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REPUBLICANS PLAN PUSH FOR ELIMINATION OF IRS
The Drudge Report ^ | 8/1/04 | Drudge

Posted on 08/01/2004 6:08:53 PM PDT by NeoCaveman

A domestic centerpiece of the Bush/GOP agenda for a second Bush term is getting rid of the Internal Revenue Service, the DRUDGE REPORT has learned.

The Speaker of the House will push for replacing the nation's current tax system with a national sales tax or a value added tax, Hill sources tell DRUDGE.

"People ask me if I’m really calling for the elimination of the IRS, and I say I think that’s a great thing to do for future generations of Americans," Speaker of the House Dennis Hastert explains in his new book, to be released on Wednesday.

"Pushing reform legislation will be difficult. Change of any sort seldom comes easy. But these changes are critical to our economic vitality and our economic security abroad," Hastert declares in SPEAKER: LESSONS FROM FORTY YEARS IN COACHING AND POLITICS.

"“If you own property, stock, or, say, one hundred acres of farmland and tax time is approaching, you don’t want to make a mistake, so you’re almost obliged to go to a certified public accountant, tax preparer, or tax attorney to help you file a correct return. That costs a lot of money. Now multiply the amount you have to pay by the total number of people who are in the same boat. You can’t. No one can because precise numbers don’t exist. But we can stipulate that we’re talking about a huge amount. Now consider that a flat tax, national sales tax, or VAT would not only eliminate the need to do this, it could also eliminate the Internal Revenue Service (IRS) itself and make the process of paying taxes much easier."

"By adopting a VAT, sales tax, or some other alternative, we could begin to change productivity. If you can do that, you can change gross national product and start growing the economy. You could double the economy over the next fifteen years. All of a sudden, the problem of what future generations owe in Social Security and Medicare won’t be so daunting anymore. The answer is to grow the economy, and the key to doing that is making sure we have a tax system that attracts capital and builds incentives to keep it here instead of forcing it out to other nations."


TOPICS: Business/Economy; Front Page News; Government; Politics/Elections
KEYWORDS: fairtax; gop; gwb2004; irs; nrst; taxreform
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To: phil_will1; All
Leaders who find themselves with governmental power over a servile people will be quick to conclude that such a people exist to serve them.”

Sounds like a certain Presiential candidate, doesn't it?

I think the President can sell this if he wishes to. It is a BOLD plan, one that would bring infinite good to the people. It needs to be spoken of in an equally bold and visionary way. It needs to be presented in the same tone of liberation G.W. speaks in when refering to the Middle East.

If they get caught up in the economics of the plan the people will turn their ear away. If explained that this will concentrate power back to US, as well as the practical gains of keeping more of our own money, it's a huge win.

321 posted on 08/01/2004 9:06:05 PM PDT by Soul Seeker
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To: undeniable logic

"Interest rates are determined by supply-demand forces and it is not clear that the assumption holds. In fact, it is not easy to say precisely what would happen, but I personally doubt that taxable rates will drop to nontaxable rates. I believe that previously taxable rates will drop substantially when they become non-taxable, but to a level higher than current non-taxable rates. And current non-taxable rates will rise slightly until they meet.

Actually, they won't meet, because if you could choose between a AAA insured municipal and a federal bond at the same rate, you would always choose the federal for liquidity reasons."

-- A taxable bond with the same risk rating as a non-taxable bond WILL meet. If not, explain to me why a corporate bond issuer would pay out more in interest than he had to? If they were callable, he would drop his rates in a heartbeat.


322 posted on 08/01/2004 9:06:55 PM PDT by Remember_Salamis (Freedom is Not Free)
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To: arielb

How about a state? There are plenty, including Florida.


323 posted on 08/01/2004 9:08:06 PM PDT by ovrtaxt (The Fleet Center? Isn't Fleet an enema company?)
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To: arielb
it will also create lots of opportunities for fraud and abuse.

There will be fraud and abuse with any tax system.

324 posted on 08/01/2004 9:10:25 PM PDT by alnick
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To: Betaille
Bush didn't say that he supports this. This is just an excerpt from Hasterts book. Why is drudge saying that this is Bush?

Because Drudge is not a journalist and makes his money from hits to his website and thus writes headlines designed to appeal to a certain long suffering segment of Republicans who tend to eat this stuff up.

325 posted on 08/01/2004 9:10:54 PM PDT by Destro (Know your enemy! Help fight Islamic terrorism by visiting www.johnathangaltfilms.com)
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To: mabelkitty

I'll see yer tax simplification and raise ya an elimination of the IRS... ping!!! (ha ha ha)


326 posted on 08/01/2004 9:11:07 PM PDT by SierraWasp (You better believe it! America IS exceptional!! I will always believe in American exceptionalism!!!)
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To: Remember_Salamis
You don't have to stash savings under a mattress to take a hit. Small Business Owners either don't have quite as easy access to a 401(k), for cost reasons, or have savings substantially higher than that permitted by a 401(k). Roth IRAs, which many people have because they are better under an income tax system, suffer the same problem, because people pay tax up front to avoid future taxes - if there are no future taxes, then people paid unnecessary taxes upfront.

I brought up municipal bonds before and I will refer to them again. No wise investor will invest in municipal bonds in a tax-exempt pension. We know that the municipal bond market is about 2 trillion dollars, so right away we know that there is at a minimum 2 trillion dollars in savings by people who have as you put it, "unforunately stashed their savings under the matress." 2 trillion dollars is not insignificant.

We know that many seniors have a lot of money held in CDs, all this money falls in the same category. What about capital tied up in investment assets, such as real estate, etc. At some point, that money will be spent and taxed and once that happens it has been double taxed, because without switching to the NRST, no federal sales tax would have been paid and no additional income tax is required.

I never understood this one point. At least to me, it is obvious that a lot of wealth will be double taxed. Many people who fall into this category will absolutely be opposed to switching to the NRST. Why will freepers not at least recognize the obvious? My goal is not to bash the NRST, I have stated many times that I strongly prefer the NRST. I just do not believe that with the problems I have discussed it will ever have the support required for passage and am trying to bring about a discussion that could lead to at least a partial solution to the problem.

327 posted on 08/01/2004 9:11:18 PM PDT by undeniable logic
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To: Petronski
There are plenty of poor families and middle class families who don't pay any federal tax right now

Yes they do. They pay the taxes of the companies from whom they buy their goods and services. The hidden tax.

328 posted on 08/01/2004 9:11:31 PM PDT by xrp
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To: arielb

Well said - we are being plucked like suckers by Drudge and his "news".


329 posted on 08/01/2004 9:14:01 PM PDT by Destro (Know your enemy! Help fight Islamic terrorism by visiting www.johnathangaltfilms.com)
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To: dubyaismypresident
VAT!!! Another stupid useless UN-AMERICAN concept from the old country!!!
330 posted on 08/01/2004 9:14:23 PM PDT by SierraWasp (You better believe it! America IS exceptional!! I will always believe in American exceptionalism!!!)
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To: Remember_Salamis
They won't meet because they are less liquid. I am currently doing research on municipal bond spreads. The average buy-sell spread, even for a pre-refunded bond (this is even less risky than a federal bond), is around 2 percent. Knowing that if you want to sell the bond, you take a 2 percent hit, why would you accept the same rate for a federal bond where the spread is practically nil? You wouldn't.

In reference to your example, a corporate bond issuer will pay out more interest, because he has no choice - people charge a premium for illiquidity, and corporate and municipal bonds are simply less liquid then federal bonds.

331 posted on 08/01/2004 9:15:49 PM PDT by undeniable logic
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To: undeniable logic

"I never understood this one point. At least to me, it is obvious that a lot of wealth will be double taxed. Many people who fall into this category will absolutely be opposed to switching to the NRST. Why will freepers not at least recognize the obvious? My goal is not to bash the NRST, I have stated many times that I strongly prefer the NRST. I just do not believe that with the problems I have discussed it will ever have the support required for passage and am trying to bring about a discussion that could lead to at least a partial solution to the problem."

Suppose I said to you "Undeniable Logic, I have a plan which will double the value of your investments over 24 months. That's the good news. The bad news is you will have to pay taxes on a small portion of that increase."

And your answer would be?

Those with substantial savings, which are appropriately invested, will be huge WINNERS, not losers, under the FairTax.


332 posted on 08/01/2004 9:17:22 PM PDT by phil_will1
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To: Anticommie

When are you going to pay fines for cheating on taxes?


333 posted on 08/01/2004 9:17:33 PM PDT by Anticommie
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To: nmh

You will still need to inform the government how much you are making...still have to file forms....still have a IRS to keep track of it....
Businesses already have the accounting systems in place as they collect state taxes already....no real additional expense for them to change their computers from collecting 7% to 20% or whatever the rate becomes.
It's be very easy to people to make income "off the books" and not have it show up on a W2 - but much harder to go buy your groceries/toys/whatever without paying the tax.
And with this sales tax you can control your tax by controlling your spending...


334 posted on 08/01/2004 9:18:56 PM PDT by Froggie
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To: nmh

And with Flat income tax, the business still has to file income forms on employees - and who is going to do that -- yep, accountants!!


335 posted on 08/01/2004 9:20:19 PM PDT by Froggie
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To: dubyaismypresident

If a national sales tax was used how do you acount for the heinz's,kennedy's, and gates of the world who already have their considerable nest eggs? How do you account for interest on their billions? I would be real scared about the possiblity of them turning into a new breed of emperor and would insist on the elimination of all these trust funds and would also insist on a severe death tax for these billionaires and some sort of limitation on before death transfers. A sales tax structure could be the underpinnings of a new rulling class, far worse than anything we have now if such money is allowed to accumulate. Just some things which would have to be taken into account in my view. I'm imagining Little George Soros the VIII in 2050 and its causing me chills.


336 posted on 08/01/2004 9:25:43 PM PDT by foto
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To: spokeshave

Hard to believe that Russia has a more conservative tax policy than the USA. But it does.


337 posted on 08/01/2004 9:26:12 PM PDT by Mad_Tom_Rackham (Havoc be upon them!)
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To: phil_will1
Suppose I said to you "Undeniable Logic, I have a plan which will double the value of your investments over 24 months. That's the good news. The bad news is you will have to pay taxes on a small portion of that increase."

And your answer would be?

Those with substantial savings, which are appropriately invested, will be huge WINNERS, not losers, under the FairTax.

No question, under your scenario, those with substantial savings would be winners. But you are assuming that huge gains are guaranteed - they aren't. They may be 99% likely, but not guaranteed. The double taxation is guaranteed. So the real question is, for someone who has substantial savings (this is not me, I am a student), are you willing to risk the guaranteed double taxation for a likely event of substantial capital appreciation?

This is an excellent question, and one that should be asked to people like my father. If their answer is NO, even if it is illogical, it should be respected.

I do want to state for the record that I believe that under the NRST, the economy will surge, markets will go up, and almost everyone will be better off - I am just bringing up some of the reasonable concerns that I know many people have that should be addressed, and it may very well be the case that your argument, as modified by me, fairly addressed the issue. I don't know, because I am not one of those that has to decide, because I don't have any wealth yet.

338 posted on 08/01/2004 9:27:16 PM PDT by undeniable logic
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To: dubyaismypresident

This was bandied about 10 years ago during the Gingrich Revolution. Nothing new here. [Yawn]


339 posted on 08/01/2004 9:31:59 PM PDT by Spirochete
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To: dubyaismypresident

I'm really disappointed to see so many Freepers getting excited over this. Rather than wasting our efforts trying changing the way taxes are collected, I'd much rather see Bush and the GOP put their efforts into actually REDUCING the size of the bloated federal budget...shrink government down first, then start making real tax reductions.


340 posted on 08/01/2004 9:42:19 PM PDT by Capitalism2003 (America is too great for small dreams. - Ronald Reagan, speech to Congress. January 1, 1984.)
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