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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: John123

Whats your point??? A flat Tax and a NST are not the same thing. I too am for NST. A flat tax would still require the tax police to make sure that people pay what they owe.


461 posted on 08/02/2004 8:55:27 AM PDT by Coroner
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To: Your Nightmare; EternalVigilance
...to tell you what I paid in state sales taxes, which, for all but the most anal retentive spenders, would be virtually impossible.

Or the taxes you paid for the corporations, which are hidden/built-in to the purchasing price of every single item you have ever bought.

Your opposition to the FairTax has failed to include the benefits derived from casting complete sunshine into the hidden tax system we all labor under now, and routing out the duplicative and deceptive taxation that goes without any amount of scrutiny under current systems.

462 posted on 08/02/2004 9:01:44 AM PDT by Agamemnon
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To: Froggie
I don't know which state you're in or if your state has a sales tax situation as convoluted as mine. I also don't know what kind of business you ran, so don't know if you ever ran into the mess I've dealt with.

Manufacturing, sales for resale, sales outside of the taxing authority... Exempt business to business transactions & people will say it's unfair & will call it corporate welfare. Charge a sales tax on business to business transactions, you build in multilevel taxation & taxes paid on taxes.

We gonna charge sales tax on real estate? If we are, the price of real estate goes up overnight & the correction would be ugly.

Manufacturing gadgets is more labor intensive & has lower raw material costs than making widgets, so our new economy encourages manufacturing gadgets over widgets. Raw material owning manufacturing companies gain an advantage over the companies that need to purchase raw materials. Picture fewer businesses & larger ones. A car company that buys a steel company will have a natural advantage over car companies that don't own one, unless, we go the business to business transaction exemption route.

Some businesses do well, some adjust, some move elsewhere & some go out of business. It's the way of the world. Think our government responds to it in any way or do they keep their hands off & let the dust settle in whatever way it settles?
463 posted on 08/02/2004 9:02:30 AM PDT by GoLightly
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To: Coroner

My apologies. We were talking about apples and oranges here.


464 posted on 08/02/2004 9:05:53 AM PDT by John123 (Who is cuter, Kerry in a blue bunny suit or the Breck Girl?)
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To: GoLightly

All great reasons to stop taxing business.



465 posted on 08/02/2004 9:05:58 AM PDT by EternalVigilance (John Kerry's America: "Weaker, Deader, Dumber")
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To: Agamemnon
Or the taxes you paid for the corporations, which are hidden/built-in to the purchasing price of every single item you have ever bought.
First, I was commenting on a post that stated the bulk of our current tax burden is hidden. This is just not true. Second, the incidence of corporate taxes is a matter of debate. I believe that consumers pay some of the corporate tax in higher prices but not nearly the full amount.
466 posted on 08/02/2004 9:11:20 AM PDT by Your Nightmare
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To: dubyaismypresident
VAT scares me but NRST sounds like a good replacement for the IRS.

The NRST proposal that's been festering in the halls of Congress is nothing but a grotesque distortion and convoluted misrepresentation of economic theory. Advocates of this "plan" clearly do not trust the American People to understand the true ramifications, and are poised to agressively shove a false paradigm down their dumbed-down throats. IMHO, the minimum response to such a beligerant abuse of power should be the time-honored American tradition of tar-and-feathering such dishonest political scalawags.

467 posted on 08/02/2004 9:13:11 AM PDT by Willie Green (Go Pat Go!!!)
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To: GoLightly

I already paid taxes on my savings. Switching to a sales tax would mean I get to pay taxes on that same money again. Yeah, sounds fair to me, not.

Then you should be very unhappy to learn that you get hit again for another 20-25% out of your purchases today under the income/payroll tax system.

The following article covers the mechanism on how the current Federal 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 24% in the article considers only those factors actually paid to government out of imposititions on business in complying with the income, payroll, excise & tariff tax laws.

I refer you to the section of the following article about the Income/Payroll tax system and its impact on our economy "A. Hidden Upstream Taxes. " paragraph 39.

"[39] Dr. Dale Jorgenson, Chairman of Harvard University's Economics Department, believes that the price of goods and services are inflated by about 20 percent or more by upstream taxes consumers ultimately bear. In a recent paper Dr. Jorgenson estimated the built-in taxes contained in the price of goods and services. /22/ In the chart above, he quantified the hidden component of tax, estimating that producer prices would fall on repeal of upstream taxes an average of about 22 percent."

Looking at the accompanying chart, the range of values from industry to industry appears to be about 12-25%.

Economists Gary and Aldonna Robbins of the Texas-based Institute for Public Policy examined the case of dry cleaning a shirt, with a particular eye toward uncovering the hidden costs of taxes in price.

The Robbin's attributed over 33.6% of "consumer prices" to be due to federal taxation passed on to the customer.

The Federal Tax System
http://www.cbo.gov/showdoc.cfm?index=2125&sequence=0&from=1#pt1

From the Table 1 we may extract the proportionate contributions of each sector of taxes as they contribute to consumer price for the year 2000.

Those tax components which will not change prices as a consequence of enactment of HR2525

============================

Adjust for the approximate reduction of interest & cost of tax compliance (

Adjust for a conservative $800 billion cost of tax compliance, (The Flat Tax; Hall & Rabushka, '95,What the Income Tax Costs the American People: quoting James L. Payne estimates 65cents for each dollar of revenue collected).

Estimated change in consumption prices as consequence of enactment of a National Retail Sales Tax, repealing all business income and payroll taxes:

33.6*(1386.5/1945) = 23.9% reduction in consumption prices

Which more than verifies the Jorgenson empirical study of 22% fall in producer prices.

The two sources are in reasonable agreement, and I see 20-25% a reasonable value to expect retail prices to fall, not only for customers here in the United States, but in our exports as well making them far more competitive on international markets.

468 posted on 08/02/2004 9:14:27 AM PDT by ancient_geezer (Equality, the French disease: Everyone is equal beneath the guillotine.)
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To: dubyaismypresident

Oh YES YES YES!!

I will bake the man a cake if it goes through.

(Can you tell I am being taxed to death??)


469 posted on 08/02/2004 9:14:57 AM PDT by najida (Without pack-rats, there wouldn't be any antiques.)
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To: Your Nightmare

You missed the point. Keep in mind I too am pessimistic we will ever see true tax reform. But you made a statement that misses the important point.

You said:

"I can tell you exactly how much I paid in income and payroll (the bulk of our tax load) taxes last year. I would have to add up every purchase I made last year to tell you what I paid in state sales taxes, which, for all but the most anal retentive spenders, would be virtually impossible."

The point you missed is this:

As an individual you would not have to keep records of sales taxes just as you are not required now to keep such records. Therefore, the proposed system would eliminate the need for you to keep records of your income for TAX PURPOSES. Surely everyone sees that this would make life simpler.

As a businessperson, you would keep records of sales taxes just as you do now as an addon to all sales (you pass on taxes through sales).

You responded to someone that said current taxes are hidden. Yes they are. In every product we buy, there are a series of taxes that are imposed from obtaining production materials, through production, through payroll taxes and so on. Each of these taxes are part of the price of the final product and no one can know exactly what portion of the final price is due to taxes but it is known to be huge.


470 posted on 08/02/2004 9:15:47 AM PDT by Hostage
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To: Willie Green

Gee Willie, I thought you'd like it as it would make American products more competitive and it would tax imports. Unlike today where American products are at a disadvantage due to corporate taxation.


471 posted on 08/02/2004 9:19:55 AM PDT by NeoCaveman (Kerry lied, good men died. Go to www.kerrylied.com)
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To: Willie Green
The NRST proposal that's been festering in the halls of Congress is nothing but a grotesque distortion and convoluted misrepresentation of economic theory. Advocates of this "plan" clearly do not trust the American People to understand the true ramifications, and are poised to agressively shove a false paradigm down their dumbed-down throats. IMHO, the minimum response to such a beligerant abuse of power should be the time-honored American tradition of tar-and-feathering such dishonest political scalawags.

As per your usual, your rant contains not a single ounce of substance.

472 posted on 08/02/2004 9:23:12 AM PDT by EternalVigilance (John Kerry's America: "Weaker, Deader, Dumber")
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To: phil_will1
Our system really does work.

Granted, but active involvement of everyone - right down to "Joe Sixpack" - is essential. For all their inherent stupidity, the dims know this and strive for a high turnout rate.

Our Founding Fathers were some of the wisest and most foresightful men ever to congregate and create a republic, but I'd be willing to bet that even they never anticipated such a massive number of non-participants in the population.

473 posted on 08/02/2004 9:25:42 AM PDT by Marauder (Show me a liberal and I'll show you a sick individual.)
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To: Your Nightmare

1) Not every man woman and child living in the US will get the compensation (actually an allowance, they can spend it or keep it)for taxes imputed to be paid up to the poverty level, only LEGAL US residents, which means millions of illegals now paying little will pay more.

2) As far as figuring out how much taxes you will have paid under the new system, just keep your receipts with the tax paid shown on them, and add them up periodically.

3) Do you like our current system and do you think it is fair now?


474 posted on 08/02/2004 9:25:46 AM PDT by rolling_stone
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To: Hostage
As an individual you would not have to keep records of sales taxes just as you are not required now to keep such records. Therefore, the proposed system would eliminate the need for you to keep records of your income for TAX PURPOSES. Surely everyone sees that this would make life simpler.
How much did you pay in state sales taxes last year?



You responded to someone that said current taxes are hidden. Yes they are.
I responded to someone who said the bulk of our current burden is hidden. No they aren't.



Each of these taxes are part of the price of the final product and no one can know exactly what portion of the final price is due to taxes but it is known to be huge.
You need to look up "incidence of corporate taxes" on Google. No one is sure who bares the burden of corporate taxes (consumers, capital holders, or labor).
475 posted on 08/02/2004 9:27:16 AM PDT by Your Nightmare
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To: Your Nightmare

Still awaiting your positive alternative.


476 posted on 08/02/2004 9:29:49 AM PDT by EternalVigilance (John Kerry's America: "Weaker, Deader, Dumber")
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To: TexasCowboy
"I'm not going to be any better off as far as the State crap is concerned, but a LOT better off with the federal mess."

Many states have said if the Fair Tax HR 25 were inacted they would most likely to the same, especially since they will be the tax collector.

477 posted on 08/02/2004 9:30:05 AM PDT by smokeyb
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To: Willie Green

*After 4 years of these discussions, still awaiting your positive alternative...

*crickets*


478 posted on 08/02/2004 9:30:58 AM PDT by EternalVigilance (John Kerry's America: "Weaker, Deader, Dumber")
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To: dubyaismypresident

Game, set, match.


479 posted on 08/02/2004 9:31:43 AM PDT by MattinNJ (It will be a Dubya landslide. Hillary will see to it.)
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To: dubyaismypresident

We all know the Democrats will immediately cry "foul" because the poor and middle class will be most affected. How will they redistribute the wealth?


480 posted on 08/02/2004 9:32:00 AM PDT by TommyDale ("We're going to take things away from you on behalf of the common good." --Hillary Clinton)
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