Tax Reform Panel Picks Apart FairTax Proposal

Members of the President's Advisory Panel on Federal Tax Reform on May 11 expressed concerns over the FairTax national retail sales tax, a plan that has emerged as an alternative with a major grass-roots push.

Panel chair Connie Mack, vice chair John B. Breaux, and other members worried the plan would be difficult to enforce, would be regressive, and would require a high rate in order to take in enough money to fund the government.

Breaux raised concerns that the proposed 23 percent (tax-inclusive) rate would not be sufficient to raise the revenue necessary to fund the government. The Joint Committee on Taxation estimated that it would take as much as a 57 percent (tax-exclusive) rate to be revenue-neutral. Further, Breaux said he thought exemptions that would be carved out to make the sales tax progressive would also complicate it.

Mack, who raised concerns similar to his fellow panelists', said he was "intrigued" by the plan. "But if it's such a great idea, why haven't other political entities around the world pursued it?" he asked.

Americans for Fair Taxation Executive Director Tom Wright emphasized that the plan emerged after "thorough academic research" and "thorough polling" The strong grass-roots push has resulted in some of the group's 600,000 members appearing at each of the panel's hearings and has inspired a large comment-writing campaign to the panel in support of the plan.

Sales tax advocates were among the 20 witnesses who gathered before the panel for a full day of testimony on tax reform proposals. Although the group has held several other hearings in Washington and around the country, the May 11 meeting was its first hearing on specific reform plans since Bush appointed the panel in January. The panel has been charged with identifying tax reform proposals that are progressive, encourage charitable giving and home purchases, and are revenue-neutral. The proposals are due by July 31.

Among the tax replacement and reform plans presented to the panel were the value added tax, consumption-based tax, and the flat tax, as well as proposals that would use the current income tax as the foundation.

Witnesses generally claimed that theirs was the fairest, simplest, most flexible, most transparent revenue-neutral proposal that would improve economic growth and savings while meeting the president's criteria of encouraging charitable giving and home buying. Witnesses presenting consumption-based plans praised their overhaul as taking millions of low-income taxpayers off the rolls, being easy to transition to on a worldwide basis, and including safeguards to prevent new loopholes that would result in increased complexity down the road.

Tax reform panel members, who agree the current tax system needs to be fixed, grilled witnesses without revealing whether they will ultimately endorse a consumption- or income-based tax or a different mixture of the two.

The turndown in real wages could also have alot to do with the anti-savings anti-buisness envionment with lower per-capita savings and investment reducing growth of technological productivity that clearly is the result of ever growing government and rising income/payroll tax burdens on business and individuals after 1990.

Refer

Grandfather Family Income Report - pg 1 - by MWHodges

Rate of Personal Saving Plunges 100% - to new record low - $985 Billion missing

If families have less inflation-adjusted income, despite mother working, then family personal savings must suffer as a consequence - unless, of course, families reduce their consumption. But, families increased consumption spending and, to cover this, they reduced savings to historic lows and increased household debt to historic highs. Dangerous Trend !!!

The chart at the left shows a 45 year trend of that part of disposable income that has been saved - - called 'personal savings rate'.

Note: prior to 1970 the rate of personal savings was rising smartly - - as were family incomes per the first chart above - despite most families then having but one wage earner while also living without increasing debt ratios (chart below).

Then, family incomes stagnated - - and the saving ratio stopped rising as seen in the left chart - - then started falling rapidly - - plummeting since 1992. As of June 2005, savings were at an all-time record low of zero percent !! $985 Billion in savings missing in 2004 compared to savings ratio of 2 decades ago. (realized capital gains, not calculated in the savings rate, mitigate this chart somewhat if one wishes to call such savings - - but the trend with and without is at all-time record lows).

While Household Debt Rises:

CONSUMER DEBT AND HOUSEHOLD DEBT
- soaring debt as another consequence -

"The consumer balance sheet is stretched. Payments on consumer debt (mortgage loans, credit cards, and car loans or leases) are at an all-time high, as a percentage of disposable income." Robert Rands, The Vanguard Group, Wellington Management.

The left chart, from America's Total Debt Report, shows household debt as a share of national income from 1963 to today.

Note the left side of the chart - - showing the household debt ratio was declining before 1970 - which means household debt was growing slower than growth of the total economy.

We recall from the above charts that prior to 1970 family incomes were rising - but thereafter growth stopped for the following 25+ years.

The left chart shows that family incomes stopped rising (1970) as household debt ratios stopped declining (at 53% of national income), then debt started upward, slowly - then took off upward like a rocket - to a historic record high debt ratios today (at 106% of national income, or $10.3 trillion - up 11.2% over prior year).

Since household debt has risen at rates 90% faster than growth of the economy since the late 1960s when real median family incomes stopped rising, such suggests real equity & savings are not the driving force of economic size - - it is all debt driven.

And Manufacturing Declines with an ever growing and burdensome income/payroll tax system hitting American Industry:

MANUFACTURING DECLINE

mfg-worker.gif (4051 bytes) Some of the best paying jobs in America, with the best benefits, used to be in the manufacturing sector - - a period when America produced more than it consumed, exporting to the world with positive trade balances. No longer!!

The left chart shows the trend of the number of manufacturing workers as a percentage of all U.S. employees (non-agriculture) - - from 26% in 1960 to 10% in 2004, a 60% drop in the manufacturing ratio.

On a GDP basis the trend is the same negative > the U.S. manufacturing base declined from 30.4% of GDP in 1953 (when we had a trade surplus) to 12.7% in 2003 - a 58% drop in the manufacturing share of GDP - and more is foreign-owned than before. (Bureau Economic Analysis table b-12, Economic Report of President, appendix table)

As shown by the merchandise trade chart, whereas in 1960 U.S. goods manufacturing produced a $5 billion trade surplus - - 2004 merchandise trade had a $666 billion deficit. A powerful negative swing.

Bottom-line > manufacturing base shrinkage is a major negative regarding trade balance, and a major negative impact on U.S. economic and national security independence and future living standards.

Note the down-sloping trend of this chart far pre-dates the opening of China as a major world manufacturer. According to the Chinese Statistical Yearbook and economist Steve Roach of Morgan Stanley (4/05), the average Chinese manufacturing worker made 12,496 yuan in 2003, which translates into about US$29 per week. By contrast, average weekly earnings of US manufacturing workers amounted to $636 per week in 2003. With Chinese manufacturing wage levels only 4.5% of their US counterpart, my back-of-the envelope calculations suggest it would take about 20 years of sustained 15% annualized Chinese wage inflation to close half the wage gap with the US. Don’t kid yourself. Even with Chinese wage inflation, the economics of the labor arbitrage between the US and China remain compelling for as far as the eye can see.

Grandfather Tax Report - MWHodges

FOR 5 MONTHS EACH YEAR

That's 258% more months 'working for government' than it used to be, as shown in the chart.

The government taxes when you earn it, taxes you when you save it, taxes you when you invest it, taxes you when you spend it, and, when you die, they tax what's left over. What did they leave out?

5.1 months working for taxes is 43% of a year. In 1776 Thomas Paine argued that if a king demanded 50% in taxes, we wouldn't pay it. We are nearly there.

Who said the 'era of big government is over?'

TAXES INCREASE -
SAVINGS PLUMMET

This chart shows a relative comparison of personal taxes (percent personal income) to personal savings (percent disposable income).

The red curve on the chart is for personal taxes, where the ratio of taxes to personal income increased from 1959 and soared in the latter 1990s the ratio soared to near 15% by 2000, followed by a 2002 tax cut. Taxes increased 36% faster than personal income in this period until the 2002 cut.

The black line represents the portion of disposable income that was saved - the savings ratio. Note the saving ratio rose steadily up to the early 1970s, which was the same period of strong inflation-adjusted median family income growth, when most families were supported by but one wage earner. Savings rates plummeted during the 1990s - - savings reaching the lowest savings rate in history - - and that includes the Great Depression period of the 1930s.

But did they really increase spending, or did real wages begin to fall under the impact of NAFTA and immigration?

Try, manufacturing leaving the US due to an anti-business climate and high tax burdens. Real wages fall, when saving and investment no long support capital investment applied to plant modernization and technological advance.

Why should manufacturing have reason to remain in the U.S. when red-tape, high tax costs, and regulatory environment assures failure in international markets inspite of US labor being the most productive in the world.

Something to think about:

Chairman of the House Ways and Means Committee,
Rep. Bill Archer (R-TX)
August 12, 1996

"A recent survey was done, in Europe and Japan, of the major corporations and I was astounded at the results. They were asked, 'If the US abolished its income tax and went to a sales tax, would that have any impact on your decisions?' Eighty percent of the corporations said they would build their factories in the United States of America. Twenty percent said they would move their international headquarters to the United States of America."

Tax reduction results in return of assets to US.

U.S. Companies Bring Overseas Profits Home; May Create Thousands of Jobs

WASHINGTON (AP) -- Led by drug makers, American companies have started announcing their plans to use a temporary tax break and shift back to the United States billions of dollars in profits that have been stashed abroad.
An incentive to invest in the U.S. economy -- that's how lawmakers promoted the short-term relief that lets companies avoid as much as 85 percent of the taxes they might otherwise pay on earnings abroad.

Try, manufacturing leaving the US due to an anti-business climate and high tax burdens.

Try, "we're picking up our marbles and leaving town, we got a better tax deal down the road" -- business's favorite game for 60 years.

Real wages fall, when saving and investment no long support capital investment applied to plant modernization and technological advance.

How about, "yes"? How about, "NAFTA helped manufacturers undercut their labor contracts and ship American jobs to Mexico?"

But you still haven't answered the question. And "go get your own data" is not an answer.

Tax reduction results in return of assets to US.

Until some hungry-mouth country offsets the advantage by doing something else.

Even if Chinese workers received 15% raises for 30 years, they wouldn't even come close to erasing the wage differential between China and the U.S. That's because 15% of nothing still ain't much.

China's supply of prison slave-labor and Malthusian masses of rural poor will afford Chinese businesses a wage advantage for as far as the eye can see. Or do you disagree?

The "fair tax" is nothing but a tax-free operating environment for already-rich businessmen. They'll be able easily to afford their own sales-tax bills because their businesses will leverage them against the increases. They'll be able to afford the 30% rise in the retail cost of goods and services when their incomes go up 5,000%.

Try, "we're picking up our marbles and leaving town, we got a better tax deal down the road" -- business's favorite game for 60 years.

So you do not oppose repealling all federal business income and payroll taxes, creating a tax haven in the US. That is afterall one of the effects of the FairTax act, is to end federal taxation of manufacturing, wholsale, and other levels of production upstream from retail sales.

Chairman of the House Ways and Means Committee,
Rep. Bill Archer (R-TX)
August 12, 1996

"A recent survey was done, in Europe and Japan, of the major corporations and I was astounded at the results. They were asked, 'If the US abolished its income tax and went to a sales tax, would that have any impact on your decisions?' Eighty percent of the corporations said they would build their factories in the United States of America. Twenty percent said they would move their international headquarters to the United States of America."

Tax reduction results in return of assets to US.
U.S. Companies Bring Overseas Profits Home; May Create Thousands of Jobs

WASHINGTON (AP) -- Led by drug makers, American companies have started announcing their plans to use a temporary tax break and shift back to the United States billions of dollars in profits that have been stashed abroad.
An incentive to invest in the U.S. economy -- that's how lawmakers promoted the short-term relief that lets companies avoid as much as 85 percent of the taxes they might otherwise pay on earnings abroad.

How about, "NAFTA helped manufacturers undercut their labor contracts and ship American jobs to Mexico?"

But you still haven't answered the question. And "go get your own data" is not an answer.

So repeal NAFTA.

That certainly is not sufficient as businesses were head out long before NAFT came along. Creating a business tax climate that encourages manufacturing to stay in the US creating new jobs and rebuilding American industrial will do more for American economy than merely repealing NAFTA ever will, so do both.

Fortunately a bill before Congress to implement a tax system that will create a manufacturing and business tax haven in the US is in the pipeline in the form of HR25, the FairTax Act. Don't see much happening as regards killing NAFTA, seems to me one should be stoking the fires under what one has at hand more than pie-in-the-sky hopes to be worked toward.

Until some hungry-mouth country offsets the advantage by doing something else.

Yep they could follow the US in creating a national retail sales tax too. From the looks of it, Russia may be headed that way for the advantages that a retail sales tax system would provide against European trade competition.

VAT may be scrapped in 2007 – Kremlin adviser

MOSCOW - VAT may be abolished two years from now and be replaced with a sales tax in Russia. The news came from Arkadiy Dvorkovich, chief of the presidential administration experts department, telling reporters that officials were studying the policy switch and its consequences.
“Obviously, this would be impossible in 2006, but it could be introduced beginning in 2007,” he said, adding that a sales tax of ten to fifteen percent should be introduced along with VAT’s disappearance.

China's supply of prison slave-labor and Malthusian masses of rural poor will afford Chinese businesses a wage advantage for as far as the eye can see. Or do you disagree?

Slave labor is one of the most inefficient forms of production on the planet. Makes for lousy production. There is more to business costs than obtaining labor. The tax system being one of the big offenders. Any action we take to improve the efficiency and encourage manufacturing in the US should be done. Including taxing imports as highly as we do our own domestic production. A national retail sales tax assures exactly that, unlike the current system in which tariffs make up less than 5% of total revenues extracted from American commerce. Time to change the pardigm abit and start focusing on assure our manufacturing receives first billing instead of giving them every reason in the world to skip town looking for greener pastures.

The "fair tax" is nothing but a tax-free operating environment for already-rich businessmen.

Never new a poor man to pay a good wage. Rich busineman do.

They'll be able easily to afford their own sales-tax bills because their businesses will leverage them against the increases.

What increases. The retail sales tax is paid by the end consumer not the business, any business.

In fact all any business can do (provided they expect to stay out of bankruptcy) is pass on costs to the individual consumer in higher prices, employees in lower wages and smaller retirement benefits, and investors in lower returns on investment. All are individual Americans, all have a stake in a healthy manufacturing infra-structure that supports our standard of living.

So, where's the rest of the data, have you asked your source?

Here's the source, only more uptodate since this is 2004 instead of pre-1998 when that chart was generated, your know same place they got the original data, from NIPA:GDP statistics.:

U.S. Department of Commerce. Bureau of Economic Analysis

Suggest you spend some time creating a graph of real personal income, as a function of savings/investment. Its an eyeopener. Saving/investment falls with rising taxes, real wage falls even though consumer spending rises. Income taxes will sap a nations economic vitality faster than vampire bats sucking a cow dry.

Economic Burden of Taxation
William A. Niskanen
Presented October 2003
Friedman Conference
Federal Reserve Bank Dallas page 6.
www.dallasfed.org/news/research/2003/03ftc_niskanen.pdf

"Given that the elasticity c implicit in recent U.S. fiscal conditions is about 0.8 and the average tax rate is about 0.3, the marginal cost of government spending and taxes in the United States may be about $2.75 per additional dollar of tax revenue. One wonders whether there are any government programs for which the marginal value is that high. Given the estimate of the long-term elasticity c from the U.S. time-series data, the marginal cost of government spending and taxes may be as high as $4.50 at the current average tax rate. "

Chief Executive, The New directions in tax reform -
May 1995.

Tax expert Ernest Christian Jr., a partner with Washington's Patton, Boggs & Blow, reckons these are low estimates or at best incomplete. Citing a U.S. Treasury study which indicates that 6 billion man-hours are consumed each year just in the record keeping for income and payroll tax returns alone, Christian says the true burden on the U.S. economy is probably closer to $1 trillion.

Remember, you're trying to convince us that this is a good deal for taxpayers.

Nope, I am merely reminding folks that the current income/payroll tax system is a disaster to the nation and need to go for reasons much more profound that just a good deal for taxpayers. Tax reform and changing the mode of taxation is a good deal for every American, whether they pay taxes today or not.

Taxes & Government Spending:

"The income tax in effect makes us vassals to the government – the politicians decide how much income we can keep. No mere “reform” of this slave tax, such as flattening the rate, can correct its fundamental denial of control over our own money. Only the abolition of the income tax itself will restore the basic American principle that our income is both our own money and our own private business - not the government's."

"Replacing the income tax with a national sales tax would rejuvenate independence and responsibility in our citizens. True economic liberty and moral revival go hand in hand."

"A national sales tax would also put the American citizen back in control of national fiscal policy. The best way to curtail government spending is to cut taxes, because they can’t spend what they don’t get. But with a sales tax, we could deny funds to a spendthrift government – and give ourselves a tax cut – whenever we make the private choice to alter our spending and saving habits."

I discussed the importance of abolishing the income tax because of its tendency to form a habit of servility in the souls of a people that accepts it.

Servility of soul is bad not only in itself, it is also an open door through which will soon walk the abuses of ambitious government power.

Leaders who find themselves with governmental power over a servile people will be quick to conclude that such a people exist to serve them.

Alan Keyes 1999

[Me] Try, "we're picking up our marbles and leaving town, we got a better tax deal down the road" -- business's favorite game for 60 years.

[You] So you do not oppose repealling all federal business income and payroll taxes, creating a tax haven in the US. That is afterall one of the effects of the FairTax act, is to end .....

Nonresponsive, and spam.

[You, spamming] "A recent survey was done, in Europe and Japan, of the major corporations ....." [More SPAM snipped.]

[Me] But you still haven't answered the question. And "go get your own data" is not an answer.

[You] So repeal NAFTA.

That certainly is not sufficient as businesses were head out long before NAFT [sic] came along. Creating a business tax climate that encourages manufacturing..... [More nonresponsive spam snipped.]

[Me] Until some hungry-mouth country offsets the advantage by doing something else.

[You, turning my point into a fallacious "bandwagon" ad populum appeal to motive] Yep they could follow the US in creating a national retail sales tax too. From the looks of it, Russia may be headed that way for the advantages that a retail sales tax system ..... [followed by more nonresponsive SPAM, snipped.]

You have a really bad habit of using every "reply" as an opportunity to spam more stuff onto the thread that is nonresponsive, not to the point, and basically cut-and-paste billboard stuff you got off a propaganda website somewhere.

I consider your performance on this thread to be 75% pollution and 25% derivative argument from other people's websites.

In your replies to me so far, I haven't detected much in the way of original thought, responsive genuine conversation, or original discourse or POV. All I see in your post to this point is the mouthings of Squealer the Little Pig, from Orwell's Animal Farm. I get the strongest impression, when reading your posts, that I'm not dealing with the head office here -- that you are more like an order-taker at McDonald's than the franchise owner, much less the guy who turns out the menu.

If that seems harsh, so be it. But you didn't show much mercy to the boards yourself, when you decided to back up your dump-truck load of spam.

[Me] China's supply of prison slave-labor and Malthusian masses of rural poor will afford Chinese businesses a wage advantage for as far as the eye can see. Or do you disagree?

[You, replying] Slave labor is one of the most inefficient forms of production on the planet. Makes for lousy production.

Do you mean poor quality? That wasn't the American experience with slave labor. Historians of slavery have showed that artisanship didn't appear to suffer in the hands of slaves, and the Tredegar Iron Works in Richmond, armorers to the Confederacy, employed hundreds of slaves in the production of war materiel.

There is more to business costs than obtaining labor.

Sure, but labor that is paid a tiny fraction of anyone else's labor is a big cost advantage. Other factors would have to be awfully unequal to erase it -- and with other countries offsetting our tax structure, including any tinkering you want to do, that isn't likely to happen. The wage advantage will persist; you haven't accounted for it at all.

[You, changing the subject back to taxes and attempting to evade the point about wage advantages] The tax system being one of the big offenders. Any action we take to improve the efficiency and encourage manufacturing in the US should be done.

So it's all about subsidizing business with tax exemptions.

Including taxing imports as highly as we do our own domestic production.....Time to change the pardigm a bit and start focusing on assure our manufacturing receives first billing instead of giving them every reason in the world to skip town looking for greener pastures.

Your demand to be treated as a sacred cow isn't exactly knocking me dead. Just why does your citizenship superordinate mine, again, in that your activities deserve tax exemption and mine don't? You won't pay NRST on your supplies and raw materials or labor -- but I'll pay it on everything I use. You're introducing a tax and social gradus here based on your self-definition as a manufacturing businessman, and treating yourself to special exemptions.

Or, as I put it a while ago,

The "fair tax" is nothing but a tax-free operating environment for already-rich businessmen.

[Your retort] Never new a poor man to pay a good wage. Rich busineman do.

How about, "poor men can't pay good wages, rich businessmen can -- but don't"?

After all, the secret to "trickle down" is not to trickle at all, right? That's why businesses pay fat retainers to management and HR consulting outfits to make sure their cost controls and benefits are the leanest, their wages the meanest, and their workforce the tiniest per top-line dollar in town. Right?

[Me] They'll be able easily to afford their own sales-tax bills because their businesses will leverage them against the increases.

[You] What increases.

The increases in their sales-tax expense on personal purchases. They'll be so rich they won't care, once their businesses get that giant tax break.

The retail sales tax is paid by the end consumer not the business, any business.

Yes, we agree about that -- which is why businesses want to stop paying corporate income and payroll taxes and obtain changes in tax law that would make individuals 100% responsible instead, and them 0% responsible for the federal budget.

And state.

And local.

Right down the line -- you want to make business tax-free, zero tax, none, nada. Such a deal.

In fact all any business can do (provided they expect to stay out of bankruptcy) is pass on costs to the individual consumer in higher prices....

Unless the market won't let them, as has frequently been the case recently as in e.g. airline tickets.

..... employees in lower wages.....

If they can, they do that anyway. They don't need a reason, or an excuse. Just a means.

..... and smaller retirement benefits......

Don't make me laugh -- years of record profits, and they're slashing retirement benefits anyway, despite being better able to afford them than ever! What a joke!

...... and investors in lower returns on investment.

Not when the market discounts the stock to expectations on P/E.

All are individual Americans, all have a stake in a healthy manufacturing infra-structure that supports our standard of living.

That's correct, but as we've also seen from reading the papers, management seems to be getting the lion's share of the value of increases in productivity, no? Shareholders are participating -- and employees are paying for it in job loss and benefit and pay decreases (in real terms).

Which gets back to my original question you never answered.

Did savings go to zero because taxes went up, as you keep suggesting without proving -- putting up correlation after correlation without actually proving your correlations --

or did savings go to zero because wages fell in real dollars???

All I want is an answer.

I consider your performance on this thread to be 75% pollution

“No one should be judge in his own case. ”
-- Publilius Syrus (~100 BC)

and 25% derivative argument from other people's websites.

NO just supporting data from many sources, too bad you have none isn't it.

I haven't detected much in the way of original thought, responsive genuine conversation, or original discourse or POV.

So why do you continue? You apparently know all the answers, obviously you need nothing from my input nor my support for whatever your agenda is.

I get the strongest impression, when reading your posts, that I'm not dealing with the head office here

Whoever told you were?

It is up to you to form your own opinions not to me or some head office to tell you what to think. I provide infomation, you draw your personal conclusions. That's the way it works.

If that seems harsh, so be it.

Not at all, just off the point and silly.

But you didn't show much mercy to the boards yourself, when you decided to back up your dump-truck load of spam.

You tack on to the end of a 1000+ reply thread on taxreform and look to change the discussion and expect to be taken seriously? Information on taxes and tax reform has been provided as an extension of the established thread topic, its up to you from there.

You obviously have your own fixed opinion of how the economy and the world works and do not appear intersted in reforming the tax system. That's fine, but the thread topic happens to be tax reform, not NAFTA, CAFTA and every other ill in the nation.

My interest is in reforming the tax system and the advantages to be gained thereby.

Your interest appears to be elsewhere. I suggest you post a thread and discussion of whatever it is you figure ought to be done rather than hijack a overly verbose thread already on tax reform to your interests.

International trade agreements and their effects are not my focus, tax reform is. If you want to talk about the best ways to go about reforming the tax system I'm here. You want to talk about all the other ills of government I've got my plate full as it is and not really interest in picking up a second banner nor putting down the one I have chosen to carry.

In any case I am leaving to take care of more immediate and for me more important concerns. So good day to you. If you want to discuss NAFTA CAFTA and other malicious trade agreements I suggest you post a thread where that can be focused on and attract those who's interest in such is greater than mine.

.Like I said above, you want to change the tax code, onus yours. You are the guy who needs support.

I'm not worried about the support for the FairTax act, and whether or not You is entirely Your affair.

I don't have an "agenda" -- you're the guy with the rented bullhorn.

Sorry no rented bullhorn here. Just a news forum that provides means for discussing the news of the day.

>>My interest is in reforming the tax system and the advantages to be gained thereby. Your interest appears to be elsewhere.

Of course it is. I've no interest in shouldering your tax burden just so you can be rich. Or richer.

You already shoulder the tax burden and will continue to do so under either system.

Me? I prefer a tax system in which the federal government is held as far away from my personal financial affairs as possible and out of the business of direct intrusion on the individual that an income tax implements inherently.

Retail sales tax takes the government totally out of my personal financial loop. It is just fine by me for them to collect tax with my purchase of goods and services through businesses remitting to a state tax bureau rather than me on the hook with the federal IRS. Let my state be the buffer between my business and the feds, and a business between my household finances and the state, that is the way I want it.

As far as all your other concerns, not involving tax reform, you have failed to cause me to see them in any way a higher priority that I should set aside support for fundamentally changing the mode federal taxation that has become a threat and oppressive influence on every citizen of the nation.

Patrick Henry, Virginia Ratifying Convention June 12, 1788:

"the oppression arising from taxation, is not from the amount but, from the mode -- a thorough acquaintance with the condition of the people, is necessary to a just distribution of taxes. The whole wisdom of the science of Government, with respect to taxation, consists in selecting the mode of collection which will best accommodate to the convenience of the people."

"A hand from Washington will be stretched out and placed upon every man's business; the eye of the federal inspector will be in every man's counting house....The law will of necessity have inquisical features, it will provide penalties, it will create complicated machinery. Under it men will be hauled into courts distant from their homes. Heavy fines imposed by distant and unfamiliar tribunals will constantly menace the tax payer. An army of federal inspectors, spies, and detectives will descend upon the state."
-- Virginian House Speaker Richard E. Byrd, 1910, predicting the consequences of an income tax.

The income tax is by no means convenient to the citizen. The administrative bureaucracy that is required to enforce that tax on the individual has no place in a society whose foundational base is the protection of life, liberty and pursuit of happiness.

[Montesquieu wrote in Spirit of the Laws, XIII,c.14:]

"A capitation is more natural to slavery; a duty on merchandise is more natural to liberty, by reason it has not so direct a relation to the person."
--Thomas Jefferson: copied into his Commonplace Book.

a free people that pays slave taxes to its government is willingly training itself for bondage.
---Alan Keyes 1999

Of course it is. I've no interest in shouldering your tax burden just so you can be rich. Or richer.

Obviously it is clear where you stand, spoken like a true populist. Or is that progressive, or socialist now-a-days? The dictionary of politics changes so much it's hard to keep track of who's who in the scheme of things.

"It's like me in the restaurant: What do I care about extravagance if you're footing the bill?"
Walter Williams

I have no interest in maintaining an income tax just so you can go without shouldering a proportionate burden of the costs of government commensurate with your consumption of this nation's resources. TANSTAAFEL

Have a nice day.

Oh indeed I will have, once an appropriate and Constitutional national consumption tax system is implemented.

Taxes & Government Spending:

"The income tax in effect makes us vassals to the government – the politicians decide how much income we can keep. No mere “reform” of this slave tax, such as flattening the rate, can correct its fundamental denial of control over our own money. Only the abolition of the income tax itself will restore the basic American principle that our income is both our own money and our own private business - not the government's."

"Replacing the income tax with a national sales tax would rejuvenate independence and responsibility in our citizens. True economic liberty and moral revival go hand in hand."

"A national sales tax would also put the American citizen back in control of national fiscal policy. The best way to curtail government spending is to cut taxes, because they can’t spend what they don’t get. But with a sales tax, we could deny funds to a spendthrift government – and give ourselves a tax cut – whenever we make the private choice to alter our spending and saving habits."

I discussed the importance of abolishing the income tax because of its tendency to form a habit of servility in the souls of a people that accepts it.

Servility of soul is bad not only in itself, it is also an open door through which will soon walk the abuses of ambitious government power.

Leaders who find themselves with governmental power over a servile people will be quick to conclude that such a people exist to serve them.

Alan Keyes 1999

You already shoulder the tax burden and will continue to do so under either system.

Only, I don't pay yours.

I prefer a tax system in which the federal government is held as far away from my personal financial affairs as possible and out of the business of direct intrusion on the individual that an income tax implements inherently.....that is the way I want it.

Why should/does anyone care what you want? After all, we all have the right to be every bit as selfish as you so obviously are.

And no, I won't pay your business taxes for you.

I have no interest in maintaining an income tax just so you can go without shouldering a proportionate burden of the costs of government commensurate with your consumption of this nation's resources.

Oh, indignation, eh? Well, I prefer to shoulder a proportion of the burden of government commensurate with my income -- having already paid income taxes on my savings. And no, you don't get to con me into paying your business-income taxes out of my hard-earned savings.

Fairer to tax people on what they're getting out of life in the form of income, than on what it takes to sustain life with bread and shelter. Just as it's fairer to tax income than property held (your capital) -- want us to tax your assets, Mr. Businessman? Hmmmm? We can do it that way -- levy your capital -- that would be "fair", wouldn't it?

It would also present the social policy advantage of penalizing storage of wealth, the most regressive kind of economy there is. Just tax total assets (and execute anyone hiding them -- do you have an account in the Caymans, by the way?), get that capital moving again, get that velocity of money up a bit.

Somehow I don't think you'd like that idea. You'd rather tax poor people's pittances they pay for Moon Pies and RC Colas, and jack up the cost of a glass of lemonade, than take an audit from the IRS yourself on your hidden income sources and off-balance-sheet transactions.

Since you've started in on invidious imputations and assumptions and all.

Oh, and by the way -- has anyone mentioned to you that you spam?

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