Posted on 04/21/2008 6:04:34 PM PDT by BGHater
Taxes were on the forefront of many Americans’ minds this week as they scrambled to meet the April 15th deadline to file their returns. Tax policy in this country hurts taxpayers twice – once when they pay taxes, and then when the government spends the money. Americans are sick and tired of the financial burden and the endless forms to fill out. To add insult to injury, after collecting this money the government does some very detrimental things to the economy.
The burden of complying with the income tax is tremendous. Since its inception in 1913, the tax code has gone from 400 pages to over 67,000. The Tax Foundation estimates that around $265 billion dollars and 6 billion hours are spent just on compliance. That expense amounts to about 22 cents of every dollar the IRS collects. Imagine the boon to the economy if we spent that time and money expanding our businesses and creating jobs!
Aside from the direct loss of money and productivity, the funds from the income tax enable the government to do some very destructive things, such as vastly over-regulating economic activity, making it difficult to earn money in the first place. The federal government funds over 50 agencies, departments and commissions that formulate rules and regulations. These bureaucracies operate with little to no oversight from the people or Congress and generate around 4,000 new rules every year and operate at a cost of about 40 billion dollars. There are some 75,000 pages of regulations in the Federal Register that Americans are expected to know and abide by. Complying with these governmental regulations costs American businesses more than one trillion dollars per year, according to a study by Mark Crain for the Small Business Administration. This complicated system drives production to other countries and shrinks our job market here at home.
Big government is destructive when it takes your money and when it spends it. There is no economic benefit to supporting a government sector as massive as ours. In fact, this country thrived for well over 100 years without an income tax. Today, if you took away the income tax, the government would still have revenue from other sources equal to total government spending in 1990, when government was still too big. $1.2 trillion should be more than enough to fund a government operating within its constitutional confines, and that is exactly what we need to get back to.
I have introduced legislation many times to abolish the IRS and the income tax. It is fundamentally un-American to require taxpayers to testify against themselves and be considered guilty until proven innocent. Abolishing the IRS altogether would trigger an avalanche of real growth in the economy.
With these financial hard times only just beginning, this would be the most efficient and logical way to get our economy growing again, and Americans would need not dread the 15th of April every year.
He isn’t talking about going to a different form of tax, but soing away with the income tax, period. If the government were operating within its Constitutional bounds, it would not need the money.
It is only the assumption of other extraConstitutional duties which has mandated the additional spending.
The method of collection is really moot, if the rate of spending goes unchecked.
The prebate/rebate or what ever name it goes by, is an effort to refund the amount the poor spend on taxes on necessities.
As an average, it starts off unfair, but is especially so to those whose misfortune it is to reauire more expensive medical care or pharmacology.
I propose that the tax on medical care, food, shelter (primary residence), and energy be done away with. Then the prebate could be done away with as well.
Nor would I tax military uniforms or the various equipment items necessary to tha trade.
You may disagree, but the potential for defrauding the rebate system, the need to issue rebates, and all the positions that entails--all an expense to the government and ultimately us, would be eliminated.
I would also find a way to safeguard the already taxed savings of those who have lived prudently, especially for their retirement, who would again be taxed as they bought items which they might need. The first part of this, eliminating the tax on medical care, food, primary residence, and energy would go a long way toward removing the imbalance present in the system: the elderly are most likely to require medical care, and expensive procedures at that.
If, as a result of the fair tax, prices would come down, so much the better.
Most of the early taxes were either tariffs or consumption taxes levied on things which were not mandatory for life. Tea, nice, but not a necessity, even for Englishmen, liquor, ditto. We still have those excise taxes on a wide variety of goods, and they are included in the price. Would the fair tax eliminate those too, so purchasers of tires and other goods would not pay taxes on taxes?
I take it part of this plan is to repeal the 16th amendment.
“There is no economic benefit to supporting a government sector as massive as ours. In fact, this country thrived for well over 100 years without an income tax. Today, if you took away the income tax, the government would still have revenue from other sources equal to total government spending in 1990, when government was still too big. $1.2 trillion should be more than enough to fund a government operating within its constitutional confines, and that is exactly what we need to get back to.”
“You propose a system that would make the disparagement between rich and poor is even wider and almost ensure an implosion of social programs and a vast reduction of vital national operations such as the military. Unemployment would skyrocket, the US dollar would plummet, and your economy would falter, throwing into jeopardy the economies of reliant nations.
I think we all see what you’re saying, and we agree that, in a utopian world, taxes wouldn’t exist and be fantastic. But in real life that can’t and will never happen, for the reasons we’ve cited here and more.”
The above is a response I got from a liberal Canadian when I suggested everyone should pay the same amount of taxes. Seems the government’s done a good job brainwashing him into thinking that it doesn’t get enough money without the income tax.
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Proposing an amendment the Constitution of the United States relative to abolishing personal income, estate, and gift taxes and prohibiting the United States Government from engaging in business in competition with its citizens.
Resolved by the Senate and House of Representatives of the United States of America in Congress assembled (two-thirds of each House concurring therein), That the following article is proposed as an amendment to the Constitution of the United States, which shall be valid to all intents and purposes as part of the Constitution when ratified by the legislatures of three-fourths of the several States within seven years after the date of its submission for ratification:
`Article --
`Section 1. The Government of the United States shall not engage in any business, professional, commercial, financial, or industrial enterprise except as specified in the Constitution.
`Section 2. The constitution or laws of any State, or the laws of the United States, shall not be subject to the terms of any foreign or domestic agreement which would abrogate this amendment.
`Section 3. The activities of the United States Government which violate the intent and purposes of this amendment shall, within a period of three years from the date of the ratification of this amendment, be liquidated and the properties and facilities affected shall be sold.
`Section 4. Three years after the ratification of this amendment the sixteenth article of amendments to the Constitution of the United States shall stand repealed and thereafter Congress shall not levy taxes on personal incomes, estates, and gifts
________________________________________________________
As William F Buckley put it, all roar, no teeth. Paul makes these great(sic) speeches on theory, yet is unable to accomplish a thing because he never can take what he says beyond theory to actual real world implementation. This bill to abolish the income tax (through a Constitutional Amendment) has zero "Hows". No budgetary considerations, no departmental reorganizations, no listing of laws and departments that need to be changed, no revenue shifting, nothing. If you look at other bills sponsored by other Congressmen, to accomplish a lot less, you'll see that they include these details, and thus, get out of committee because they are something that can actually be implemented.
A couple questions for ya if you don't mind.
Is there any problem with bartering? Can I trade a car for another car, no taxes, even if one is brand new?
Or vegetables or commodities for whatever I want to purchase? Will the Fed. tax on fuel be dropped? Will the FT lock in the % that everything is taxed, or will it adjust from time to time depending on Congress?
He also has a pending bill that outlaws pain and sorrow and funds it through a complete deregulation of joy.
How so? I’don't understand your reasoning without more detail.
Poverty level where? Mississippi? Silicon Valley? Where you are makes a difference in what constitutes enough to scratch by. Just take a peek at the variation in per diem rates permissible under the current tax system, and the wide variety in what the allowance for food is under those rates. Supposedly, they are adjusted for the business traveler, dependant on location and the cost of eating there.
Using that example, the poverty level (national average) prebate of taxes on food is going to be woefully short in some locations, and long in others. So, it is unfair.
Now, if you are a diabetic, you will need more in medical supplies than someone the same age who is in good health. It really isn't optional. Without your shot you enter a coma and die.
How is it "fair" to tax that? How is it fair to tax medical oxygen?
If you get in a car accident, even one which is not your fault, you get taxed on top of having been creamed by some nitwit? Sorta adds insult to injury.
If you are a paraplegic, your wheelchair will be taxed, and any other special equipment you require. If an amputee, your artificial limbs. Your lot can be rough enough without having to pay even more, without being taxed on an arm or a leg.
This is a short list of things which are really not optional.
There are many more. Your Poverty level tax prebate isn't going to come close to refunding your taxes on these items, and they are not things you can decide not to purchase. That just isn't fair.
Some states currently do not tax food items, and it would not take much to program in at the till what is taxed and what is not. Happens all the time.
Also the wealthy spend much more on unprepared food, clothing, housing, and medical care than do the poor. Exempting these goods, as many state sales taxes do, actually gives the wealthy a disproportionate benefit.
I think I addressed medical care already, but I will add that part of the reason those who can afford medical care pay so much is that they are picking up the tab for those who cannot afford it. The poor pay less, because the hospitals get stuck with the bill, or the Welfare picks it up. On other items, such as unprepared food, housing, clothing, it is because they can!
(For starters, I did not think this was a beat up the rich sort of deal, but maybe that is what propels it. )
Everyone has to eat, everyone has to live somewhere, and the only thing which puts a lid on that price-wise is their own appetites and budgets.
(Notice I did not include clothing in the list of things not included that I proposed--the variation between what is considered "necessary" is immense, and anything past enough to keep you from dying of exposure or getting hauled off to jail is of "necessity" only depending on your economic bracket. Pay tax on your clothes, and that from someone who lives where subzero temps are quite common in winter.)
I did include energy, though, and depending on where you live work may be an elevator ride away, someplace where there are no options for public transportation. What you put the fuel in (fuel is already taxed, BTW, anyway) is up to you, and fair game to be taxed.
Again, home heat, here anyway is not optional. Unless you really ramped up the clothing budget, and use an outhouse instead of a flush toilet, it is a good thing to keep the frost off the walls. In other climes, people would argue that air conditioning is equally important. If you use less, you pay less, anyway, and iirc, that energy is already taxed--another tax the fair tax would not eliminate, so eliminate the taxes on taxes.
As for the rich spending all that money on nicer than necessary necessities (Prime Rib instead of Hamburger Helper), where does that money go?
Ultimately, the money spent on what the rich or poor spend it on goes into the pockets of the people who provide these things.
They in turn, do not stuff the mattress with it, but spend it. Not all of it will be spent on the exempted items I proposed.
At some point, it will be taxed.
Even using the internal rate of 22%, allowing that .78 of that dollar will remain after the first time it is spent, that dollar will be whittled down to less than a penny by the 18th time it changes hands. It drops below a dime on the tenth taxed transaction.
I think the government can wait one transaction more to get that fraction of a cent difference. The rich buy a big house to live in--primary residence. No taxes on that new big house.
WHAT? EGAD, you're going to break the government
--not!
The people who built the house will spend the money, and you can tax it next time. Then the rich will have to fill that big house with all sorts of things which are fitting for such an abode. You can tax them then. The amount they spend on furniture, etc, will put money in the coffers.
The hired help will get paid, etc.
The poor man builds a house, it is smaller, mainly because he either cannot afford or does not want a huge place. He buys less to put in it, and the government gets a proportional share of that.
As I said, what he spends on that new, primary residence will be taxed down to under ten percent of that amount by the tenth time it changes hands anyway.
But that raises another concern. If the Government reduces the money supply to 10% of its former self by the tenth transaction, who is going to have any money?
BTTT FairTax
I always had an idea you were a union man. 9 to 5 and all that.
While the income tax subjects bartering to taxation, the FairTax only would if one of the items being bartered is new or is a service.
The Fed fuel tax is still in place under the FairTax.
The FT legislation, as written, will tax everything equally. As it is under the income tax congress must be monitored to make sure it doesn't tinker with the tax in an unfriendly way.
You want to run a business in a country that has union wage scales or in a country where people are perfectly willing to work for half of that?
They aren't mutually exclusive. It's entirely possible to run a business in a country that has union wage scales and still have people willing to work for half of that. They just aren't willing to work for have of that and get their kneecaps busted.
There is a minumum wage in America that has one real purpose: to negotiate union wage scales and keep them high. Any businessman in his right mind would use cheaper labor that is available in developing countries.
Sooner or later, you will start to believe it.
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