Posted on 04/16/2006 7:49:45 AM PDT by Eaglewatcher
The FairTax replaces the income tax and all other federal taxes with a national consumption tax. The FairTax is levied only once, at the point of purchase on new goods and services.
The group admits it will be difficult for legislators to face down entrenched special interest groups, but they initially proposed replacing the current system with U.S. Senate bill S. 25 and U.S. House of Representatives bill H.R. 25. The next step would be to repeal the 16th Amendment to the constitution allowing the Federal government to levy an income tax.
Signatories to the original petition include noted academic economists and practitioners who feel the current tax code cannot simply be fixed. The current regs include 54,000 pages, approximately 2.8 million words of mind-numbing rules, exceptions and special interest loopholes. This tangled web would be replaced by a simple national sales tax similar to that paid to the county, city or, in the case of our own Hawthorne TDD, the subdivision.
But what about poor people? The FairTax provides every family with a rebate of the sales tax on spending up to the federal poverty level (plus an extra amount to prevent any marriage penalty). The rebate is paid monthly in advance. It allows a family of four to spend $25,660 tax free each year. The rebate for a married couple with two children is $492 per month ($5,902 annually). Therefore, no family pays federal sales tax on essential goods and services and middle-class families are effectively exempted on a big part of their annual spending.
(Excerpt) Read more at digitalburg.com ...
The IRS remains to oversee excise taxes.
The portion of the IRS that oversees the Income Tax, FICA, MEDICARE, ESTATE, GIFT, CORPORATE Tax is eliminated, defunded, and the records are destroyed.
From Title III of H.R. 25:
"SEC. 301. PHASE-OUT OF ADMINISTRATION OF REPEALED FEDERAL TAXES.
(a) Appropriations- Appropriations for any expenses of the Internal Revenue Service including processing tax returns for years prior to the repeal of the taxes repealed by title I of this Act, revenue accounting, management, transfer of payroll and wage data to the Social Security Administration for years after fiscal year 2009 shall not be authorized.
(b) Records- Federal records related to the administration of taxes repealed by title I of this Act shall be destroyed by the end of fiscal year 2009, except that any records necessary to calculate Social Security benefits shall be retained by the Social Security Administration and any records necessary to support ongoing litigation with respect to taxes owed or refunds due shall be retained until final disposition of such litigation."
Shhh! Don't interrupt the pornographic dreams of the UnFair tax supporters.
This part of the legislation is ambiguous and needs to be re-written. I believe what it is trying to say is that such things as "points" and fees are taxed to the earner. So when you close a mortgage the points are taxed to the mortagage company that earns them.
We are opposed to the flat-rate tax, national sales tax, and value added tax proposals that are being promoted as an improvement to the current tax system. The Sixteenth Amendment does not provide authority for an un-apportioned direct tax.
Interesting that they don't know the difference between a direct tax and and indirect tax and claim they are a "Constitution" party?
Article II Section 8 clause 1 of the Constitution provides clear authority for all indirect taxes as they were perceived by the founders and authors of the Constitution and that taxes collect by use quotas, (apportionment by population) such as appear to be supported by the Constitution party, were to be only used in last resort and unusual circumstance where laying direct taxes (i.e. property taxes & head taxes) was to be enacted.
The Records of the Federal Convention of 1787
(Farrand's Records)
James Mchenry before the Maryland House of Delegates.
Maryland Novr. 29th 1787--
Appendix A, CXLVIa, page 149, S9."Convention have also provided against any direct or Capitation Tax but according to an equal proportion among the respective States: This was thought a necessary precaution though it was the idea of every one that government would seldom have recourse to direct Taxation, and that the objects of Commerce would be more than Sufficient to answer the common exigencies of State and should further supplies be necessary, the power of Congress would not be exercised while the respective States would raise those supplies in any other manner more suitable to their own inclinations --"
- "A nation cannot long exist without revenues. Destitute of this essential support, it must resign its independence, and sink into the degraded condition of a province. This is an extremity to which no government will of choice accede. Revenue, therefore, must be had at all events. In this country, if the principal part be not drawn from commerce, it must fall with oppressive weight upon land."
- "It is evident from the state of the country, from the habits of the people, from the experience we have had on the point itself, that it is impracticable to raise any very considerable sums by direct taxation."
- "The ability of a country to pay taxes must always be proportioned, in a great degree, to the quantity of money in circulation, and to the celerity with which it circulates. Commerce, contributing to both these objects, must of necessity render the payment of taxes easier, and facilitate the requisite supplies to the treasury."
- The principle of regulating the contributions of the States to the common treasury by QUOTAS is another fundamental error in the Confederation. Its repugnancy to an adequate supply of the national exigencies has been already pointed out, and has sufficiently appeared from the trial which has been made of it. I speak of it now solely with a view to equality among the States. Those who have been accustomed to contemplate the circumstances which produce and constitute national wealth, must be satisfied that there is no common standard or barometer by which the degrees of it can be ascertained. Neither the value of lands, nor the numbers of the people, which have been successively proposed as the rule of State contributions, has any pretension to being a just representative.
- It is a signal advantage of taxes on articles of consumption, that they contain in their own nature a security against excess. They prescribe their own limit; which cannot be exceeded without defeating the end proposed, that is, an extension of the revenue. ... Impositions of this kind usually fall under the denomination of indirect taxes, and must for a long time constitute the chief part of the revenue raised in this country.
Those of the direct kind, which principally relate to land and buildings, may admit of a rule of apportionment. Either the value of land, or the number of the people, may serve as a standard. The state of agriculture and the populousness of a country have been considered as nearly connected with each other. And, as a rule, for the purpose intended, numbers, in the view of simplicity and certainty, are entitled to a preference.
- ``A CONCURRENT JURISDICTION in the article of taxation was the only admissible substitute for an entire subordination, in respect to this branch of power, of State authority to that of the Union.'' Any separation of the objects of revenue that could have been fallen upon, would have amounted to a sacrifice of the great INTERESTS of the Union to the POWER of the individual States. The convention thought the concurrent jurisdiction preferable to that subordination; and it is evident that it has at least the merit of reconciling an indefinite constitutional power of taxation in the Federal government with an adequate and independent power in the States to provide for their own necessities.
- "The difference between a federal and national government, as it relates to the OPERATION OF THE GOVERNMENT, is supposed to consist in this, that in the former the powers operate on the political bodies composing the Confederacy, in their political capacities; in the latter, on the individual citizens composing the nation, in their individual capacities. On trying the Constitution by this criterion, it falls under the NATIONAL, not the FEDERAL character;"
Anti-Federalist Papers #3 NEW CONSTITUTION CREATES A NATIONAL GOVERNMENT;
- There are but two modes by which men are connected in society, the one which operates on individuals, this always has been, and ought still to be called, national government; the other which binds States and governments together (not corporations, for there is no considerable nation on earth, despotic, monarchical, or republican, that does not contain many subordinate corporations with various constitutions) this last has heretofore been denominated a league or confederacy. The term federalists is therefore improperly applied to themselves, by the friends and supporters of the proposed constitution.
- "The change relating to taxation may be regarded as the most important; and yet the present [Continental] sic Congress have as complete authority to REQUIRE of the States indefinite supplies of money for the common defense and general welfare, as the future [Constitutional] Congress will have to require them of individual citizens;
Only a small portion of the tax code is abolished. Abolishing the IRS is more of a promise than a reality.
So when you close a mortgage the points are taxed to the mortagage company that earns them.
Which would constitute an income tax rather than a consumption tax. All that happens is such a case is points are increased to make up the difference, the person paying the loan still pays for the tax. Keep it in the open and in the view of the electorate, purely a tax on consumption, a allow an exception to the rule.
If you want to be rid of the 16th amendment, taxing interest income is not the way to go. It is consequence of Congress' desire to tax interest income and stock dividends that the 16th amendment even exists.
The 16th amendment was designed to overturn the ruling of Pollock v. Farmers which declared the taxation of income from personal and real property to be a direct tax to be apportioned.
POLLOCK v. FARMERS' LOAN & TRUST CO., 158 U.S. 601 (1895):
- "We have considered the act only in respect of the tax on income derived from real estate, and from invested personal property, and have not commented on so much of it as bears on gains or profits from business, privileges, or employments, in view of the instances in which taxation on business, privileges, or employments has assumed the guise of an excise tax and been sustained as such."
- "If that[rents from land] be stricken out, and also the income from all invested personal property, bonds, stocks, investments of all kinds, it is obvious that by a r the largest part of the anticipated revenue would be eliminated, and this would leave the burden of the tax to be borne by professions, trades, employments, or vocations; and in that way what was intended as a tax on capital would remain, in substance, a tax on occupations and labor. We cannot believe that such was the intention of congress."
- "We do not mean to say that an act laying by apportionment a direct tax on all real estate and personal property, or the income thereof, might not also lay excise taxes on business, privileges, employments, and vocations. "
- Our conclusions may therefore be summed up as follows:
First. We adhere to the opinion already announced,-that, taxes on real estate being indisputably direct taxes, taxes on the rents or income of real estate are equally direct taxes.
Second. We are of opinion that taxes on personal property, or on the income of personal property, are likewise direct taxes.
Third. The tax imposed by sections 27 to 37, inclusive, of the act of 1894, so far as it falls on the income of real estate, and of personal property, being a direct tax, within the meaning of the constitution, and therefore unconstitutional and void, because not apportioned according to representation, all those sections, constituting one entire scheme of taxation, are necessarily invalid.
are you a supporter of the status quo?
No, hell no. Neither am I a supported of what I believe would be worse for our republic than the "status quo"; don't you agree?
It's good to know you ar not for the status quo, so just what changes to the tax system do you believe should be made?
Do you have support in Congress for your plan to improve the nation's tax system and is there a bill introduced in Congress we can take a look at to see the details of how your reforms would be implemented.
The Devil, as they say, is always in the details. So pop the hood and lets take a look.
I certianly don't agree!
How can a tax of the type endorsed by virtually every leading citizen who participated in our founding possibly be "worse" than the current communist inspired monster?
My mistake, you are correct. The "consumption" tax on the points is borne by the buyer of the home who is actually paying the points.
That class envy crap is one of things that got us our 60,000 page tax code to begin with.
I agree.
You have it precisely backwards.
There is no huge bureaucracy to monitor anyone's life. Everyone with a SS number who registers for the prebate gets it for their household regardless of income. Yearly (and when your situation changes) you report the number in your household along with the SS numbers. That's it. Once in the system, it's a mouse click to issue the checks.
Exempting items is what got us into the mess that we have now. Granting exemptions will allow the corrupting lobbyist business to continue.
The prebate makes it politically feasable by protecting the lower income households. It will defang the demogogues who would yell 'regressive'.
There may be provisions that will or maybe should change. The prebate and a single rate for everyone on everything is the way to go. That is what must not be changed.
I'm guessing they would not like what it is used to purchase. I'll likely see them soon; I'll ask.
I think I know some who are; but, I do not believe I am one of those.
The 16th ALLOWS for an income tax. It does not mandate it.
When the FairTax bill passes, it would become effective 6 months later. The repeal of the 16th Amendment could take years. Why would you want to delay the implimentation for that long?
As people get accustomed to their full paycheck again, I think that they'd rather lynch their reps and senators than allow them to reinstitute an income tax.
But for just that reason, I'd love for those SOBs to try.
Thats an easy solution. Take all of the accountants and irs agents and put them to work at the border, keeping illegals out.
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