Replies

For most of the first 100 years, with the exception of the War Between the States, the US got along without an income tax. The budget was generally balanced.

I couldn't agree more. It proves we don't need an income tax. However it doesn't change the fact Article 1 Section 8 gives Congress the power to collect taxes. Section 8 will have to be repealed for your scenario to occur. Until then the least that can be done is to restore power back to the people as our founding fathers intended with The Constitution by giving them the choice of when and how much they are to be taxed by passing The Fair Tax Act.

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.

Again I agree. The Fair Tax directly addresses controlling spending. Tying taxation directly to consumption will provide a check and balance between the people and Congress. Congress would be forced to raise the consumption tax rate if they increase spending. Doing so will cause consumers to spend less if the rate is too high. Less purchases will result in less tax collected by Congress thereby forcing them to reduce Congressional spending. Congress can only maximize tax collection by keeping the tax rate and by association spending within reasonable boundaries.

Founding father and first Secretary Of The Treasury Alexander Hamilton endorsed a consumption tax because he understood the power people have over Congress with a consumption tax in his Federalist Paper #21. To quote Hamilton:

"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. When applied to this object, the saying is as just as it is witty, that, "in political arithmetic, two and two do not always make four." If duties are too high, they lessen the consumption; the collection is eluded; and the product to the treasury is not so great as when they are confined within proper and moderate bounds. This forms a complete barrier against any material oppression of the citizens by taxes of this class, and is itself a natural limitation of the power of imposing them."