine.

[Exigence]

If Bush got this done, he would go on Mount Rushmore.

I'm scared of heights, but for this, I'd climb up there and help carve the stone.

[carenot]

How does the NRST provide for social security collection?

It is included in the NRST.

[ncweaver]

Citizens For a Sound Economy has been out front on this issue and has sent out bumper stickers. Check out:
http://www.scrapthecode.org/

[weikel]

The NRST is not a VAT( a VAT is a horrible tax worse than the income tax) the NRST is only levied at the retail level.

[dittomom]

Yup. I've been on their bandwagon since the days of the Armey-Tauzin townhall/debates on the flat tax vs. NRST