Posted on 04/16/2003 7:28:39 AM PDT by George Frm Br00klyn Park
WorldNetDaily / Commentary
Shock and awe not only for Iraqis
Posted: April 16, 2003
1:00 a.m. Eastern
By Joan Veon
© 2003 WorldNetDaily.com
While jubilant Americans can't help but be fixated on "revolutionary" military operations they have witnessed on television for the past two weeks – called "Shock and Awe" – most are not aware that Americans are about to receive their own economic "Shock and Awe."
Many forget that while Rome burned, Nero was busy deflecting attention away from the real center of action. For example, the front page of the March 8 Washington Post featured a huge picture showing the burning of Baghdad with all but 5 percent of the front page devoted to the war in Iraq. However, at the bottom was the "bunker buster" which will shatter our own field of dreams here in America.
While the house voted well past midnight several weeks ago to approve the full tax plan of $726 billion, the Senate cut it by half when they voted several days later. While you may think this is not a sure thing, a recent editorial, entitled "Lay off the Tax Candy," in the Washington Post explained the deceptive game now being played. They said that there is some fine print in the Senate version that provides for some fancy footwork which gives them the ability to vote for the full amount, while making it look like they are against it.
Unfortunately, our government has not really made clear what this tax law is all about. From the extensive research I have done, I consider this proposal to be the most heinous change as it will destroy the ability of the middle class to sustain their economic power while enhancing the upper classes.
If enacted, this legislation, will deliver the final blow to the ability of "Joe and Jane Average" to get ahead. It should be pointed out that its title is a misnomer. This plan will not stimulate the economy but will cause much larger deficits, which will be borne by Americans as a result of the war, which is being waged.
Recently at the G7 finance ministers meeting, Secretary Snow, who likes to snow people, basically said that this increased deficit spending could be seen as a type of "capital spending" that most companies do when they want to expand. If it does not work, it is not the shareholder who has lost out, it is the entire populace of America. After the $4 to 6 trillion Nasdaq crash, most Americans who suffered any type of substantial loss are not looking to the market for answers.
The proposed legislation will, instead, change the entire tax code of America from a tax on income to a tax on consumption over a 10-year period. At this point in history, we are the only developed country not to have this form of taxation – which means Bush is globalizing our tax laws. In other words, he is harmonizing our tax laws and system to conform to what the major European industrial countries have. In my opinion, this basically will set the platform for a global IRS. By the way, the United Nations has been working on these kinds of ideas for the last 30 years.
Under this VAT (value-added tax), every time a purchase is made, there will be up to a possible 27 percent tax on it. This tax could replace the tax on income, making only consumption taxable while all forms of income are tax-free. There are some countries that have a value-added tax plus a tax on income while America is the only country without a VAT, but has a tax on income.
For those who have enough savings to live off of their income, this is a windfall, but for those who have only debt with little or no savings, this will create a financial burden equal to the Israelites having to make bricks without straw.
At the heart of this plan is the elimination of tax on corporate dividends. Again, if you obtain your living from stock dividends, this will be like going to heaven. No tax on income – only a tax on what you buy. Let's look at three different sets of individuals.
First we have Old Money Harry. He has never had to have a real job because he gets his living from the family trust. All of the family assets – the fabulous house, the cars, the summer homes, the yacht, the Mercedes and Rolls are held by the family trust, along with title to three large commercial pieces of real estate. Harry made several killings buying and selling real estate because the gains were tax-free since they were inside the family trust. The only downside is that the income from the trust is taxed.
However, under the proposal to reduce tax brackets – which is necessary in order to make the rates flat – from 38 percent to 21 percent, it won't hurt as much. Harry will have 17 percent more to spend. Only what you buy will be taxed – however, if you have it in a trust, no tax. Old Money Harry will achieve growth unsurpassed under the proposed tax-stimulus plan, just like the Kennedys, the Rockefellers, the Mellons and anyone else with this arrangement.
Next are John and Jane Middleclass. Both have reasonably good jobs with attractive incomes. They both have advanced degrees and live in the "executive home" to match their rising social status. They lease a Lexus and Jaguar and think nothing of packing up and going to Vale or to the Bahamas at a moment's notice. They have re-financed the house several times to add a new wing, exceptional landscaping and a pool.
While they know they are basically spending everything they are bringing in, they rationalize by thinking about the rising equity in their home and how much they will be able to cash out when they retire. Unfortunately their 401ks got zapped during the NASDAQ crash.
Donnie and Susie Squeeze are 25 years old. Donnie served in the military and works as a mechanic for the local Honda dealer. They have three small children and Susie works part-time at the local grocery store. They are saving for a down payment on a home and hope to send their kids to college if they can afford it. Right now they are just barely making ends meet.
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In order to explain the proposed tax stimulus program, let us take a look at who will come out like a bandit. Old Money Harry will be able to double his assets because he has the right tools: a pile of money and a trust. He will basically pay very little tax considering his income and assets. The stock dividends will be tax free, and other sources of income may be tax free, depending on if he takes advantage of the new Lifetime Savings Accounts.
Joe and Jane Middleclass will experience some drop in tax on income. However, once the proposed stealth tax is in full force, they probably will not have any tax break from the mortgage interest expense because it had to be sacrificed in order to pay for the other parts of the tax package. Since they have no savings outside of their 401ks, they won't have any benefit from the tax-free sources of income.
But because they like to spend, they will pay 21 to 27 percent every time they make a purchase. There is no doubt their spending habits will change. If the economy tanks and one of them gets laid off, they might have to sell the house. If the economy is not doing well, who will buy their house and at what price?
Donnie and Susie Squeeze are about to be squished. Their tax bracket will have to rise in order to help pay for the new tax law, but since they have very little savings they really won't feel the benefit of tax free dividends and investment income. Since they are still accumulating, every time they buy a car, a dishwasher, etc., they will pay a hefty consumption tax.
Unfortunately, the thought of buying a house might be out of the picture since it too will have a 21 to 27 percent tax. Depending on whether the U.S. can stimulate the economy enough to pay for the war, they may be on the hook for the cost of war.
Zon: "The company that chose not to drop their price by 25% would be out-competed by the companies that did lower their prices. It's just that simple."
Z, Or when the company cuts it's prices not because of "choice", but because of the necessity to "compete", they still go out of business.
I already covered that in my last response to you. All the companies that produce the same generic product get a cost savings of 25% with the NRST. All the companies that make the same generic product could drop their prices by 25% and remain competitive and make the same amount of profit. Your argument was refuted in my last post and now again in this post. Your argument that one company has a 25% reduced price advantage that the other companies don't is false. If you chose to claim an inability of adequate reading comprehension -- despite the clear and simple explanation I gave in my last response to you and now this response -- all I can say is so be it, and a quote from Mark Twain: "It is better to sit in silence and be thought a fool than to open ones mouth and remove all doubt."
And, as I wrote before, the remaining company at that point RAISES prices to recoop their losses. when competition is eliminated, that is the way it works. "What the market will bear".
I'll repeat what I said in slightly different wording: The 25% cost savings that company K passed on to consumers by reducing it's prices 25%, companies X, Y, and Z -- all three of them -- also get a 25% cost savings and can reduce their prices by 25% to match company K's prices. All four companies would be making the same profit before they received the 25% cost savings and after all four companies pass their cost saving on to the consumers. All four companies are making the same profit as before the cost savings.
"What you been smokin'?" was began by the "I want some of what you and the author are smoking." comment by EEE.
As I said in my last response: those types of comments/tactics tend to detract form the writers arguments and tend to make it appear as though the writer is using the tactic because their arguments don't hold up. That you chose to follow somebody else's lead it is no wonder that you didn't think for yourself of what the implication would be for you to do the same. Many followers are in same blind predicament. You're way out of your league in this discussion. Still, I encourage you to correct your errors because even if you refuse to, you're sill a useful juxtaposition to fully integrated honesty. It makes no difference to me how you chose to present yourself -- it's your credibility, not mine.
"Godgov" is an entity worshipped by MANY. Some call "him" "Big Brother" or some "Big Mama". I think you may recognize him/her.
What you speak of is a follower's mentality. As I pointed out and Taxman emphasized in his 81 post, the primary issue with just tax reform is to stop the government from pointing a gun at taxpayer's head (threaten with imprisonment and fines) to disclose how much income they make -- it's none of the government's business to invade people's privacy as the flat income tax does. My take on the limits of government are as follows, which BTW, completely refutes your implication that I worship godgov.
The following should be Amended to the constitution and adhered to with swift priority.
| * The purpose of conscious life is to live happily. * The function of government is to guarantee those conditions that let individuals fulfill their purpose. Those conditions can be guaranteed through a universal constitution that forbids the use of initiatory force, fraud, or coercion by any person or group against any individual. *** No person, group of persons, or government shall initiate force, threat of force, or fraud against any individual's self or property. Article 2 Force shall be morally and legally used only in self-defense against those who violate Article 1. Article 3 No exceptions shall exist for Articles 1 and 2. |
The above is from: http://www.neo-tech.com/pax-b1/a1.php
* * *
What do you get in return for your tax dollars?
Introduction
Voting for the lesser of evils always begets evil. How can so many people thinking they're right be so wrong?
Before voting for a politician make sure that they address Issue 101. Demand that of media outlets too.
Issue 101 -- The House of Cards
How is it that people and society in general have prospered and increased their well being for decades yet the politicians and bureaucrats say we must have another 3,000 laws and regulations each year on top of the 100,000+ laws already on the books... That without them people and society face "disaster". People and society have done quite well without next year's 3,000 new federal laws and regulations. Why all of a sudden can people and society not continue to do quite well without them? The fact is, they'd be better off without 99% of them.
So who really benefits from 3,000 new laws and regulations each year? -- not to mention state laws and regulations. Politicians and bureaucrats. They create boogieman problems and with a complicit media towing their boogieman problems cast a net of false fear and unwarranted despair in people.
Quite literally, they create problems where none exist. They're sick in that they chose to frighten people and foist false despair on them and do that to collect their unearned paychecks. Their job security is predicated on deceiving as many people as possible.
It cost more than just two trillion dollars a year to fund government abuse. That abuse hinders people's development, especially children being indoctrinated rather than educated, harms the economy and is largely responsible for causing false booms and reality-adjusting bust cycles in markets.
Flushing that money down the toilet -- save for military defense spending -- would be better for individuals, their families and society. That's a different way of saying, can't we just pay congress to stay home and not leave their houses. Surely we'd be better off. Politicians and bureaucrats are sick and need your help.
Fully integrated honesty is key. That we have the government we have -- delivered by both Democrats and Republicans -- that has gone so far off course from the government the founders created, is a product of irrationality and dishonesty. Changing the laws via the system is almost completely useless. Politicians create dozens of unconstitutional laws before even considering repealing just one unconstitutional law.
That is not a system -- it's a quagmire of deception, irrationality, fraud and abuse.
Politics is not the solution -- politics is the problem.
Who are the parasites?
Who are the producers?
Ostracizing the parasitical value destroyers
Praise the value producers
Step one for helping politicians and bureaucrats:
Get your head out of their sandbox.
Step two: Demand that they address Issue 101. Do the same with the media.
Step three: Ostracize government officials that fail to honestly address Issue 101. Do the same with the media.
Step four: Champion science and business communities -- often under relentless attack by the government. For they create jobs, necessities, luxuries and ever greater advancements that support human life, family and society.
Taxman: You are so wrong, George. The NRST will cause a huge increase for all Americans -- the poor will get richer and the rich will get richer.
Your musings could have been written my Marx and Engels, and may well have been, for all I know. You ought not to plagarize them, George, without attribution!
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O'k, Let's say that a person makes 100 million dollars with investment income only. Under the NRST, that person would pay taxes only on the things they need to buy. As mentioned in the article, if the object bought was a "trust" item, not even then. So, say that person spends $10 million just to get by {they already have most essentials no doubt}, at 21% they would pay $2,100,000 to the feds. If, with no deductions and/or exemptions, at 10% under the FIT {Flat Income Tax}, they would pay $10 million.If a person makes $100,000, and spent $60,000 they would pay NRST $12,600, and FIT $10,000. If a person made $10,000, and spent $10,000 plus their "rebate", they would pay NRST $2,100+, and FIT $1,000.
Now, tell me again how the incentive to keep the tax rate low is the same throughout income levels.
By the way, from reading on this thread, am I to understand that "all" taxpayers get the "rebate"??
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Guys, Y'all can call me anything you want. It doesn't change fact. The NRST AND the current flat income tax proposals are written by wealthy men to benefit wealthy men. A VAT would only hurt the lower classes more than the NRST is designed to do.I was good at math in school. Still am. Y'all were/are either bad, or are lieing through your collective teeth. The NRST proposal written of in this article, excluding the VAT, is designed to emasculate the middle class, bringing them into line with the "poor", and create the wealthy "philosopher kings" of Plato's "Republic" writ large that was the former{?} U.S.S.R. that most of of you call "communist". "Union of Soviet Socialist Republics" fits well to what the U.S.S.R. was{?}, but never "communist". Peace and love, George.
NOP, Where'd you come up with thatmistaken idea? Peace and love, George.
"Perhaps Donnie and Suzie should buy a two-year lease return instead of a new car."........"Automakers would likely have to lower the price of new cars to remain competitive.
Excuse me, but where does it make sense to stretch yourself such that you're spending everything you make? Doesn't anyone else think that's imprudent, dangerous even? The FairTax encourages saving and investing.
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WC, Just more social engineering in another tax code. Socialism in a word. And, due to the "unintended{?} consequences} of most social engineering, the prices of godgov's "choice" things that people might buy would necessarily go up due to the first rule of economics. supply and demand. Of course, godgov will probably step in and control those increases. Folks are getting all over me about "what might happen", while informing me of things that might happenunder their favored plan. Hilarious. Peace and love, George.
Taxman:
I do not believe it is anybody's business how much money I or anyone else makes, particulary some government pogue in the IRS!
The issue is a FReedom issue, George, and all other issues re: fundamental tax reform are subservient!
To: JohnGalt
The black market would shrink under the NRST. Think it all the way through.
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Bigun:
A flat tax on income with no deductions and/or exemptions would have EVERYBODY interested in keeping the percentage low, and thus government smaller. EVERYBODY covers a whole lot of territory George! Would that include the drug dealer who made $300K selling PCP laced toke to our kids down on the corner George? Or the back room poker player, or the prostitute, or the...? All have $0 legal income you know. You actually believe they are going to run to the taxman and ask him how much do I owe on the $300K I made last year selling dope? If so I got some swamp land over in the Arabian desert I need to sell and you seem like a GOOD candidate for the purchase!
They WOULD pay under the NRST when he bought their gold chains and Mercedes however now wouldn't they?
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Guys, Please see post 99 on the differences between taxation between earnings classes as you seemed to have missed it in the well written article by Joan. Do any of you really think{?} that those making millions of dollars to encourage lawmaker, and lawmakers themselves, while sitting in their dens drinking scotch, bourbon, cognac, brandy, or their favorite wine will have as much incentive to keep the NRST rate low as does Joe and Jane "Sixpack" who spend their every dollar just to get by?
The blackmarket would not be curtailed unless godgov somehow knew how much that "drug dealer" earned in order to compare it to his expenditures. The "$300k" paid to the dealer to buy product would still not be taxed. Perhaps, we should adopt the "Smart Card' as the only way to purchase rather than cash as many have proposed? Why is it anyone's "right" to know what I buy, and not what I make?
So far, the only verifiable facts as to the effect on different classes has been on taxes that must be paid under the NRST, and my comparison with an FIT to the same levels of earners. ALL else has been conjecture, yet I am assailed for my "fears of what might be". This thead gets funnier by the posting. Peace and love, George.
Ns, On the first part, I agree. But getting rid of ALL deductions and/or exemptions would be a BIG beginning, and elimination the progressive aspect would do the rest to make it a good system.
But when people are devising a AND enacting a tax system that is DESIGNED to benefit the wealthy, while at the same time destroying the opportunity for the "lower" classes to rise to wealth as the NRST does, the "war" to implement socialism has already begun. From that point, it MUST be fought. Even though it will have little if any affect on me. I've already "seen the elephant". Peace and love, George.
This line continues to go on without explanation.
The fact is, in order for a price to be reduced 20% as a result of reduced taxes ALL of the stages of production, including the retail/wholesale level would have to reduce their costs an overall average of 20%.
If as a result of eliminating income tax, a company pays a 33.33% tax on profit, their profit would have to be 60% before they could reduce their total cost 20%...
Do you know of any companies operating at 60% profit or 60% capital gains? Do you really think 20% of retail prices is a result of the "compliance costs" (no NST advocate can seem to accurately define)?
How long do you think your sales tax will go without exemptions or new excises on say SUV's, excessive energy consumption, you name the evil?
Come to think of it, the "fairtax" creates a NEW excise tax bureau.
SEC. 302. ADMINISTRATION OF OTHER FEDERAL TAXES.
(a) IN GENERAL- Section 7801 (relating to the authority of the Department of the Treasury) is amended by adding at the end the following:
`(d) EXCISE TAX BUREAU- There shall be in the Department of the Treasury an Excise Tax Bureau to administer those excise taxes not administered by the Bureau of Alcohol, Tobacco and Firearms.
What have you to say to the comparisons between the differences people will pay between the NRST, and the FIT {Flat Income Tax} I have written. Do you really think that the "benefits" of lower prices will make it so that as Taxman writes, "The rich will get richer, and the poor will get richer." I don't believe that for a New York second. Peace and love, George..
HA! LOL
Why in the world would you think this? This is nonsense. Did you mean to write this???
Prove me wrong.
"What's funny is you thinking you belong in any educated discussion of taxation."P, I am VERY proud of my "uneducated" status. I quit high school in the tenth grade and joined the Army. I haven't attained the "enlightenment" of "higher" education. LOL! Peace and love, George.
You are saying that no price reductions can occur unless an equivalent and corresponding price reduction is made at every production step.
According to that "logic", if an airline company was able to reduce its labor costs by $5 million, they would be unable to lower prices by an equivalent amount.
According to that "logic", a grocery store that found a cheaper farmer from whom to buy its groceries would not be able to reduce prices at all?
What are you talkin' about?
Ooopsie daisy lewis... you "forgot" that when income taxes are eliminated, it's eliminated for every entity. Hence all suppliers will be free of the income tax too.
What percentage of their overall ticket price is that $5 mil.?...Funny you mentioned airlines. American needed a labor reduction from the union to avert bankruptcy, since they got it do you think they'll be lowering their prices soon?
Are we going to talk dollar amounts or your idiotic 20%, 30%, 40% reductions in retail prices as a result of eliminating income taxes?
Steaming pile alert....
The elimination of income tax on profits is only ONE of the savings experienced by a business under the nrst. Don't "forget" that ALL suppliers have also experienced an elimination of THEIR income taxes too.
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