Posted on 02/21/2002 9:19:05 AM PST by anniegetyourgun
WASHINGTON- Treasury Secretary Paul O'Neill, who calls the federal income tax law an abomination, said Thursday the Bush administration is preparing a series of reports on the complexities and will work with Congress on possible solutions for this year.
Virtually since the time he assumed the Treasury post last year, O'Neill has been criticizing the income tax law as a complicated mess that can be indecipherable for many taxpayers, from individuals to big corporations.
But O'Neill's remarks Thursday's to the Chamber of Commerce raised the prospect that the administration would soon start a real push for simplification.
"In the coming weeks, we at Treasury will be producing a series of reports on the complexities of the tax code for individuals, small businesses and for corporations," O'Neill said. "We'll highlight possible solutions to specific complexities and work with Congress to see what we can implement this year."
The tax law requires nearly 1.4 million words, 650 tax forms and 13,000 pages of explanation and increasingly leads more than half of taxpayers to seek professional help.
Despite all the talk about simplification, the laws have only gotten increasingly complicated over the years as tax credits and other breaks are used in place of direct government spending programs.
President Bush's new budget includes a raft of such proposals, including a tax credit for the purchase of health insurance that would require taxpayers to figure out how much they could get based on their income level, family size and whether the policies meet certain standards.
Following a major simplification in 1986, Congress has done little more than hold hearings on simplification, while adding numerous targeted tax breaks.
"Our tax code is an abomination," O'Neill said Thursday, repeating one of his favorite mantras. "Everyone who has anything to do with the tax code agrees it is just an unbelievable mess."
As a case in point, O'Neill said there are five major definitions of a child in the tax law. IRS Commissioner Charles Rossotti has said that if he had to file for the earned-income tax credit for low-income families he doesn't think he could do it without professional assistance, O'Neill said.
Treasury will release papers illustrating such "absurdities," O'Neill said, and he called on the Chamber of Commerce to lobby Congress to simplify the law.
They do.
How about this... while you hold your breath, write an email/fax/or snail mail to your critter stating your support. That would work better than just holding your breath...
The idea of eliminating the income tax code puts you to sleep?
Huh? That's nutso. THe income tax affects each and every one of us... heavily.
Oh, good: they're going to simplify the Federal Paycheck Confiscation program. That should be a real help. Won't change the nature of the beast at all, but some people will think it's a good thing. All of this complaining about the complexity of the tax code is certainly not a good thing: it might actually lead to a tax revolt, and who knows where that might lead? Better that the citizens should be thrown a sop so that they'll be convinced that The Government is actually Doing Something to Make Life Better.
That's because they never actually read the bills they vote for. They're too complex for actual consumption.
Oh. That's the point, isn't it.....
"... legislators cannot invent too many devices for subdividing property, only taking care to let their subdivisions go hand in hand with the natural affections of the human mind. The descent of property of every kind therefore to all the children,...But it is not too soon to provide by every possible means that as few as possible shall be without a little portion of land. The small landholders are the most precious part of a state."
-- Thomas Jefferson to James Madison, Oct. 28, 1785 -- PROPERTY AND NATURAL RIGHT
Far fewer government programs in Taiwan, so there was $ for some national health care (to a point). If you were working, employer, employee and government all contributed. Approximately $US 60.00 was withheld from my check every month for health care. (Of course I still had to pay small fees when I went to see a doctor.) Although their medical care is not as good as ours, Taiwan had thousands of little neighborhood clinics, first come first serve, which were very hand for flu, little stuff.
Perhaps some of the Taiwanese could come give some instructions to our politicians on how to get the tax down and the economy going. Since many of our elite "leaders" diss American founders, economists etc, they might be more open to the diversity of listening to Chinese.
A sales tax would harm young couples with growing children.
Not at all, in the manner HR2525 is constructed, each legitimate household receives a prebated monthly cash payment to cover taxes up to the HSS povertyline.
In that manner, no person is burdened by tax on the necessity level of expenditure, yet all are made aware of the cost of government by virtue of having actually pay the tax at the retail register.
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] determines 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 have some control over 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 below 9%.
In fact, due to the structure of the NRST in that it only taxes once, at the retail level, the base price of goods and service can be expected to fall by 20 to 30%. One study of producer prices suggests 22.5% as a average value for the drop in producer prices. After list prices have settled, the NRST plus the new price level of goods and services would be nearly the same as expenditures now, with the advantage that one would receive their full gross paycheck instead of the after tax check we receive now, plus the FCA paid out for every person in a household each month.
People just starting out, buying a home, or moving to a larger apartment would be severely punished by a sales tax.
Goods are taxed once but only once, thus the NRST would not be charged in resale markets such a first time buyers of older homes. That coupled with the increase in disposable income available to families, earnings and investment not being taxed, make the potential for home buyers and people just starting out substantially better.
I am for a flat tax.
Problem with a flat tax, is that it does nothing to control taxation behind the scenes and out of sight of the voter. It becomes essentially an income tax for high wage and salaried persons, coupled with a subtractionb method VAT on business, with government still calling the tune.
To remove taxation of the individual voter, 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 us 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 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 70% 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.
The largest problem with the growth of government is the lack of visibility of the cost of government as regards the lower end of the economic spectrum.
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."
Milton Friedman as quoted by Northwest Florida Daily News, 10-16-2000:
Walter Williams, World Net Daily, 10-25-2000
According to the most recent U.S. Treasury Department figures, in 1997 the top 1 percent of income-earners (those with income of $250,000 and higher) paid 33 percent of all federal income taxes. The top 5 percent of income-earners ($108,000 and over) paid 52 percent, and the top 50 percent ($36,000 and over) paid 96 percent of income taxes. Guess what the bottom 50 percent of income earners paid?
If you're among those who pay little or no federal income taxes, what do you care about tax cuts? Moreover, if you think tax cuts pose a threat to government handout programs, you might be openly hostile and support Al Gore's silly "risky scheme" talk. So many Americans paying little or no federal taxes makes for a natural spending constituency. It's like me in the restaurant: What do I care about extravagance if you're footing the bill?
With a drop in accountability of government which is accomodated by the Flat Tax systems currently proposed, just how are were to regain control over the excesses of government?
Why don't you name the "Flat Tax" for what it is A Flat Individual Income Tax, + 15.3% Payroll Tax with Corporate Profits Tax.
It isn't the size of the report card that makes the complexity. Its the Internal Revenue Code that describes the allowed deductions and exemptions for determining taxable income on which the rate is to be applied that is the problem.
The Flat Income Tax fails to remove the legal jeopardy that every individual is placed under to prove what their taxable income is.
The Flat Income Tax fails to remove the complexity of the corporate and business income and payroll taxes requiring endless droves of tax accountants working more expending $200Billion trying to comply with an incomprehensible income tax code, an army of lawyers litigating with the IRS to the tune of another $200 billion, as well as the fines, penalties levied on the losers of such battles for even more. The Armey Flat Income Tax actually perpetuates that complexity, legal jeopardy and attendant cost of compliance for generations to come.
That is the reality of the Flat tax. the 1st $80k hit with the 15.3% payroll tax, with 19+% individual Flat Tax kicking in at $13K, and Increased Corporate taxation on all goods and services including the internet with the reduction of business deductionsincreasing the take. through that mechanism. That latter by the way is still collected from the individual through his purchases with after tax dollars no less.
The so called Flat Tax is less flat than even Reagan's 3 bracket tax, and the "Flat Tax" falls heaviest on middle income wage earners. You have a real winner here. Whats worse and Flat Tax proponents fail to tell you is that the supposed 17% Flat Tax starts in excess of 19% and "may" be decreased to 17% overtime at the pleasure of Congress as well as redefining income in a manner that everyone's income appears to be greater than present by removal of exemptions and deductions. Oh! instant make believe tax reductio/simplification n and you are buying into it just like they want of you.
H.R.1040 Sponsor: (introduced 3/9/1999).
Freedom and Fairness Restoration Act of 1999 - Title I: Tax Reduction and Simplification - Amends the Internal Revenue Code to impose a 19 percent tax (17 percent after December 31, 2000) on the taxable income of every individual.
Redefines "taxable income" to mean the amount by which wages, retirement distributions, and unemployment compensation exceed the standard deduction. Increases the basic standard deduction and includes an additional standard deduction for dependents. Includes in taxable income the taxable income of each dependent child under the age of 14. Provides for inflation adjustments.
(Sec. 102) with a Replaces the current tax on corporationstax on every person engaged in a business activity equal to 19 percent (17 percent after December 31, 2000) of the business taxable income of such person. Makes the person engaged in the business activity liable for the tax. (not the business as a separate entity as today, this seems to be a rather curious change with broad interpretations as earning a wage is a commercial[business activity])
Imposes a tax of 19 percent (17 percent after December 31, 2000) on the value of excludable compensation provided during the year by an employer for the benefit of employees. Makes the employer liable for the tax. (increases effective tax on employee wage by 50-100% or more depending on the mix of employee benefits and what is counted into the cost of them.}
(Sec. 103) Repeals: (1) numerous provisions relating to pension plans; and (2) provisions imposing a tax on any employer reversion from a qualified plan.
Revises requirements regarding transfers of excess pension assets.
(Sec. 104) Repeals from the Internal Revenue Code: (1) the part relating to alternative minimum tax; (2) the part relating to credits against tax; (3) the subtitle relating to estate and gift taxes; and (4) subject to exception, the chapter relating to normal taxes and surtaxes.
In fact the budget scoring required by law to assure revenue neutrality and phase in for all tax reform bills, for the "Flat Tax" gives a rather grim picture of Armey's plan especially since it does not do away with withholding nor the 15.3% payroll tax. Taking that into account it is actually much worse in the burden placed on the middle class than even the current income tax.
Flat Tax Valuations:
| Revenue Neutral Tax Rates for Alternative Allowances and Exemptions Under a Flat Tax | |||||
| Standard Allowances | Option 1 | Option 2 | Option 3 | Option 4 | Option 5 |
| Single | $13,100 | $13,100 | $ 6,550 | $ 6,550 | $0 |
| Joint | $26,200 | $26,200 | $13,100 | $13,100 | $0 |
| Head of Household | $17,200 | $17,200 | $ 8,600 | $ 8,600 | $0 |
| Dependent Exemption | $ 5,300 | $ 2,650 | $ 5,300 | $ 2,650 | $0 |
| Revenue Neutral Tax Rate | 19.9% | 19.4% | 16.8% | 16.3% | 13.1% |
Source: Congressional Budget Office, 1995.
Yah, a real winner! Not only does it fail to actually lower taxes as claimed. The complexity does not go away for business as the very definition of income changes for them while leaving the code entirely open to future tinkering to increase taxation behind the veil of price inflation.
Course, need I also point out the IRS and income tax remains alive and well under the ey Flat Income Tax. Not even a possibility of repeal of the 16th amendment or prohibition of the income tax is even considered under the Flat Tax proposal.
You are aware of course that the primary function of the income tax is for political control, not collection of Revenue. That is why it comes to us so highly recomended by Karl Marx and the pack of socialists and communists ever since.
You may keep yout Flat Income Tax, but take it elsewhere PLEASE!
Taxes - This term in its most extended sense includes all contributions imposed by the government upon individuals for the service of the state, by whatever name they are called or known, whether by the name of tribute, tithe, talliage, impost, duty, gabel, custom, subsidy, aid, supply, excise, or other name.By focusing soley on Americans' antipathy toward the IRS and the Income Tax, the NRST attempts to fulfill Marx's assualt on individual property rights by imposition of a sales tax on Real Property as though such property were merely a consumable good ( - Cargo shipped by sea, land or air) or service ( - The being employed to serve another.)The 8th section of Art. I, Const. U. S. provides, that "Congress shall have power to lay and collect taxes, duties, imposts, and excises, to pay," etc. "But all duties, imposts and excises shall be uniform throughout the United States."
In the sense above mentioned, taxes are usually divided into two great classes, those which are direct, and those which are indirect. Under the former denomination are included taxes on land or real property, and under the latter taxes on articles of consumption.
Sales Tax -- Any tax levied on, with respect to, or measured by, sales, receipts from sales, purchases, storage, or use of tangible personal property. 4 USC
Tangible personal property - Property that has physical substance and can be touched; Anything other than real estate or money, including furniture, cars, jewelry and china. Intangible property (example; a check account) lacks this physical quality.Real Property - Land and all the things that are attached to it. Anything that is not real property is personal property and personal property is anything that isn't nailed down, dug into or built onto the land. A house is real property, but a dining room set is not.
That which consists of land, and of all rights and profits arising from and annexed to land, of a permanent, immovable nature. In order to make one's interest in land, real estate, it must be an interest not less than for the party's life, because a term of years, even for a thousand years, perpetually renewable, is a mere personal estate...
The principal distinctions between real and personal property, are the following:
- Real property is of a permanent and immovable nature, and the owner has an estate therein at least for life.
- It descends from the ancestor to the heir instead of becoming the property of an executor or administrator on the death of the owner, as in case of personalty.
- In case of alienation, it must in general be made by deed and in presenti by the common law; whereas leases for years may commence in futuro, and personal chattels may be transferred by parol or delivery.
- Real estate when devised, is subject to the widow's dower personal estate can be given away by will discharged of any claim of the widow.
As NRST advocates also attempt to redifine "rent" as a "service", we should also take a closer look at the difference in legal definition of these two words as well:
Service - The being employed to serve another.If one were to click on the links provided for the fuller, more complex definitions, we would learn that there is a relationship between the terms "rent" and "service". However, it IS NOT that the landlord provides a service to the tenant!!! Quite the opposite!!! The tenant performs service to the landlord!!!!Rent - The consideration paid for the right to use and possess property.
A certain profit in money, provisions, chattels, or labor, issuing out of lands and tenements in retribution for the use. (In feudal times, in some cases, essentially an INCOME TAX placed on the tenant!!!)
So once again, NRST must completely mutilate centuries of English Common Law regarding Real Property and Property Rights (by totally reversing the fundamental definition of "service") in order to impose a different form of Marxist taxation on the American People.
From Marx's Communist Manifesto:
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, i.e., of the proletariat organized as the ruling class; and to increase the total productive forces as rapidly as possible.Of course, it is not the "proletariat" who are imposing these Marxist atrocities against individual property rights. It is the political elites in fascist collusion with business investor/landlord interests who stand to benefit from such change.Of course, in the beginning, this cannot be effected except by means of despotic inroads on the rights of property, and on the conditions of bourgeois production; by means of measures, therefore, which appear economically insufficient and untenable, but which, in the course of the movement, outstrip themselves, necessitate further inroads upon the old social order, and are unavoidable as a means of entirely revolutionizing the mode of production.
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.
This is just an atempt to get everyone involved since only the sheep involve themselves in the Income Tax.
And just what is wrong with getting everyone involved and aware for the true costs of government? How does one engage the electorate in exercising their responsibility of "Eternal Vigilance" when the damage is being done behind a veil of inflation.
You pay that bill, whether or not you file a tax return.
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 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.
McCulloch v. Maryland, 17 U.S. 316 (1819)
"The power of taxing the people and their property is essential to the very existence of government, and may be legitimately exercised on the objects to which it is applicable, to the utmost extent to which the Government may choose to carry it. The only security against the abuse of this power is found in the structure of the Government itself. In imposing a tax, the legislature acts upon its constituents. This is, in general, a sufficient security against erroneous and oppressive taxation."
If the the true burdens of government in the form of taxation are not perceived by the voters, how can they possibly be motivated to hold government accountable for excess.
"Let virtue, honor, the love of liberty ... be ... the soul of this constitution, and it will become the source of great and extensive happiness to this and future generations. Vice, ignorance, and want of vigilance, will be the only enemies able to destroy it."
-- John Jay, co-author of the Federalist Papers and, later, Chief Justice of the supreme Court
"Knowledge will forever govern ignorance; and a people who mean to be their own governors must arm themselves with the power which knowledge gives."
-- James Madison (Letter to W.T. Barry, August 4, 1822)
Early in the 19th century Professor Alexander Tytler described the dilemma of democracy in the following comments about ancient Athens:
"A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves money from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policies, always followed by a dictatorship."
"In general the art of government consists in taking as much money as possible from one class of citizens to give to the other."
--VoltaireA government which robs Peter to pay Paul can always depend on the support of Paul.
-George Bernard Shaw
As long as you insist on the governed remaining ignorant of the piper's bill, Government will continue to grow and not be held accountable.
LOLOL and you call this simple!!! Sheesh........
A 50 page bill, most of which does not impact the payer of the tax, the consumer, except as a flat 23% collected at the cash register, against the thousands of pages of statute & regulations that comprise the income/payroll tax system now in place or even as would be in place with a "Flat Tax". Remember it is Congress, still defining the exceptions and exemptions of what is business cost under the flat tax.
I'll take broadbased no exceptions flat rate retail sales tax any day.
Read:
FLAT TAX AS SEEN BY A TAX PREPARER
By: Vern Hoven
It's an eye opener.
With privatization of SS/Medicare, the NRST of HR2525 would be 14.91% of consumption. Much less than the 20/17% tax ala the Forbes/Armey Flat Tax.
Remember the Forbes/Armey Flat tax is still an income tax, still requires an IRS, and still taxes business passing on such taxes in higher prices to consumers, lower wages to employees, and lower returns to investors/retirees. It is, quite frankly a VAT combined with an individual income tax.
Issue: What Is the Best Way to Collect a Value Added Tax?
A value-added tax (VAT) generally is a tax imposed and collected on the value added at every stage in the production and distribution process of a good or service. Although a VAT may be computed in any of several ways, the amount of value added generally can be thought of as the difference between the value of sales and purchases of a business. (e.g. Revenues - Costs = Taxable Business Income)
Subtraction-Method VAT. Under the subtraction method, value added is measured as the difference between a business's taxable sales and its purchases of taxable goods and services from other businesses. At the end of the reporting period, a rate of tax is applied to this difference in order to determine the tax liability. The subtraction method is similar to the credit-invoice method in that both methods measure value added by comparing sales to purchases that have borne the tax.
The subtraction method differs from the credit-invoice method principally in that the tax rate is applied to a net amount of value added (sales less purchases) rather than to gross sales with credits for tax on gross purchases. A business's tax liability under the credit-invoice method relies on the business's sales records and purchase invoices, while the tax liability under the subtraction method may rely on records that the taxpayer maintains for income tax or financial accounting purposes.
The flat tax is a VAT. None other than the father of the flat tax, Robert Hall of Stanford University (along with Alvin Rabushka), in his 1995 Ways and Means Committee testimony said, "The Hall-Rabushka flat tax is a value-added tax."
Which was pointed out again in additional hearings in April of 2000:
http://waysandmeans.house.gov/fullcomm/106cong/4-11-00/4-11kotl.htm
"Robert Hall, one of the originators of the proposal(Flat Tax), who describes his Flat Tax as, effectively, a Value Added Tax. A value added tax taxes output less investment (because firms get to deduct their investment.)"
"The Flat Tax differs from a VAT in only two respects. First, it asks workers, rather than firm managers, to mail in the check for the tax payment on that portion of output paid to them as wages. Second, it provides a subsidy to workers with low wages."
The Flat Tax; Chapter 3, by Robert Hall and Alvin Rabushka
| In our system, all income is classified as either business income or wages (including salaries and retirement benefits). The system is airtight. Taxes on both types of income are equal. The wage tax has features to make the overall system progressive. Both taxes have postcard forms. The low tax rate of 19 percent is enough to match the revenue of the federal tax system as it existed in 1993, the last full year of data available as we write. Here is the logic of our system, stripped to basics: We want to tax consumption. The public does one of two things with its income—spends it or invests it. We can measure consumption as income minus investment. A really simple tax would just have each firm pay tax on the total amount of income generated by the firm less that firm’s investment in plant and equipment. The value-added tax works just that way. But a value-added tax is unfair because it is not progressive. That’s why we break the tax in two. The firm pays tax on all the income generated at the firm except the income paid to its workers. The workers pay tax on what they earn, and the tax they pay is progressive. To measure the total amount of income generated at a business, the best approach is to take the total receipts of the firm over the year and subtract the payments the firm has made to its workers and suppliers. This approach guarantees a comprehensive tax base. The successful value-added taxes in Europe work this way. The base for the business tax is the following: Total revenue from sales of goods and services less purchases of inputs from other firms less wages, salaries, and pensions paid to workers less purchases of plant and equipment The other piece is the wage tax. Each family pays 19 percent of its wage, salary, and pension income over a family allowance (the allowance makes the system progressive). The base for the compensation tax is total wages, salaries, and retirement benefits less the total amount of family allowances. |
FLAT TAX, VAT TAX, ANYTHING BUT THAT TAX; Duke Law Magazine, Spring 96:
CONSUMPTION TAX PROPOSALS; 1996 Deloitte & Touche LLP
The Flat Tax is a VAT even as the current income/payroll tax structure now in place is a subtraction method VAT, in that it is a levy imposed on businesses at all levels of production, it is passed on to the consumer hidden in the price of goods and services.
As long as government is able to play a shell game with hiding taxes from the Voter(i.e. individual) it can rely on the old maxim:
A government which robs Peter to pay Paul can always depend on the support of Paul.
-George Bernard Shaw
and keep right on growing without bound.
The NRST is unconstitutional.
The NRST is an excise or duty, An indirect tax, on the conduct of commerce administered by the States.
It is levied only on the purchaser of goods or services, (not the original owner) and is applied purely as an excise as established in Article I Section 8 of the Constitution.
There is no impediment on the levy of an excise on purchasers of new construction that the NRST lays. Your partial definitions and analysis as regards ownership of land simply does not apply as it is the customer, and receiver of property being sold that pays the tax, not the owner. The Purchaser of property does not gain lawful title to land until the completion and perfection of title can occur and that does not happen until full payment is made, including any excises or duties on the commission and contract that is engaged in.
See: The Fair Tax Alternative to the IRS: Is it Constitutional
Which has been amply debated (Pro & Con) in the above article on FR.
Constitution for the United States of America:
James Madison, Federalist #39:
James Madison, Federalist #45:
James Madison, Elliots Debates Vol 3 p128:
James Wilson, Pennsylvania Ratifying Convention
4 Dec. 1787 Elliot 2:466--68
The Records of the Federal Convention of 1787
(Farrand's Records)
James Mchenry before the Maryland House of Delegates.
Maryland Novr. 29th 1787--
Appendix A, CXLVIa, page 149, S9.
"Convention have also provided against any direct or Capitation Tax but according to an equal proportion among the respective States: This was thought a necessary precaution though it was the idea of every one that government would seldom have recourse to direct Taxation, and that the objects of Commerce would be more than Sufficient to answer the common exigencies of State and should further supplies be necessary, the power of Congress would not be exercised while the respective States would raise those supplies in any other manner more suitable to their own inclinations --"
A LAW DICTIONARY
by John Bouvier, Revised Sixth Edition, 1856:
"COMMERCE, trade, contracts.
The exchange of commodities for commodities; considered in a legal point of view, it consists in the various agreements which have for their object to facilitate the exchange of the products of the earth or industry of man, with an intent to realize a profit. Pard. Dr. Coin. n. 1. In a narrower sense, commerce signifies any reciprocal agreements between two persons, by which one delivers to the other a thing, which the latter accepts, and for which he pays a consideration; if the consideration be money, it is called a sale; if any other thing than money, it is called exchange or barter. Domat, Dr. Pub. liv. 1, tit. 7, s. 1, n. "
A LAW DICTIONARY
by John Bouvier, Revised Sixth Edition, 1856:
DUTIES. In its most enlarged sense, this word is nearly equivalent to taxes, embracing all impositions or charges levied on persons or things;
A LAW DICTIONARY
by John Bouvier, Revised Sixth Edition, 1856:
EXCISES. This word is used to signify an inland imposition, paid sometimes upon the consumption of the commodity, and frequently upon the retail sale.
How's it goin ole buddy!! Long time no see your kind words!!
Others WILL read it AND comprehend it however and THAT certianly makes it worth the effort!
Thanks!
I have often wondered why some prefer to deliberately pay endless interest to banks and expend countless dollars in unprofitable and useless costs only to avoid paying a fraction of that expenditure (i.e. business cost) in income taxes. I guess it makes sense to one who believes businesses do not pass there costs of doing business on to their customers, employees and investors, or that he himself ends up paying the tax bill even more in his expenditures.
I guess he is one of that small percentage of folks that Lincoln talked about which can be fooled "all of the time." Of Course P.T. Barnum expressed it in other less kind words.
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