Principled wrote:Only 23 posts before the first fair tax supporter starts spewing half truths and misinformation. Amazing.
Others (who currently evade taxes) will actually have to begin paying taxes.
First, everybody pays taxes under the current system. You can't have it both ways. If ~30% (or more) of the price of goods is "hidden taxes" then anyone who buys those goods is paying taxes. You can't evade those taxes unless you live in a cave and hunt your own food or gather your own nuts and berries. If you buy stuff, you pay taxes.
Second, there are some who evade taxes by trading in "black markets" and doing various illegal activities. Others who underreport or fail to report their income at all and evade taxation that way. These illegal activities will continue to be untaxed by the fair tax. For example, drug dealers who don't report their income and pay income taxes on their income from the sale of illegal drugs probably won't start reporting their sales and collecting/paying the NRST.
And the handyman or flea market dealer who gives discounts for cash payments with no receipts so that he doesn't have a paper trail and can avoid reporting the income will probably also avoid reporting the sale the same way and not pay any NRST on his activities.
Transactions that go untaxed due to tax avoidance or tax evasion under the current system will also be untaxed for the same reason under the NRST.
pigdog wrote:Actually, there was some form of income tax or tax on wages and salaries from the civil war up into the early 1900's. And taxes on wages and salaries were not deemed unconstitutional by the courts.
Well, actually before 1913 the idea of an income tax was prety much thought to be unconstitutional BUT ...
In the 1890's, Congress tried to expand the income tax and tax income from rents, dividends and from the gains from buying and selling stocks and real property. Since those taxes were on the proceeds of real property transactions (stocks represent ownership in real property), the courts held those to be "direct taxes" and subject to the provisions of Article I, Section 2, Clause 3. Since those income taxes on income derived from property transactions weren't apportioned to the states based on populations, the taxes were ruled unconstitutional. The 16th amendment was specifically to address that issue.
So, just repealing the 16th amendment would make taxes on capital gains from real estate and stocks unconstitutional. But it would not make excise taxes on wages or salaries unconstitutional.
This is an area where a lot of "tax protesters" get in trouble. Some try to argue that the 16th amendment wasn't properly ratified (an argument that the courts won't ever directly address). The courts generally point out that the particular income that these people are trying to avoid taxes on isn't derived from the rent or sale of real property, and so the income tax that is due is an excise tax and not a "direct tax" and the excise tax would be legal even if the 16th amendment wasn't properly ratified.
This is why simply repealing the 16th amendment won't render all of the income taxes we have today unconstitutional. Income taxes that are excise taxes (for example, taxes on wages or salaries) would still be constitutional, even if the 16th amendment were repealed.
pigdog wrote:Actually, the "revenue neutrality" requirement is a rule of the House of Representatives. That rule can be changed by action in the House (and only in the House). It's not a law, and even if it were an actual law, it could be changed by a simple majority of both houses of Congress. If you can't muster the votes to change that rule, you'll never convince me that you'll get the 2/3rds of each house needed to amend the constitution to do away with the income tax.
Any tax bill that becomes law will have to be revenue neutral
The problem is that we are taxed too much and the federal government spends too much on things it shouldn't be involved in. And the so called "fair tax" does nothing to change that. There will actually be a big windfall to the government (and a major expansion of government power) when the so called "fair tax" becomes law.
pigdog wrote:Most taxpayers already see on every paycheck just how much they are paying in income taxes and FICA taxes.
Any "revolt" will come once ALL taxpayers will be able to see on each and every receipt just how much their government is costing.
If you want to spark a revolt, do away with withholding and make people write the checks to pay their taxes.
pigdog wrote:Here's some figures for you (from IPI Policy Report - # 168, Simplifying Federal Taxes: The Advantages of Consumption-Based Taxation which attributes them to a May 30, 2001 Wall Street Journal article).
Can you imaging the existing tax sysem (or even the wunnerful, undefined Nightmare Tax) after 20 30 more years of political manipulation ... which is much easier under those tax systems than under the FairTax which has only a single visible-to-all rate?
Now, here's a question you should ask (or answer for me if you already know the answer). How many of these changes did each "sponsor" of the "Fair Tax" bill vote for? How many did each "sponsor" of the "Fair Tax" bill vote against?
There have been 1,916 changes to the tax code in the past five years, and 7,000 changes since 1986.
You are very naive if you think that the system set up by the fair tax proposal won't be manipulated and changed by lobbyists and social engineers in the congress. What's it going to look like after almost 2000 changes in just the first 5 years? What about after 15 years and 7000 changes? Do you want to have to hire an accounting firm to calculate your bill every time you buy groceries?
How exactly will it be more difficult to change the tax code under the fair tax? Will it require a super-majority to enact changes? Will there be referendums for the voters to be able to veto changes? Or will it be the status quo, with Washington lobbyists trying to influence Congress critters for special treatment for their patrons?
"How exactly will it be more difficult to change the tax code under the fair tax?"
One of the most significant differences is that deductions against income are taken off the table by the FairTax. That is where most of the complexity in the current system is. Computing sales is a piece of cake compared to the myriad of deductions that have to factored in to compute taxable income. Could congress complicate what now is a very simple and straighforward proposal? Sure. Could it do so to the extent that it would resemble the 60,000 page monstrosity that we now have? Now way.
There are other reasons that the FairTax will be an enormous simplification, but I will save them for later.
Not anywhere near as easily as they do with the Marxist income tax system under which NO ONE knows exactly how much they are paying!
The ONLY thing the FairTax bill REALLY does is make what is currently hidden apparent AND spread the burden out over a MUCH larger base.
With the income tax a taxpayer must endure the equivalent of the Spanish inquisition in order calculate what he owes. With the FairTax the government would not need to know even so much as his NAME!
It's ALL about FREEDOM!!!
Let's clarify some of your incorrect and/or misleading statements in the post #209.
I'd point oput that "... living in a cave, hunting your own food, etc. ..." is in no wise tax evasion but quite legal and amounts to tax minimization, not evasion.
The statement about those now evading taxes is intended to apply to drug dealers, etc. and is not intended to mean they pay NO taxes presently since - as you point out - they pay SOME taxes when they buy things whose prices have been goosed by 30% due to taxation. That merely means any purchases of that sort pay only the portion of the tax that would apply to that 30% increase and they DO NOT pay taxes on the full purchase price of the thing involved as they would with the FairTax (which amount would be greater than that tax portion now paid) nor do they pay income taxes - a much greater evasion than the incremental tax accidentally paid when purchasing things presently.
The drug dealers (and others) evading taxes are evading INCOME taxes on their ill-gotten gains which ARE taxed with the FairTax as they purchase things at retail rather than just the relatively small amount paid on embedded taxes. With the levels of income many of these folk have, that income tax amount would be substantial (which bye the bye) is not counted in the evasion/non-compliance figures of the IRS.
Certainly FairTax advocates are not saying that the drug dealer is going to collect the sales tax and forward it to the state. That failure merely offers legal avenue to pursue him - but that's not the topic at hand.
As to the flea market situation, if it falls under the de minimus provisions of HR25 that's fine. If it goes beyond that point, then the seller would be violating the law to not collect and report taxes and provide the buyer with a receipt as required. Lest you think that such "open air" sales are not checked by sales tax bodies presently you must live in a state that is quite lax. They are in my state where "buyers" are sent around to make on-the-grounds checks and they can also penalize those sellers who do not have reseller's permits. The provisions and implementations vary from state to state.
All of the above clearly shows the gross misrepresentation in your statement:
"Transactions that go untaxed due to tax avoidance or tax evasion under the current system will also be untaxed for the same reason under the NRST."
My statement about the income tax before 1913 is correct enough since the 1895 Supreme Court "Pollock" decision struck down the last income tax of 1894. From that time on (until the infamous year of 1913) Congress generally believed the income tax to be unconstitutional. The 1913 IT (income tax) was a fairly "flat tax" as can be seen from the form and instructions for them - http://www.salestax.org/library/1913form1040.html
Prior to 1894 there was an IT with the first such law passed in 1861 (which was apparently was not too effective for a while). The first IT form for use by taxpayers was the IT of 1863 and here is what that form - and instructions - looked like:
http://www.salestax.org/library/1863form24.html
The 1861 IT law was allowed to expire in 1872, 9 years before the Supreme Court got into the game heavily in 1881 with "Springer".
The complete effect of repealing the 16th is not at all clear but it certainly would be a big help in making the IT a thing of the past for at least quite a long time. It might be that the Springer and/or Pollock decisions would have to be revisited .. especially the Pollock which I think you may be alluding to. In any event, that's not what this thread is about.
With the lapsing of PAYGO provisions it would still be extremely difficult to pass a bill through Congress that was NOT revenue neutral due to opposition from either (or both) sides of the political spectrum. Keep in mind, though, that the Tax Panel has been given the revenue neutral charge by the President presumably hinting at a veto if otherwise.
As gfor the vote to repeal the 16th, let's suppose that the FairTax bill becomes law. There is now a revenue-neutral tax law in operation. As people become familiar with it's many benefits to most it will be well-liked (compared to the IT, you naysayers notwithstanding), As sauch the 16th amendment will then be an anachronism serving no purpose and - much like repeal of Prohibition - will relatively easily be passed in Congress and ratified by the states.
Certainly the FairTax backers have no argument with the fact that the government sspends too much - and for many of the wrong things - but the FairTax is a tax bill, not a spending bill and must be seen in that light. It's more than a bit difficult where your statement about a "windfall" for the government and an expansion of their powers comes from since that is clearly not the case from the wording or intent of the bill ... in other words, a completely unsupported statement.
The income and FICA withholding are only a part of what is taxed and what people see and even if those were their complete tax burden there is really no way for them to do anything about it where with the FairTax - despite what you think - the populace can place pressure on their elected reps (and I doubt that would be to raise the tax). The other taxes you don't mention (estate, inheritance, etc.) are decidedly NOT on their check stubs but those are real taxes also - and done away with by the FairTax.
The assumption you make opf 2,000 changes in the first 5 years (as with the past 5 per your numbers) is quite funny in view of the utter simplicity of the FairTax as it now is written. There is nothing like the corpus of arcana that exists with the IT. By comparison the FairTax is an open book and changes would be MUCH more visible - and therefore those attempting them would be more accountable than at present. I believe it would be MUCH more difficult to make the sow's ear when starting with a silk purse that is apparent to all.
That certainly does not mean changes - or derailment won't be attempted (witness the attempts by you and other status quo lovers on these threads, for example) since some feel their entire being threatened they are so ingrained to living under government-control of their lifestyle via the tax code. Certainly the taxpayers will haave far more of an opportunity to resist and defeat such political mischief under the FairTax than the IT (or VAT or Flat tax). The K Street crown will thin out considerably or move to attempts to shape other legislation since the opportunity available under the FairTax will be greatly smaller.