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.
Communism. Very conservative.
PCJ, FINALLY!! Someone is waking up. It is DESIGNED to do JUST that by those making laws. The "fair" tax simply accelerates the process, and INSURES that no more upstarts such as Perot and Gates can horn into the gravy train. Whereas, a flat tax on income with NO deductions and/or exemptions would allow for ALL citizens to be productive with a chance for advancement due to high productivity equally. It is NOT "if" it will happen as Joan writes. It is a statistical certainty. Simply read the exapmles she gives. It can't be denied. Peace and love, George.
I’m highly disappointed in WND. I expect a lot more from them.
I expected more honesty from them too. This isn't the first time they've let a writer, in this case Joan Veon, get the best of them.
Replacing the graduated/progressive income tax with a consumption tax such as the NRST would set off a chain reaction of benefits.
1. Boom the economy because productivity is not taxed; no tax on profits or hidden taxes/fees.
2. IRS threats and coercion eliminated and replaced with, "if you don't want to pay the tax, don't buy the item."
3. 20% to 30% decrease in retail prices that facilitates spending and partially offsets the retail tax. Which will also...
Cause U.S. made products more competitive when sold within the USA against foreign imports.
Cause U.S. made products more competitive in the World market.
4. People will know how much leviathan government is really costing them, resulting in...
5. Shrinking government to it's constitutional function to protect synonymous private-property rights and individual rights from domestic and foreign criminals while upholding the sanctity of private contracts.
6. Creates jobs in the USA.
7. Freedom in United States leads to other countries doing similar or risk its citizens fleeing to United States to increase productivity here while enjoying the fruits/prosperity of their labor.
More information at Americans for Fair Tax on the fairtax.org Web site.
* * *
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.
I’m highly disappointed in WND. I expect a lot more from them.
See post 24.
"don’t you think they might lower prices to gain market share?"
JM, NO!! I think{?} companies will return more tax free money to investors in order to lure more tax free money into the company.
Have you noticed the price competition in just about every product and service? Companies that don't lower the price of their products to what the market is paying won't have any investors when their competitors outsell them by two to one because they have lower prices. Being outsold at two to one because a company refuses to lower their prices soon results into being outsold by three to one then five to one and outsold into bankruptcy.
Indeed. Hence the howling and lies so often heard from the far left.
They'll do ANYTHING to keep the income tax from being eliminated... it's the marxists' life-blood (along with the socialists').
Almost anything would be better than this country's current tax system, so quit bitching about what MIGHT happen and start worrying about what IS happening.
There's so many Chicken Littles that don't realize they're their own worst enemies. Of course, there are one or two people on the tax threads that have a vested interest in the tax quagmire and will fight tooth and nail and obfuscate to continue the quagmire.
As a small businessman, I spent more than 12 days just preparing my data for the tax accountant who has to help me make some sense of the Tax Code
"Consider also how replacing onerous-filing income taxes with a never-file sales tax would promptly boom today’s dying economy -- promptly boom entrepreneurial enterprises, big-and-small businesses, the professions, the arts -- promptly boom the quality of life for everyone. Realize how lower-and-middle income classes -- those who most avidly demand wealth redistributions -- would benefit the most by eliminating earned-income taxation on all individuals and businesses. …Income taxation by nature destroys the future -- destroys job-and-wealth-creating earnings, savings, investments, capital, and the most-precious commodity -- time."
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