Posted on 02/03/2002 3:17:46 AM PST by doosee
Edited on 04/13/2004 2:02:21 AM PDT by Jim Robinson. [history]
It will be another year of reforming around the edges of the U.S. income tax code.
Too bad. This is a menace that's been asking for it for a long time. It deserves to be driven out of its caves and gotten off the backs of Americans.
(Excerpt) Read more at pittsburghlive.com ...
Just think of how many (tax) lawyers we would be able to shoot! (heck they could ALL be considered tax lawyers, just for fun- coudn't they?)
I've never understood the badmouth tactics of the NRST shills, but daring to disagree with them is worse than suggesting that foreign aid to Israel be reduced. I would think that if their tax plan was worthwhile, they'd be more straightforward about how it actually worked.
Who said I opposed tax reform? And why did you feel the need to suggest that, ans imply some ulterior motive for oppsing it?
I am TOTALLY FOR tax reform- tear up the existing tax code tomorrow and step (hard) on anyone who gets in the way, I say...the current system is bizzarre beyond comprehension.
I just dont like tha NRST- especially having seen something similar 10 miles away from me in Canda... and PUH-LEEEZE dont go into a mind numbing discussin of how our NRST would be oh-so much different and better than Canada's VAT (or whatever it is).
Just go to canada once or twice and watch what happens when people go to the store and see that 40% tacked on to their bill...they HATE HATE HATE it... (but near-socialist Canada politicians love it) Anything the socialists like I am almost automatically against...
now- plain and simple- I would prefer NO TAX on income, but since THAT is never going to happen it would be great to have a tax code that can be expressed in one sentence (10% on income, period...)
Just go to canada once or twice and watch what happens when people go to the store and see that 40% tacked on to their bill...they HATE HATE HATE it..
Which provides a very good argument for having a National Retail Sales Tax. People who are indifferent to a tax system aren't likely to push for change.
The Coming Crisis in our Democracy
The Honorable James DeMint (R-SC)
United States House of RepresentativesTHURSDAY, APRIL 5, 2001
12:00 noon"In 1996, Congress passed a historic welfare reform law that has dramatically reduced the number of Americans who depend on welfare. In spite of this positive development, Representative DeMint is concerned about the steady growth of a welfare/entitlement state that extends well beyond the poor and is forcing millions of middle income Americans into dependency.
There has been a shift in the relationship between individuals and government, he argues, such that fewer and fewer are paying taxes at the same time that more and more are receiving increasingly generous benefits. If it becomes the case that most voters do not bear a financial burden for this largess, then there will be little to restrain--and significant political incentives to encourage--the continued growth of government. And at that point, DeMint warns, we have reached a major crisis in our democracy."
To remove taxation of the individual, is to remove the goad which assures accountability of government to the electorate. Federal taxes are high because a majority of the electorate do not share proportionately in the burden their demand for largesse imposes on the minority of citizens.
The call for representation without taxation is the formula that got is where we are at today. The ability to hide or disguise taxation from the view of large sectors of the electorate allows the Congress to get away with the creation of the evergrowing monster that it fosters.
A government which robs Peter to pay Paul can always depend on the support of Paul.
-George Bernard Shaw
Liberty and freedom have a price, responsibility. If that price is avoided or hidden there are no brakes on the growth of government, the ultimate result is the end of freedom through creeping socialism.
Right now the bottom 60% perceive little to no "Individual Income Tax" burden,(in many cases even a handout) and they continue to clamor for more from government looking for the top 40% to pay for it, corroborated by many recent polls on the subject of people attitudes about tax reduction. That perception continues to grow ever stronger by eliminating even more participants from the Individual Income Tax rolls as proposed in the current tax reduction proposals currently on board through changes in personal exemption limits and other mechanisms such as the EITC.
A prime example of what is happening comes from an analysis of Individual Income Tax effective rates in comparison with the Total rates of Federal taxation:
Those who perceive little burden play the role of Poor little Paul:
| Effective Individual Federal Income Tax Rate (Percent of gross income) | |||||||||||
| Income Category | 1977 | 1979 | 1981 | 1983 | 1985 | 1987 | 1989 | 1991 | 1993 | 1995 | Projected 1999 |
| Lowest Quintile | -0.6 | -0.8 | -0.2 | -0.5 | -0.2 | -1.3 | -1.9 | -2.9 | -3.4 | -5.6 | -6.8 |
| Second Quintile | 3.6 | 3.9 | 4.6 | 3.5 | 3.9 | 3.2 | 3.3 | 2.7 | 1.8 | 1.8 | 0.9 |
| Middle Quintile | 7.1 | 7.5 | 8.3 | 6.8 | 6.8 | 6.1 | 6.5 | 6.3 | 5.9 | 6.1 | 5.4 |
Those that readily perceive some of the burden.
| Effective Individual Federal Income Tax Rate (Percent of gross income) | |||||||||||
| Income Category | 1977 | 1979 | 1981 | 1983 | 1985 | 1987 | 1989 | 1991 | 1993 | 1995 | Projected 1999 |
| Fourth Quintile | 9.7 | 10.4 | 11.3 | 9.5 | 9.3 | 8.7 | 8.9 | 8.7 | 8.5 | 8.7 | 8.4 |
| Highest Quintile | 15.8 | 16.3 | 17.1 | 14.5 | 14.3 | 15.1 | 15.1 | 14.8 | 15.5 | 16.2 | 16.1 |
To play the role of mean ole Rich Peter.
While Congress plays both ends against the middle; hiding the real burden in inflation, higher prices on all goods and services, lower takehome pay, lower return on investment, and higher interest rates. All keeping the poor right where they are and pushing for more freebees.
Consider that 15.3% SS/Medicare tax on the 1st $70K of wages/self-employment income, plus the 6% Federal Unemployment tax, all of which are but a portion of the effect of federal taxes embedded the price of all products we purchase. Taken together with the Individual tax rates above we all pay more than:
| Effective Total Federal Tax Rate (Percent of reported income) | |||||||||||
| Income Category | 1977 | 1979 | 1981 | 1983 | 1985 | 1987 | 1989 | 1991 | 1993 | 1995 | Projected 1999 |
| All Families | 22.8 | 23.4 | 23.5 | 21.4 | 21.8 | 22.6 | 22.5 | 22.6 | 23.5 | 24.7 | 24.2 |
Data from IRS collections statistics and The Bureau of Economic Analysis as compiled in tabular form by the Congressional Budget Office.
http://www.cbo.gov/showdoc.cfm?index=1545&from=4&sequence=0
We wonder why over 60% of the voters PERCEIVE no problem with the taxrates and vote for polidiots that promise to bring home the most bacon because they are the only ones that benefit from higher taxes with more spending on socialistic "gimme" programs. As this continues under Bush or anyone else for that matter, expect a liberal tax and waste congress in short order, and for many years to come.
We are all paying through the nose, rich and poor while politicians play the tune of envy and resentment that Americans continue to respond to not understanding the full picture what is happening to them. The NRST is a means to open VOTERS eyes to the reality.
Is it any wonder that Alan Keyes refers to the income tax as the slave tax and supports a National Retail sales tax to replace it?
The Original Intent of the individual income tax is for political and social control not revenue collection. The Individual Income tax is maintained to establish and hold every person in the country perpetual legal jeopardy. That is a situation that must end with the repeal of the income tax from the statutes, and the prohibition of its use by Constitutional amendment that future generations will not face the same manner of manipulation and interference in their lives.
Is that really your argument for a NRST? Because we know people will hate it so let's implement it so people will be motivated to change? How about we are ALREADY motivated to change and let's NOT implement another system people will be motivated to want to change.
I agree with the rest of your comments- taxation NEVER was intended to be a social engineering tool...
You have not seen anything similar to the nrst. PUH-LEEZE don't go off saying you have, because you haven't. AGAIN, Canada's tax system is NOT what the NRST is! Good grief! Are you some militant vegetarian refusing to see plain fact?
Just go to canada once or twice and watch what happens when people go to the store and see that 40% tacked on to their bill...they HATE HATE HATE it
Again, Canada's tax system mirrors the flat income tax. The only difference between the flat income tax and Canada's VAT ist that in Canada they at least can see what they're paying better than one would under a flat income tax. Many people, including you, would think that a 10% flat tax means you only pay 10% of your income in taxes. That would be very wrong. There is a ton of info available out there showing this - I'll leave it up to you to find it unless you ask for info and/or links.
That being said, wouldn't it be nice if all individuals in these United States actually KNEW their true tax burden? The socialists would HATE that! Why if we all knew what we really pay to the feds in income related tax we'd revolt! There's income taxes for individuals, income taxes for business, payroll taxes totalling 15.3% ,estate taxes, gift taxes, etc. EVEN with a zero individual income tax an individual wage earner still pays 35+% of his income in federal taxes.
So if you're for tax reform, the flat tax is not going to reform anything.
I had forgotten about that one!
Tax inclusive is the method used for the existing taxes that the nrst will replace. For this reason, most prefer to compare using tax inclusive rates. There is nothing "mind-twisting" about that!
Nevertheless, you can discuss the nrst as tax exclusive too- who cares? It's the same amount of tax either way.
NRST Method 1) tax inclusive rate 23% (this is the same method used to express existing income tax rates): 23 cents (23%) of every $1.00 you spend is the maximum possible tax burden.
Method 2) tax exclusive rate 30%: 30 cents added onto every $1.00 you spend is the maximum possible tax burden.
It's the same amount of tax either way!
With the income tax it looks like this (suppose you're in a 28% bracket)
Method 1) tax inclusive rates: 28 (28%)cents of the next $1.00 you earn goes to FIT. Also, 7.65 (7.65%) cents of your next $1.00 you earn goes to FICA. Also, you forfeit another 7.65 (7.65%) cents of your next $1.00 you earn in the form of higher prices and/or lower wages. Also, you pay an estimated 22 cents (22%)of the next dollar you spend on anything goes to fed inc tax and compliance costs. [ sheesh 28+7.65+7.65+22= 55%! Of the next $1 you earn, 55 cents (55%)goes to federal income related taxes!)
method 2) tax exclusive rates: 38.9% income tax, 8.3% FICA, 8.3% forfeit, 28% fed income tax/compliance costs for a total tax exclusive rate of 83.5%.
So if you want to compare tax INclusive rates it looks like this:
NRST - 23% of your next dollar spent may go to federal tax (depending on whether the good was taxable)
Income tax (28% bracket) - 55% of your next dollar WILL go to income tax.
If you prefer tax EXclusive rates, it looks like this:
NRST - 30% may be added onto your next purchase to go to federal tax.
Income tax - 83.5% of your take home pay DOES go to federal taxes.
It is ignorant to compare rates figured on different bases. Similar to saying "I'm taller than you you because I'm 74 tall and you're 6 tall". That would be stupid if one measure was inches and the other was feet.
It's really EASY to express nrst rates...23/30. It's really difficult to express income tax rates. Confusion is one thing you've said you'd like to avoid.... BTW, you say you know Canada's system, but you haven't demonstrated anything relating to knowledge of it.
I don't see why sales tax is preferable to income tax. It seems similar to a flat tax, since spending patterns don't vary as widely as income. I drive a $20K car, Bill Gates drives possibly a $80K car, but the difference in our incomes is a lot more than 4x.
To supporters of a flat tax: there are two ways to do it. (a) You charge tax so low that the homeless bum can afford to pay it, in which case Bill Gates is essentially freeloading, because the extent to which he benefits from public infrastructure, roads, law enforcement and national defense is a lot more than the extent to which the homeless bum benefits from it. Also, in this case, you probably won't raise enough money to build a single freeway or maintain a single Air Force fighter. (b) You charge tax so high that everyone below the poverty line starves, and Bill Gates is *still* freeloading.
No, I don't see a flat tax as realistic.
Additionally, a high retail tax discourages spending, which is bad for the economy.
It really is irrational that the NRST shills believe that they can browbeat people into accepting their false paradigms.
Is that really your argument for a NRST?
No, that is but a portion of the argument. The issue raised is that no change for the better can be expected as long as the majority of voters believe they benefit from the system.
The substantive reason to replace the income tax is that it distorts the electorate's view of costs of government, and it holds every individual in jeopardy of audit and civil action to prove their income. A situation that is counter to all principles of freedom.
The reality of the tax system is that only half of it is visible, the remainder is extracted through corporations and businesses as surrogate tax collectors for the government embedding the tax burdens into price inflation where they are hidden from view.
Taxes and the costs of tax compliance make up more than 33% of product retail pricing. That is paid by all consumers regardless of whether or not one formally files an income tax return or not. That burden is born by each and every individual in the nations, rich poor or indifferent.
The substantive reason for the NRST is to make the tax burden totally visible to the electorate and due vigilence can be exercised.
All income and payroll taxes should be eliminated. Between business income taxes and payroll taxes, the burden on citizen as reflected through higher prices, lower wages, and lower return on investements are horrendous.
The following article covers the mechanism on how the current tax system propagates and is embedded into consumption expenditure.
DO YOU PAY YOUR INCOME TAX
AT THE SUPERMARKET?
by D. Sherman Cox J.D. L.L.M. Taxation
The percentage used in the above article is somewhat off target in that it is based on a percentage that excludes individual income tax and SS/medicare contribution extracted out of individual wages & salaries. The 24% in the article considers only those factors actually paid to government out of impositions on the business plus cost to business of complying with the income, payroll, excise & tariff tax laws.
The total contribution of the federal tax system(including taxes in gross wage/salaries) to the price of retail consumption goods and services is 36% for taxes alone. Including cost of compliance at around $600billion/year, increases that percentage to about a 47% total burden on the family caused by the federal tax system as it exists today.
Tax as % of current family retail expenditure = fed/(1-state-fed-savings) =
23.5/(1-.235-0.102-0.012) = 36.09%
Current total Federal tax revenues are about $1900billion, more than $600billion(Paine '97, Pilla '95, AGCCA 2000, Williams 2000) additional dollars are passed on in consumption prices due to the business costs of complying with the federal tax law.
percent total federal burden = 36*(1900+600)/1900 = 47.36% as passed through consumption prices. Reduce the taxes on business and simplify them in any way possible ultimately means a high standard of living for the citizen, not less.
That in a nut shell in more than enough economic reason to turn the a 23% consumption tax such as the NRST described in HR2525:
H.R.2525
SPONSOR: Rep Linder, John (introduced 07/17/2001)
A bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national retail sales tax to be administered primarily by the States.
Refer: http://www.fairtax.org
And the remaining moral reasons as described by Alan Keyes are more than ample of themselves.
Alan Keyes refers to the income tax as the slave tax that should be abolished as a moral imperative, and replaced with a National Sales Tax:
Keyes on Taxes & Government Spending:
Alan Keyes Interview with Des Moines Register:
The intent of the structure of the individual income tax is for political and social control not revenue collection. The Individual Income tax is maintained to establish and hold every person in the country perpetual legal jeopardy.
Considering those factors, it is always good to remember the philosophical roots of the left which can be found here: Manifesto of the Communist Party, by Karl Marx and Frederick Engels, published in 1848. Among their recommendations are these:
The proletariat will use its political supremacy to wrest, by degree, all capital from the bourgeoisie, to centralize all instruments of production in the hands of the state ... . Of course, in the beginning, this cannot be effected except by means of despotic inroads on the rights of property ... . These measures will, of course, be different in different countries. Nevertheless, in most advanced countries, the following will be pretty generally applicable.
1. Abolition of property in land and application of all rents of land to public purposes.
2. A heavy progressive or graduated income tax.
3. Abolition of all rights of inheritance.
4. Confiscation of the property of all emigrants and rebels.
5. Centralization of credit in the banks of the state, by means of a national bank with state capital and an exclusive monopoly.
6. Centralization of the means of communication and transport in he hands of the state.
7. Extension of factories and instruments of production owned by the state; the bringing into cultivation of waste lands, and the improvement of the soil generally in accordance with a common plan.
8. Equal obligation of all to work. Establishment of industrial armies, especially for agriculture.
9. Combination of agriculture with manufacturing industries; gradual abolition of all the distinction between town and country by a more equable distribution of the populace over the country.
10. Free education for all children in public schools. Abolition of children's factory labor in its present form. Combination of education with industrial production, etc.
That is a situation that must end with the repeal of the income tax from the statutes, and the prohibition of its use by Constitutional amendment that future generations will not face the same manner of manipulation and interference in their lives.
The fact is, rapacious taxation, and FICA, funds socialist programs. It is without question that socialism destroys any system it touches, including constitutional republics organized under the rule of law.
To transfer that funding from one system to another is pointless, in terms of funding. And to transfer to a system, the abuse of which can only be protested by not having access to thngs like food and shelter, and the material items that are necessary for the body to live, is not very wise. 
a high retail tax discourages spending, which is bad for the economy.
What you appear to be overlooking is the fact that the income tax as it stands today impacts the economy by raising consumption prices 47% over what they would be without federal taxes. The NRST only impacts the economy by 30% over that same base price.
The difference between the two conditions being the cost of tax compliance that is embedded into the price of goods and services under business income and payroll tax systems( see #192 above). That business cost of compliance, by the way, does not disappear in the Flat Tax case as the government still defines what is and is not income to the business. In the opinion of at least one tax consultant, the Flat Tax would have considerable problems in that area and does nothing to relieve businesses of requirements for payroll tax accounting.
And to transfer to a system, the abuse of which can only be protested by not having access to thngs like food and shelter, and the material items that are necessary for the body to live, is not very wise.
Which is why the NRST under HR2525, pre-pays taxes up to the poverty line of expenditure to everyone through the Family Consumption Allowence which simulates the personal exemptions & standard deductions of the current income tax and Flat Tax proposals. That avoids the problem of the Gucci Gulch lobby gang pushing their favorite "necessity" to be excluded from the tax base thereby raising tax rates on every thing else and creating the mass of special exclusions and rules that plague the current tax system.
How will the Family Consumption Allowance [FCA] work?
All legal residents will receive a FCA equivalent to the FairTax paid on essential goods and services. The FCA will be paid in advance, in equal installments each month. The size of the monthly FCA will be determined by the government's Poverty Level for a particular family size, multiplied by the tax rate.
Every year, the Department of Health and Human Services [HHS] determine the "poverty level" for each family size.
|
The 2001 "FairTax" Family Consumption Allowance Figures |
|||
|
Family Size |
HHS Poverty Level |
Annual FCA |
Monthly FCA |
|
One |
$8,590 |
$1,976 |
$165 |
|
Two |
$17,180 |
$3,951 |
$329 |
|
Three |
$20,200 |
$4,646 |
$387 |
|
Four |
$23,220 |
$5,341 |
$445 |
|
Five |
$26,240 |
$6,035 |
$503 |
|
Six |
$29,260 |
$6,730 |
$561 |
|
Seven |
$32,280 |
$7,424 |
$619 |
|
Eight |
$35,300 |
$8,119 |
$677 |
1) Federal Register: February 16, 2001, Pages 10695-10697).
[ The monthly FCA for each adult is .23 * (HSS poverty level for a single person)/12 to assure no marriage penalty due to the manner in which the poverty level is dependant on family size. The monthly FCA for each child is .23 * (the incremental increase of HSS poverty level for a family with one child over no child) ] A. Geezer
A family of four, for example, could spend $23,220 per year free of tax because they will have received over the course of the year rebates totaling $5,341. $5,341 is the amount of sales tax paid on $23,220 in expenditures. A family spending double the "poverty level" or $46,440 per year will effectively pay tax on only half of their spending and, therefore, have an effective tax rate of 11 ½ percent or half the FairTax rate.
The beauty of the FairTax is that you can control how much you pay in taxes. If you happen to save, invest or spend a portion on used [previously taxed] items, you can get your effective tax rate well below 9%.
Charts, graphs and technical nitpicking does not mitigate the simple fact that any program of massive wealth transfer will continue to fund the massive transfer of wealth necessary to a socialist system.
You state the obvious, the charts and graphs demonstrate the mechanism by which political support for socialist programs are maintained and not to mitigate the reality. Now perhaps you will explain how one changes the system to assure that those who are on the recieving end of government largess, are made aware of the cost of government to themselves.
Under the current income/payroll tax system and the proposed Flat Tax systems, the individual not on the "tax rolls" perceives little or no cost to themselves and all benefit. Such a condition assures the continued exploitation of rich vs poor rhetoric that socialism feeds on.
Under a Retail Sales Tax all citizens are made aware of the cost of government directly with each purchase they make. Under the income/payroll tax systems that visibility is lost on the lower end of the economic spectra through the artifice of the income tax exemption and Earned Income Tax Credits which leave the impression of little or no cost to the primary recipient of social programs.
As I have repeatedly pointed out in regards to the income/payroll tax and the Flat Tax systems:
The call for representation without taxation is the formula that got is where we are at today. The ability to hide or disguise taxation from the view of large sectors of the electorate allows the Congress to get away with the creation of the evergrowing monster that it fosters.
A government which robs Peter to pay Paul can always depend on the support of Paul.
-George Bernard ShawLiberty and freedom have a price, responsibility. If that price is avoided there are no brakes on the growth of government, the ultimate result is the end of freedom through creeping socialism.
...just ask Steve Forbes.
There is no peaceful way, like there is no peaceful way to induce a government to return power already conceeded. If you don't learn from history, you're doomed to repeat it. You're a man in a hole, thinking that digging it a foot deeper will get you to the sunlight.
There is no peaceful way
As long as you believe that, there won't be.
I, for one, am willing to expend the effort necessary to make the attempt at a change in the law to bring about a peaceful reform. You do what you can, and if God wills it, the change will be peaceful. I see no point in not working towards peaceful reform.
Revolutions are so very messy with no certainty the result will be better than what you start from.
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