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To: ancient_geezer
[Taxes] 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. - Hamilton, Federalist #21.

This was the thinking vis-a-vis all excises as well as duties. A tax on whiskey - a single item,  is one thing. It is self regulating. A tax on everything is something else. A tax on a single commodity can be avoided, a uniform tax on everything (like an NRST) cannot be avoided and therefore provides no negative feedback loop - a concept the founders understood.

I have nothing further to say on the subject so feel free to break out your Taxprotester's Hall of Fame sheet now. I won't be back. Bye.

15 posted on 04/21/2002 10:14:55 PM PDT by agitator
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To: agitator

a uniform tax on everything (like an NRST) cannot be avoided

First: The NRST of HR2525 does not tax "everything". Business purchases are not taxed, used goods are not taxed, a person's own produce for his own use is not taxed. A person's labor for himself is not taxed. Therein are plenty of opportunities to avoid both the collection and remittence of the tax as a business, as well as payment of the tax by the consumer.

Secondly, the concept of not being able to tax beyond a certain level, is mentioned as a virtue of consumption taxes in general because it decrease sales of that which is being taxed, it is not a prohibition in the Constitution for laying a tax on all items.

Note: Hamilton's tax on whiskey, taxed all whiskey. If one wished to purchase that commodity they paid the tax and when the "duties are too high they lessen the consumption--the collection is eluded;" That is not to say they had an legal alternative source of that commodity. Merely that people buy less of that which is taxed.

In the case of a general the NRST something not puchased results in savings & investment that reduces prices through increases of productivity and pressure on competitive pricing causing a fall in overall tax + product price cost. The tax is avoided, and the economy as a whole benefits the consumer both in the amount of tax collected from him, as well as the downward pressure of pricing, which is just the opposite of the current tendancy in the economy to inflate.

19 posted on 04/21/2002 11:05:45 PM PDT by ancient_geezer
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