Posted on 08/11/2003 10:17:08 PM PDT by FairOpinion
It's in the hopper. In the last Congress, the number was HR2525. This time, it's HR25. When I speak of HR25 on my show, the residual phone calls continue for days. When I talk up HR25 during a banquet speech, the deserts remain uneaten.
HR25 is called the Fair Tax Act of 2003, and its stated purpose is "To promote freedom, fairness and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national sales tax to be administered primarily by the states.
I've been studying and promoting this idea for nearly 17 years. I've debated each and every possible point and objection, and have almost always drawn the opposing party to my side. HR25 has 32 cosponsors and absolutely no organized opposition. This is legislation that would transform our economy and our society for the better, yet this may well be the first time you've heard of it. It's time to bring you up to speed.
Here are the highlights. If The Fair Tax Act were to become law, the following would happen.
The law establishing the federal income tax would be repealed, both for individuals and for businesses.
A constitutional amendment repealing the 16th Amendment would be sent to the states for ratification.
All laws providing for payroll taxes for the funding of Social Security and Medicare would be repealed.
A sales tax would be instituted on the sale of all goods and services at the retail level. This retail sales tax would replace all payroll and federal income taxes.
Government funding would remain at present levels, and no changes would be made to Social Security and Medicare other than the method of funding those programs.
Does the idea sound pretty radical thus far? Stick with me a few hundred more words.
With the passage of HR25, you would receive 100 percent of your bi-weekly paycheck. If you make $1,000 a week, your paycheck would be $2,000 every two weeks. Of that $2,000, you would only pay tax on the money you spend at the retail level. All savings and investments would be tax free. Any money you spend at the retail level would carry a 23 percent sales tax.
Yikes! Did that man say 23 percent? Yeah, I know. It sounds awfully high, but here are some points you need to consider.
First, there are the embedded taxes on every single product or service you purchase at the retail level. Harvard economists have estimated this embedded tax to be around 22 percent of the cost of those goods. That 22 percent represents the payroll taxes and corporate business and income taxes paid by every manufacturer, shipper, wholesaler, merchandiser and retailer having any connection whatsoever with the product you have purchased. These taxes are all added to the cost of consumer goods.
As soon as these taxes vanish, economists agree that competitive market pressures will immediately cause prices at the retail level to fall. So, we almost have a wash here. The prices decrease by over 20 percent, and you start paying a 23 percent sales tax. Remember, though. You brought home 100 percent of your paycheck, and every dollar you don't spend at the retail level remains untaxed.
But what about the poor? They're not really paying federal income taxes anyway, so this big sales tax is really going to hit them hard, right?
Wrong. The Fair Tax Act provides that no family, rich or poor, will pay sales taxes on the basic necessities of life. The cost of these basic necessities is set at the federally determined poverty level for various sized families. At the beginning of every month the head of every household in America will receive a check, or an electronic credit to their bank account, in an amount equal to the sales tax they would pay on the basic necessities for their sized family. This provision is completely neutral as to income, so class warfare political rhetoric becomes useless.
HR25 has friends in high places inside the Beltway. When briefed on the idea, Vice President Dick Cheney told Congressman John Linder: "This needs to be put before the president." Commerce Secretary Don Evans, after being briefed, asked Linder: "Why haven't you passed this?"
And just why hasn't it passed? Because the idea is so bold that many politicians, while personally praising the concept, just assume it can't pass.
It can pass, my friends. It can pass if the people of America learn the details and then let their elected officials know that they want some action. If you have the slightest interest, just go to the website for Americans for Fair Taxation. Every detail is covered, every question is answered.
If America is now ready to accept the possibility of the Red Sox winning the World Series, we can certainly support an idea as daring as the Fair Tax Act.
Dream on!
The funding of the Budget via a National Sales Tax, rather than an Income Tax, has essentially nothing to do with the Federal Reserve -- pro, or con. The Federal Reserve's power to peg Interest Rates, or just outright Print Money if it wants to, is not in any way affected by NRST legislation.
The National Sales Tax simply alters the means by which the Treasury collects those little pieces of Federal Reserve paper (income vs. consumption), it has no bearing on the Federal Reserve's absolute power over the supply inflation or deflation thereof.
Ergo, whether you are pro-Federal Reserve or anti-Federal Reserve, the National Sales Tax has no goodies for you -- because it addresses Fiscal Policy, not Monetary Policy.
See #68. Apparently several posters don't realize that this is essentially a Fiscal Policy issue, not a Monetary Policy issue. Abolishing the IRS has basically nothing to do with the Federal Reserve -- the Federal Reserve prints the Money, the IRS collects it. NRST legislation addresses the collection of Federal Reserve Notes, not the printing thereof.
Now, at this point, you might ask -- "If it doesn't restore Honest Money, if the Fed still controls the Value of Fiat Money -- what's the point?" Well, the point is this: if you were to purchase products from me, would you prefer to pay me for those products yourself... or would you prefer to hand over your wallet, let me snoop though your personal effects, withdraw the payment, and then hand your wallet back to you? The same applies to the IRS (and likewise to a Flat Income Tax, which though economically-similar to a National Sales Tax in effect, retains the IRS and its powers -- whereas the NRST does not).
Have you heard this one?
"Why are all Jews circumcised?
They want everything 20% off!"
No, they don't. The IRS answers to the Department of the Treasury, not the Federal Reserve. You're confusing the Money Printer with the Money Collector, again.
and the Secretary of the Treasury is an employee on the Federal Reserve's payroll...
No, the Secretary of the Treasury is an employee of the Department of the Treasury, which is a division of the Executive Branch, not the Federal Reserve.
If you believe that the Secretary of the Treasury is an employee of the Federal Reserve, please cite the Act of Congress designating such employment. Chapter and Verse, please -- I'll grant your point if you can prove it, but certainly not until.
Although the IRS could continue to exist via the Nat'l. Sales Tax, which is doubtful in itself since the push is for States to administer it, The Federal Reserve/IRS would lose it's power over US Banks & Employers...and the rich elite crave power over anyone lesser then themselves.
No, again you're confusing the Money Printer (FED) with the Money Collector (IRS). Under a National Sales Tax, the IRS would lose power over Employers (not having power to Audit their Income), but the Federal Reserve's power over the Banks (which is an entirely different arrangement) would be unaffected.
In fact, under a National Sales Tax, the Federal Reserve's power to peg Interest Rates and Print Money would not be altered in any wayt whatsoever. Fiscal Policy and Monetary Policy are two different things.
If you believe that the FED would lose Power -- ANY of its existing powers -- under a National Sales Tax, please cite the exact power which the FED (not the IRS) possesses now, which it would lose.
Attacking the tax system in the US without repealing the 13th & 16th Amendments is a bit like attacking the arms of a lion, tiger or bear - if you want to kill it you aim for the head or other vital organs.
Agreed, you do need to repeal the 16th Amendment once you have a National Sales Tax, in order to prevent the re-institution of an Income Tax.
None of which has anything whatsoever to do with the FED, which pegs Interest Rates and Prints Money (and has nothing whatsoever to do with Income Tax Collection).
Furthermore, the 13th Amendment Abolished Slavery. I'm not sure why you'd want to repeal the 13th Amendment and bring back Slavery, but it has nothing to do with either the FED or the IRS (which are, I repeat, themselves completely different entities with completely different powers and duties).
The ultimate "special interest" is the Federal Reserve, and it's control over politics inside the beltway is unrivaled...until the American people take back the power to coin money and start establishing their own monetary and fiscal policies they will never get a grip on the "tax" issue. ;-)
Horsefeathers. It is entirely possible to change the Mode of Collecting Federal Reserve Notes (from Income Tax to Sales Tax), without addressing the Printing of Federal Reserve Notes (i.e., the Federal Reserve) in any way.
Why? Because the two have nothing to do with eachother.
And neither has anything to do with the 13th Amendment Abolition of Slavery.
You're not thinking this through, I'm afraid. I realize that you believe that you are, but you really must read more. You don't actually seem to understand the relationships here at all (the FED is perfectly capable of controlling interest rates, printing money, and devaluing the currency whether under an Income Tax or a Sales Tax; and the Income Tax is itself certainly a possibility with or without the FED). Think about it.
best, OP
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