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"The Founder's method of taxing consumption began with an external tax on imports at our water's edge, and was extended to reach internal consumption only if external taxation were found insufficient."

One of the questions I have labored over concerning a national sales tax is this: if it is constitutional, and if Congress already has the power to tax anything it wants, why isn't there a national sales tax on everything already? I think the author's point, that our focus should be on external taxation, deserves some serious examination.

1 posted on 04/22/2003 10:40:02 AM PDT by sheltonmac
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To: sheltonmac
A National Sales Tax is very different from a National Retail Sales Tax.

A national RETAIL sales tax is not what is described in the first paragraphs above. The word RETAIL changes everything.

FAQ here.

2 posted on 04/22/2003 10:44:32 AM PDT by Principled
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To: sheltonmac
While I agree with the end in mind (you already knew that) many of us (at least back in the Steve Forbes day) say the flat tax coupled with an abolition of the withholding tax as the key to eliminating the income tax or really, the concept of direct taxation from DC entirely.

Imagine having to cough up on average $10K every April 15? Big government would last one maybe two election cycles and people would again rely on their states to provide goods and services. Anyway, I see the flat tax as an incremental change and repealing the 16th Amendment as a non-starter, though I am listening.

I agree that with the exception of Chief Negotiator (RIP) every time I get involved in a debate with NST folks, it seems clear that their only end in mind is the elimination of the IRS not the complete elimination of direct taxation from the DC tax regime.
3 posted on 04/22/2003 10:45:29 AM PDT by JohnGalt (Class of '98)
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To: sheltonmac
....burdens the American Citizen in its collection; and, is to be paid BY the farmer, mechanic, laborer, etc. who will continue to see the intrusion of the "tax gatherer of the United States" if such a system is adopted!

One thing that is often ignore by its proponents is the NRST imposes a tax on goods AND services. This means millions of people who are self-employed will have to charge a 30% tax on top of their services.

4 posted on 04/22/2003 10:46:02 AM PDT by Always Right
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To: sheltonmac
Woohooooo!

GREAT POST!!!

5 posted on 04/22/2003 10:48:26 AM PDT by Willie Green (Go Pat Go!!!)
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To: ppaul; ex-snook; Inspector Harry Callahan; WarHawk42; Satadru; manumission; Ted; greenthumb; ...
*PING*
6 posted on 04/22/2003 10:49:04 AM PDT by sheltonmac
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To: sheltonmac
There are literally dozens of federal "sales" taxes already except they are called "excise taxes". As it stands, the federal government skims off the top (income taxes) and the middle (corporate taxes which are hidden the in the price of the goods) while state governments skim off the top (state income taxes) and bottom (sales taxes).

Believe me, if the government could figure a way to impose a 10% or higher sales tax on all goods, IN ADDITION TO all they are taking now, without causing a revolt they would. The government sees you as nothing more than a sorce of money to take from so that the elite can buy power and votes and influence.
7 posted on 04/22/2003 10:50:18 AM PDT by Blood of Tyrants (Even if the government took all your earnings, you wouldn’t be, in its eyes, a slave.)
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To: sheltonmac
The reason a national sales tax will never work is that it takes the power away from legislatures. Politicans have power because they have the ability to favor one group and punish another through tax policy. If all taxes were doled out equally, then the politicans would have nothing to use to "shake down" a group or industry for a campaign contribution.
8 posted on 04/22/2003 10:51:11 AM PDT by LetsRok
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To: sheltonmac
Here we go again....

Myopic FReepers would still rather report their income to the Feds via a "flat" tax.

The flat tax will again become the monstrous daddy that it is now if it's ever passed after the vulture lobbyists circle overhead and pick out their deductions for the special-interests groups.

Current unconstitional income tax is also a VAT - the prices for goods and services are adjusted to pay the hidden taxes paid to make the product.

The NRST would also tax the underground economy - drug dealers have to buy ziploc bags, homeless bums have to buy clothes from somewhere (unless if they buy it from a rummage sale, then it's not taxed again because it's already taxed)

10 posted on 04/22/2003 10:53:15 AM PDT by Extremely Extreme Extremist
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To: sheltonmac
A 19th century government can be paid for with import taxes. The behemoth we have now can't. We have about 1.2 trillion dollars in annual imports, or about half as much as the feds squander.

For all intents and purposes there already is a national sales tax on everything you buy, although it isn't presented as such. Income and excise taxes on every level of domestic production and distribution make everything you buy cost 50-150% more than it would otherwise.

12 posted on 04/22/2003 10:56:42 AM PDT by CGTRWK
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To: sheltonmac
One of the questions I have labored over concerning a national sales tax is this: if it is constitutional, and if Congress already has the power to tax anything it wants, why isn't there a national sales tax on everything already?

Because it's rather obvious, unlike (for example) a VAT, or income tax withholding.

You would actually see how much the government is costing you, every single day, day in, day out, on every sales receipt and that would lead to the question: "Am I paying too much money to Uncle?"

The politicians don't want to take the chance.

Raising the sales tax a mere 0.25% in California takes a lot of effort. This is a good thing.

13 posted on 04/22/2003 10:58:29 AM PDT by Poohbah (Crush your enemies, see them driven before you, and hear the lamentations of their women!)
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To: sheltonmac
Check your phone and utility bills.
18 posted on 04/22/2003 11:03:10 AM PDT by IJCR2
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To: sheltonmac
A national sales tax plan which omits external taxation as a principal source to fill our national treasury, is in fact a surrender of national sovereignty to the advantage of foreign interests!

This argument falls flat on its face when compared to the current situation.

Anything produced domestically is federally taxed multiples of times. Any foreign goods, unless there's a tariff or excise tax on them, aren't federally taxed AT ALL.

Under a national retail sales tax, domestic goods would be taxed ONCE, at the point of sale, as would foreign goods. The price of domestic goods would fall dramatically, and the price of foreign goods would rise.

The author is silly.

21 posted on 04/22/2003 11:07:18 AM PDT by jimt (Is your church BATF approved?)
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To: sheltonmac
Internal taxes were frowned upon by the Founder's especially when a national revenue could be had by requiring foreign nations to pay for the privilege of doing business on American's soil!

With all due respect to the Founding Fathers, this is a lot of crap. One of the first acts of the U.S. government was an excise tax on distilled spirits in 1791, a move that eventually led to the Whiskey Rebellion in 1794. It seems that we have nothing to complain about these days when it comes to the "unconstitutional" expansion of the Federal government -- the United States "as we knew it" only lasted for about two years before all the nonsense began.

25 posted on 04/22/2003 11:09:19 AM PDT by Alberta's Child
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To: sheltonmac
(sarcasm) I see the undercover IRS agents on FR over slept today.
33 posted on 04/22/2003 11:21:39 AM PDT by Paul C. Jesup
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To: sheltonmac
"...a national revenue must be obtained; but the system must be such a one, that, while it secures the object of revenue it shall not be oppressive to our constituents."

Well, it's obvious the present, global money monger owned, federal farce has no problem with being oppressive.

55 posted on 04/22/2003 12:06:47 PM PDT by eskimo
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To: sheltonmac

Internal taxes were frowned upon by the Founder's especially when a national revenue could be had by requiring foreign nations to pay for the privilege of doing business on American's soil!

Since when do foreign nations pay tariffs? The import pays the duty, which increases the price of the item that the American consumer pays. Even the founding fathers understood that much:

Hamilton, Federalist #35:

"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."

Furthermore external taxes were never expected to provide for the needs of the nation under the Constitution:

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 #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."

Furthermore to deny that the National Government was expected to not tax the individual, by the founders, is to deny one of the primary reasons the Constitution replaced the Articles of Confederation:

 

James Madison, Federalist #39:

James Madison, Federalist #45:

James Madison, Elliots Debates Vol 3 p128:

The primary premise of the argument put forth in the article is flawed from it's very foundation for lack of completeness in scholarship at its best face or outright misdirection and fabrication in its worst.

73 posted on 04/22/2003 4:17:41 PM PDT by ancient_geezer
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To: sheltonmac
Internal taxes were frowned upon by the Founder's especially when a national revenue could be had by requiring foreign nations to pay for the privilege of doing business on American's soil!

Supposing this assertion is accurate, it just goes to show that the Founders were Great Men but poor economists.

74 posted on 04/22/2003 4:30:31 PM PDT by edsheppa
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To: sheltonmac; abigail2; abner; adanaC; advocate10; afraidfortherepublic; agitator; alisasny; ...
Important read.
80 posted on 04/22/2003 6:14:31 PM PDT by editor-surveyor ( . Best policy RE: Environmentalists, - ZERO TOLERANCE !!)
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To: sheltonmac
BOOKMARKED
85 posted on 04/22/2003 6:41:33 PM PDT by kitkat
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To: Taxman
I figure you've seen this, but just in case you haven't...
92 posted on 04/22/2003 7:29:09 PM PDT by EternalVigilance
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