Posted on 04/10/2011 8:04:24 AM PDT by phil_will1
As I see it, Taxman is making a false choice—either the income tax or the Fairtax. Both have serious warts, so while I agree that the income tax needs attention, the Fairtax is a really bad plan. Here’s why.
Basically, the Fairtax creates a fatal confrontation between the Federal and State/Local governments over the proposed unconstitutional taxation by the federal government of State/Local government consumption. Fairtax throws retrees under the bus by forcing them to resume paying for their SS benefits with their sales tax dollars. Fairtax unfairly double taxes everyone’s after tax savings. Fairtax would destroy the new housing market. Buyers would have to come up with not only a 20% down payment but also the 30% sales tax which has no collateral value. The “prebate” would create a group of 45 million workers between the ages of 18-64 who would pay no net federal tax, yet would still qualify for full SS retirement benefits. Retail prices would rise by 18% on average after removing all business “embedded” taxes.
There is much else wrong with the Fairtax scheme, and it is very unlikely that Congress will ever give it serious consideration, imho!
No, it is not. I FRankly don’t care what you think you can prove.
I hate the income tax and the IRS!
The FairTax, warts and all, rids the US of both.
IMHO, that is what is important.
I have neither the time nor the interest in debating you.
We are back to, “FRankly, my dear, I don’t give a damn” about what you think.
No, it is not. I FRankly don’t care what you think you can prove. I hate the income tax and the IRS! The FairTax, warts and all, rids the US of both. IMHO, that is what is important.
Come now Taxman, you must know repealing the 16th Amendment as worded in H.R.25’s companion legislation R.J.RES. 16 would not withdraw Congress’ power to lay and collect taxes calculated from profits, gains, salaries and other incomes. And although H.R. 25 may get rid of the IRS, keep in mind it creates two new tax collecting agencies: an “Excise Tax Bureau” and the “Sales Tax Bureau, in addition to keeping the Bureau of Alcohol, Tobacco and Firearms alive which will also be collecting taxes.
And the Excise Tax Bureau would be there to collect all those excise taxes Congress may impose which are calculated from profits, gains, salaries and other incomes. So, although the IRS may disappear, it would do so in name only and would be resurrected as the Excise Tax Bureau and still would continue to collect taxes calculated from profits, gains, salaries and other incomes.
Now, don’t you think it would be prudent to demand H.J.RES 16 ought to contain the following wording in its repeal of the 16th Amendment before you give your support to it?
The Sixteenth Amendment is hereby repealed and Congress is henceforth forbidden to lay ``any`` tax or burden calculated from profits, gains, interest, salaries, wages, tips, inheritances or any other lawfully realized money
Without this language in the proposed repeal of the 16th Amendment, Congress may continue to lay and collect excise taxes, such as the Corporate Excise Tax of 1909 calculating the amount of tax to be paid from the corporation’s profits and gains. Also see Springer vs. United States in which the S.C. upheld a tax calculated from income, prior to the adoption of the 16th Amendment.
Are you saying you do not object to Congress laying the “fairtax” in addition to maintaining its power to lay and collect taxes calculated from profits, gains, salaries and other incomes?
JWK
Basically, the Fairtax creates a fatal confrontation between the Federal and State/Local governments over the proposed unconstitutional taxation by the federal government of State/Local government consumption.
hbvg3,
Let me give you another argument concerning the un-constitutional nature of H.R. 25. The fact is, the alleged fair tax runs afoul of the very intentions for which our Constitution requires direct taxes to be apportioned.
Our founders intended for Congress to finance its expenditures from imposts and duties at our water‘s edge, and, as a second means to fill the national treasury miscellaneous excise taxes on judiciously selected articles of consumption (indirect taxes) were permitted. But if these taxes were found insufficient to meet Congress expenditures and a shortfall was created, then and only then was a general tax among the states to be laid to equal and extinguish the shortfall (deficit)!
Our Constitution’s fair share formula for any general tax laid among the states, considering subsequent amendments to our Constitution, may be expressed as follows:
States’ population
---------------------------- X SUM TO BE RAISED = STATE’S SHARE
Total U.S. Population
In fact, the rule of apportionment was specifically adopted so the people of those States paying the lion’s share of the general tax would be guaranteed a vote in Congress proportionately equal to their financial contribution!
Keep in mind our progressive crowd gave us the 16th Amendment which they intended to use to circumvent the rule of apportionment as applied to raising revenue. Socialists, “progressives”, RINOs and the friends of big government, are great at spending other people’s money and always demand their one man one vote part of the Constitution when it comes to spending from the federal treasury. But when it comes time to fill the national treasury in a general tax among the states they run and hide from the one vote one dollar part of the Constitution, which is also part of the apportionment formula and gave them their one man one vote.
The alleged fair tax, just as the progressive income taxation now does, is designed to subjugate the rule of apportionment so that the people of those states who contribute the lion’s share under the alleged fair tax are not given their constitutionally guaranteed proportionate vote in Congress equal to their financial contribution. And this is what Mike Huckabee, Neal Boortz and Herman Cain hide from their listening audience___ our founding fathers intended rule requiring representation with proportional obligation! But, instead of me telling you what our founders intended with regard to any general tax laid among the States, let them speak for themselves!
With regard to the general government imposing internal taxes upon us, he contended that it was absolutely necessary they should have such a power: requisitions had been in vain tried every year since the ratification of the old Confederation, and not a single state had paid the quota required of her. The general government could not abuse this power, and favor one state and oppress another, as each state was to be taxed only in proportion to its representation Pinckney addressing the S.C. ratification convention with regard to the rule of apportionment __ 4 Elliot‘s, S.C., 305-6
And see Nicholas, during the ratification debates of our Constitution.
“The proportion of taxes are fixed by the number of inhabitants, and not regulated by the extent of the territory, or fertility of soil”__ 3 Elliot’s, 243, “Each state will know, from its population, its proportion of any general tax” ___ 3 Elliot’s, 244 Mr. George Nicholas
Mr. Madison goes on to remark about Congress’s “general power of taxation” that, "they will be limited to fix the proportion of each State, and they must raise it in the most convenient and satisfactory manner to the public." 3 Elliot, 255 And Mr. PENDLETON makes it crystal clear what evil is being addressed with regard to the rule of apportionment. He says: The apportionment of representation and taxation by the same scale is just; it removes the objection, that, while Virginia paid one sixth part of the expenses of the Union, she had no more weight in public counsels than Delaware, which paid but a very small portion ___ 3 Elliot’s 41 Bottom line is, H.R. 25 would violate the agreed upon rule that those states who contribute the lion’s share of the tax are to be guaranteed a representation in Congress proportionately equal to their contribution. But what can we expect when fair.tax.org is proud to announce their proposed tax is a “progressive” tax.
JWK
John, I understand the founders intent, but as a practical matter, there would be no way now for the States and the Fed to agree on the “sum to be raised”.
As a matter of interest, when Washington sat down at the first cabinet meeting, there were five persons there in addition to George and his VP. (War, State, Treasury, postmaster, and attorney general.) When Obama sat down, there were fifteen cabinet members plus a whole slew of independent agency heads, I guess.
Until the size and scope of the Federal government is reduced, no way can excise taxes and a State levy fund the darn thing. By the way, there is a Tennessee guy promoting “My share” a plan similar to the founders plan, except that the formula is the amount to be raised divided by the total population. He assumes that the cost of the federal government might be reduced to $600 billion, so the cost per person would be $2,000 annually. How to get the cost down to $600B is the sticky wicket!
I raised the constitutional issue simply to point out an issue no Fairtax advocate seems to want to talk about. Assisted by a couple of Yale constitutional scholars, my focus was on the long held Supreme Court doctrine of “intergovernmental tax immunity”, which has guided the court decisions for a couple of hundred years. I have no clue what the present Court might decide should the Fairtax ever get a hearing, but I am sure the Founders would turn over in their graves at the idea of their creation taxing the creators.
I understand the founders intent, but as a practical matter, there would be no way now for the States and the Fed to agree on the “sum to be raised”.
Hbvg3
I’m a bit puzzled by your post since the States, under our Constitution’s original tax plan, are not authorized to agree on the “sum to be raised” by Congress. Our Constitution’s original tax plan grants power to Congress to raise existing levels of revenue without the State's approval! Keep in mind that if imposts and duties do not provide sufficient revenue, Congress also has the authority to lay internal excise taxes on judiciously selected articles of consumption. And if these taxes are insufficient to meet Congress’ expenditures, e.g., if an emergency such as war developed and a shortfall is created by Congress borrowing, then and only then is the apportioned tax to be laid to extinguish the deficit created by Congress‘ borrowing. But the apportioned tax, as you must fully be aware of, creates a very real moment of accountability for each States’ Congressional Delegation who must then return home with a bill in hand for their Governor and State’s Legislature to deal with. And it is this movement of accountability which, if practiced today, would encourage Congress while in Washington to shrink the size of the federal government and live within the means brought in from imposts, duties and internal excise taxes to avoid the apportioned tax!
Bottom line is, our founding fathers original tax plan creates a very real incentive for Congress to shrink the size of the federal government, which you and I seem to be in agreement on.
In regard to your argument that “… the Fairtax creates a fatal confrontation between the Federal and State/Local governments over the proposed unconstitutional taxation by the federal government of State/Local government consumption.” I understand your argument and the constitutional conflict which the alleged fairtax would create. The Court in the Pollock decision put it this way, and with regard to apportionment:
The founders anticipated that the expenditures of the states, their counties, cities, and towns, would chiefly be met by direct taxation on accumulated property, while they expected that those of the federal government would be for the most part met by indirect taxes. And in order that the power of direct taxation by the general government should not be exercised except on necessity, and, when the necessity arose, should be so exercised as to leave the states at liberty to discharge their respective obligations, and should not be so exercised unfairly and discriminatingly, as to particular states or otherwise, by a mere majority vote, possibly of those whose constituents were intentionally not subjected to any part of the burden, the qualified grant was made. ___ POLLOCK v. FARMERS' LOAN & TRUST CO., 158 U.S. 601
Since the tax described in H.R. 25 is essentially an across the board tax upon “property” both real and personal, it does create the constitutional conflict you mention and infringes upon the States’ resources under which to raise their revenue.
Unfortunately, Taxman approaches this issue in a manner that rejects productive criticism and truth and facts take a back seat to promoting the alleged fair tax.
Regards,
JWK
Are we really to believe the founder of fairtax.org., Leo E. Linbeck Jr., who was a former ringleader of the federal reserve banking cartel which plunders our national treasury?
Repeal the seventeenth Amendment, and return Senators to the position of elected officials wholly responsive to their own State government and I would agree with your scenario. It may also be instructive to read policy papers provided by the 50 Governors through the National Governors Association. For instance, the Governors are strongly opposed to any kind of federal consumption tax such as the Fairtax.
As for Taxman, I’m disappointed with his stance which basically is, “don’t bother me with any more facts, my mind is made up and the Fairtax is fair.” I have spent eight years reading and studying/debating this scheme, and have concluded there are too many moving parts and too many rice bowls being gored to ever get any serious consideration. My suggestion for tax reform draws on the many mistakes I believe the Houston group made. It’s called Fairtax-Lite, and is basically a 10% consumption tax that replaces just the income tax. And, I would prefer that the consumption tax selected be the VAT, a much maligned and misunderstood tax plan.
We are back to, “FRankly, my dear, I don’t give a damn” about what either of you think.
Sort it out to suit yourselves, introduce legislation in the Congress, get it passed into law.
That is how the system works.
If you're a RETAIL business then you remit 23% of gross receipts to the state sales tax authority and earn 1/4% of receipts for your trouble.What kind of government hack thinks you "earn" what is already yours?
It's pretty easy to calculate 23% of gross - I think even you could do it lewisGee, maybe you'd even like it if we just sent all we collect and "earn" what they let us have.
lumber isn't retail so you wouldn't have to worry 'bout it. Even if you did, you would have no additional compliance costs and most likely less. No payroll deptLOL!...Ignorance is bliss.
The tax isn't "yours" lewis. Earning for spending time on remitting is just another job you have to do now = but now it's an unfunded mandate. Under the nrst, it becomes funded. Silly - were were unaware that you currently have to collect taxes [income, payrolls] and remit for nothing? The nrst provides for your time by paying you to do so. Surely this is just made up and the hidden reason you have for wanting to keep the income tax system is still hidden. Nobody is that dumb.
No payroll TAX department. I apologize again for the error in the post. There is no FICA tax under the nrst. Didn't you know?
LOL. You’d tell someone suffering from a dreadful illness to refrain from taking the needed medicine because the shot would hurt. You’d copy-n-paste volumes from medical journals asserting the debilitating effects of pain and so on.
...all without providing an alternative.
See, anyone [a 6 year old, even an 0bama voter] can memorize, copy-n-paste, and name call. Anyone. But very few have the knowledge or ability to develop a realistic alternative to a problem.
If you want readers to get something [besides a laugh] from your novels [which nobody reads - but i’m sure you read and re-read them to impress yourself with your copy-n-paste and memorization “skills”] then put forth a realistic alternative. I say you don’t have one. If you can remember what someone else gave as an alternative, copy-n-paste it for discussion.
“ Repeal the seventeenth Amendment, and return Senators to the position of elected officials wholly responsive to their own State government and I would agree with your scenario”
hbvg3,
I agree the 17th Amendment needs to be repealed to help restore good government and federalism, our Constitution’s plan. The adoption of the 17th Amendment was an assault upon federalism by progressives of the early 1900s who also gave us the 16th Amendment and its attack upon our Constitution’s rule of apportionment for any general tax laid among the States. Keep in mind progressive always demand their one man one vote part of the Constitution, but they hate the one vote one dollar part when it comes to a general tax laid among the States, and that is what the “progressive” fairtax is all about … another assault upon the rule of apportionment, just as the 16th Amendment was.
But I do agree with repeal of the 17th Amendment and having each State’s Senators having to come home with a bill in hand if Congress spends more than is brought in from imposts, duties and miscellaneous excise taxes on judiciously selected articles of consumption. I suspect tea party events would turn into tar and feather parties and Congress would miraculously find ways to immediately shrink the size of the federal government to avoid the apportioned tax.
As to Taxman, I too am disappointed that truth and facts are irrelevant to him in a discussion concerning tax reform. And what really gets me is most of the ordinary people supporting the “fairtax” are under the assumption they will no longer have to file tax returns when in fact ordinary working people who dare to sell the property they have in their labor will be requited to file “fairtax” returns under the penalty of perjury 12 freaken times a year, be subject to audits and will have to keep any records and reports Congress may dream up. Not to mention they will have to cough up a 23 percent tax to government on the sale of their labor in addition to paying an additional 23 percent tax upon their purchases.
Oh, and I almost forgot, H.R. 25 is cleverly designed to keep alive Congress power to lay and collect taxes calculated from profits, gains, salaries and other incomes, e.g., the Corporate Excise Tax of 1909 upheld in Flint vs. Stone Tracy, and, a tax calculated from “income” levied during the War between the States which was upheld in Springer vs. United States.
Bottom line is, the “fairtax” is a clever proposal for a massive expansion of what Congress may tax and gets its traction when people like Mike Huckabee and Herman Cain sell it as being an end to income taxation. Of course, they never tell their captive audiences income taxation comes back under Congress’ power to lay and collect excise taxes, and H.R. 25 specifically creates the Excise Tax Bureau to collect taxes calculated from profits, gains, salaries and other incomes. Mike Huckabee and Herman Cain are almost as good as Obama in flimflamming the American people with their promotion of the alleged fairtax, and they have something in common with Taxman … ignoring what the alleged fairtax is really about … an expansion of what Congress may tax.
Regards,
JWK
Are we really to believe the founder of fairtax.org., Leo E. Linbeck Jr., who was a former ringleader of the federal reserve banking cartel which plunders our national treasury?
……put forth a realistic alternative.
Principled,
I guess you missed what I wrote in post No. 49:
What I support is going back to our Constitution’s original tax plan which I outlined in Donald Trump and his possible run for the presidency, taxes and trade.
Regards,
JWK
If we can make the majority of America’s families dependent upon a federal government check, [the alleged fair tax’s family consumption entitlement] we can then bribe them for their vote, keep ourselves in power and keep the remaining portion of America’s productive population enslaved to pay the bills___Our Washington Establishment’s Marxist game plan, a plan to establish a federal plantation and redistribute the bread which America’s labor and business has produced.
The only thing relevant to me in re: FairTax is that under the FairTax, I and my fellow Americans will be FRee to work, earn, save and invest without the heavy hand of government interfering.
The issue is FReedom! Once We the People are FRee of the income tax and the IRS, then we can fix other problems that present themselves.
Your insane insistence on repeating ad nauseum a couple of arcane “problems” you have detected in the FairTax has garnered you exactly how many positive posts?
How many Congressmen or Senators support your tax reform plan?
Slink off and keep muttering to yourself how unfair all of this is — no one here really gives a damn what you think.
The only thing relevant to me in re: FairTax is that under the FairTax, I and my fellow Americans will be FRee to work, earn, save and invest without the heavy hand of government interfering. The issue is FReedom! Once We the People are FRee of the income tax and the IRS, then we can fix other problems that present themselves.
Taxman,
I get the impression from what you stated above, you have been listening to Mike Huckabee and Herman Cain and have confidence in what fairtax.org says about the “fairtax”.
Sorry to disappoint, Taxman, but the alleged fair tax does not free Mary and Joe Sixpack, your ordinary working couple, from the “heavy hand of government“!
Mary and Joe have two children and find it necessary to earn extra money to pay their bills. Mary baby sits for neighbors in the community and cleans homes on weekends to raise extra money while Joe, who works for a pluming company as a full-time job, also provides the same plumbing service on his own time to people living in his community to raise extra cash.
Well, surprise, surprise! Under the alleged fair tax Mary and Joe Sixpack’s inalienable right to sell the property they have in their labor becomes a taxable event, and, they must first register with government to sell the property they have in their labor, send a 23 percent tax to the federal government on the sale of their labor, and file fairtax returns 12 freaken times a year under the penalty of perjury, and, they will be compelled to keep any records Congress may dream up, not to mention the threat of audits which will constantly haunt them if they dare to sell the property they have in their labor. And don’t forget, Mary and Joe will also have to pay a new 23 percent tax upon their purchases in addition to the 23 percent tax upon the sale of their labor. The alleged fairtax gets Mary and Joe coming and going!
I’m surprised you didn’t know the above facts regarding the “fairtax”. The fairtax is certainly not liberties’ friend! It’s a clever proposal for a massive expansion of Congress’ power over Americas’ businesses, industries and ordinary working class people. The only tax reform needed is to add the following 32 words to our Constitution:
“The Sixteenth Amendment is hereby repealed and Congress is henceforth forbidden to lay “any“ tax or burden calculated from profits, gains, interest, salaries, wages, tips, inheritances or any other lawfully realized money”
Best wishes, JWK
Are we really to believe the founder of fairtax.org., Leo E. Linbeck Jr., who was a former ringleader of the federal reserve banking cartel which plunders our national treasury? .
Go find another sandbox to mess up, John. I am tired of your drivel.
You write as though you are a Fairtax expert. Tell you what, why don’t you take my simple Fairtax true/false quiz. We both might learn something. To keep it simple, just list the numbers of those you believe are false. Cheers!!
(1) HR25 abolishes the IRS and the IRC.
(2) There are approximately 67,000 pages in the Internal Revenue Code and supporting Regulations.
(3) A sales tax inclusive rate of 23% would be revenue neutral.
(4) The after tax price of retail purchases will be about the same.
(5) The “prebate” is a tax refund paid in advance.
(6) Your dollars will purchase more under the Fairtax.
(7) You choose when and how much tax to pay.
(8) Everyone will be economically better off under the Fairtax.
(9) Interest bearing investment and debt instruments are not taxed.
(10) There is $10-$15 trillion of US owned assets in offshore accounts in order to avoid taxation.
(11) Buying “used” goods, (tax previously paid), eliminates the tax costs from the sales price.
(12) A national sales tax would have no impact on State and Local governments.
(13) The GDP will rise by around 10% in the first year of implementation.
(14) The Fairtax will save Social Security.
(15) The Fairtax is progressive.
(16) The Fairtax plan will insure that everyone pays their fair share of taxes.
The tax isn't "yours" lewis.It's mine now untill it's determined how much I owe based on business expenses...Businesses don't pay income tax on gross receipts...A tax on gross income would only happen under your money grabbing plan...
Once again your ignorance of how the real world works is astounding.
If you want to see why, after 10+ yrs, the Fairtax hasn't gotten anywhere, look in a mirror.
Duh. They pay on income. Or is it the buyers of the lumber that actually pay Lewis?
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