"HR 25 does some things that will prevent an income tax from returning so quickly."
You do raise some isssues that would make the resurrection of the income tax more difficult.
"First, it eliminates ALL federal withholding."
Did you ever pause to think that this step might be sufficient to completely revamp our entire system of taxation and spending? Far too many people believe that they do not pay taxes because of witholding. Just imagine the effect of having everyone having to write a check to the government each and every payday. Don't you think that would bring the point home to every one that they do pay taxes and that the cost of the federal government should be immediately reduced?
This brings me to my principle objection to the 'fair tax'. It is designed to be revenue neutral. It does nothing to reduce federal spending. The problem is not how to collect taxes but how to reduce spending. Elination of income tax witholding is an excellent start on that. Also, elemination of FICA witholding would jump start the desire for privitiztion of social secuirity.
"Second, all exports will be leaving our shores at a price 25% less than under an income tax."
But, if and only if, the 16th is repealed. Otherwise, the price would be increased.
"Third and maybe most compelling, the entire income tax code is erased from law - poof - gone. How easy would it be to re-write, negotiate, and pass an entire income tax code?"
Much too easy to accomplish until the repeal of the 16th. Besides, HR25 would result in a new code defining what is taxed and what is not. In time, one would find that one set of onerous regulations are merely replaced with another.
"Repealing the 16th is not sufficient to prevent an income tax - only how it's collected."
The 16th removed the constitutional prohibition on the ability of the federal government to levy taxes on individuals. Prior to the 16th, taxes could only be levied against the states and had to allocated purely on the basis of the relative populations of the state.
No, just repleal the ability to do paycheck witholding and I think you'll acheive your real objective of reducing the size, scope, and cost of the federal government.
Did you ever pause to think that this step might be sufficient to completely revamp our entire system of taxation and spending?
YES! I haven't read the rest of your post but I agree fully with this.
Yes it is. That's because it is not the intent to fight spending battles now - just get a new tax system. Fighting spending battles now would ensure failure of the bill. Nobody is going to agree to less money coming to their pet project. This is an illustration of how hard it would be to rewrite a tax code.
It does nothing to reduce federal spending. The problem is not how to collect taxes but how to reduce spending.
I disagree. I think it will be more effective to change the method of collection than to try to reduce spending under the income tax. I mean, how many DECADES have we been fighting to reduce spending? Folks just aren't going to give up their money. We will not tame the beast under the income tax. Period. It can't be done.
Elination of income tax witholding is an excellent start on that. Also, elemination of FICA witholding would jump start the desire for privitiztion of social secuirity.
HR 25 eliminates all withholding, including FICA for individuals. It also eliminates the "employer contribution" portion. SS is then funded from the sales tax proceeds. INteresting that you note the aid this would be in privatization....the breakdown of taxes is easy to make under the nrst. IIRC SS represents about 9% of the 23% tax, or about 40% of the total cost. It's easy to see from that SS is a major problem. Wow - cut the rate to 14% by privatiizng SS! Yeah man!
Hence the perfect illustration of how I believe this nrst can ultimately tame the government spending beast.
DD: But, if and only if, the 16th is repealed. Otherwise, the price would be increased.
Under then nrst, business inputs are not taxed. Hence products sold outside the US will no longer have the costs of our tax system built into the price... allowing our US companies to compete on a more level playing field.
The elimination of the income tax is what allows price reduction of exports. The nrst does not add one dime to the price of exports.
I'll mention here that imports will have to pay the nrst. CHina's stuff will be hit with he tax as will every import - again making it better for US companies to compete with countries with near zero labor costs.
Irrespective, the amendment proposed makes the taxation of income unconstitutional, which obviously handles the problem.
Your objection that this should be done first is valid IMO.
What I'm told is that no lawmaker will eliminate the mechanism for government revenues without first having an acceptable replacement. IMO it would be nice to have HR 25 concurrently become law at the passage of the proposed amendment to repeal 16th and make income taxing unconstituional.
I tend to think this would help too. Economically, the income tax is abysmal though. The nrst is like gas on the economic fire.
Take some time kicking around here.
ANd thans for the thoughtful replies.
"Just imagine the effect of having everyone having to write a check to the government each and every payday."
One obvious and completely predictable effect would be an exponential increase in enforcement costs. Can you imagine the bureacracy that would have to keep up with paychecks as reported by employers vs. tax remittances coming in from individual taxpayers?
Or would you recommend implementing such a system on the honor basis?
"The problem is not how to collect taxes but how to reduce spending."
That is not the conclusion that the President's Tax Reform Commission arrived at after about 3 months of hearing testimony from witnesses and inviting comments from Americans all over the country. In fact, the title of their mid-term report was "America Needs a Better Tax System". Senator Mack said at the hearings week before last that not a single respondent had commented to the panel that the tax system is fine as is and that no reform is necessary.