Why the income tax must go

Worldnet Daily ^ | August 8, 2002 | Harry Browne

[WhiteGuy]

My vote is for sale. (credit B.A.Conservative)

Any candidate who will guarantee his commitment to the concepts listed here, gets my vote.

Any candidate who refuses does not deserve my vote.

[Action-America]

Wait until they are paying $15.00 to $20.00 extra on every $100 they purchase.

That's the whole idea.  Today, with the income tax being taken out before they ever see it, most people don't really realize how much of their income they are now paying in taxes, so there is no broad public outcry, every time Congress raises taxes.  Even though, with a National Retail Sales Tax, the prices of products would drop by more than the sales tax increase, people would begin to realize how much they are being gouged by the government and we would begin to see a broad public outcry for lower taxes, even at the expense of reduced entitlements.  We want them to be outraged.

 

[Action-America]

Any candidate who will guarantee his commitment to the concepts listed here, gets my vote.

Let's qualify that.

Some candidates have proven that their guarantee is not worth the time it takes to laugh at it.  That's why I voted for the Republican challenger in our last congressional district primary (he lost) and why I will probably vote Libertarian or other third party for President in a couple of years, depending on who is running.  Although I still consider myself a Republican, the fact that the lack of principles in republican legislators is fast approaching the total lack of principles on the Democrat side of the aisle, now makes me place the man above the party.

Maybe that statement should be:

Any candidate who will reliably guarantee his commitment to the concepts listed here, gets my vote.

 

[BJungNan]

...the prices of products would drop by more than the sales tax increase, ...

That will not happen. Businesses will use the situation to gain more margin. Even if they do lower prices (1) it will not be immediate becuase of an uncertainty over how the tax change will affect the businesses bottom line and (2) when business does determine they can drop prices, they will not drop them as much as the tax savings they will realize.

I am not making any editorial statement on this, simply telling you that this is natural and what will happen. THe liberals, to be sure, will have a field day acusing business of being greedy.

Points 1 and 2 above are pretty much what took place when Canada and Australia switched over to a value added tax (sales tax, Goods & Services Tax) system, which is likely the way the U.S. would go - if they go there.

I share your desire to see it happen although I will be very, very surprised if we ever see it. There is too much corruption in Washington and elimination of the income tax in favor of a fair sales tax makes it harder to be corrupt.

[WhiteGuy]

Good point.

Please understand my level of commitment......

the "we're for smaller government" gop has lost it's credibility.

It will take alot for me to believe that a candidate's word is honorable.

[Action-America]

Even if they do lower prices (1) it will not be immediate becuase of an uncertainty over how the tax change will affect the businesses bottom line

This is true.  Any substantial change in our tax system will create some temporary turmoil.  But the temporary turmoil resulting from a move to a true sales tax - not a value added tax - will be short-lived, as market forces take over.  Small businesses will try to use such uncertainty to get a jump on their larger, more cautious competition, which leads to my second point.

and (2) when business does determine they can drop prices, they will not drop them as much as the tax savings they will realize.

If we should go to a true sales tax - not a value added tax - then market forces will force prices down to margins similar to previous margins.  The thing that currently keeps the large corporations from raising prices to exorbitant levels, is that in order to compete, small businesses keep finding ways to cut costs and thus their need for a higher profit margin.  That same motivation will force prices down after a move to a true sales tax.

As long as there is competition in the market (Congress and the Whitehouse has not yet outlawed competition), market forces will keep profit margins at about the same level.

I share your desire to see it happen although I will be very, very surprised if we ever see it. There is too much corruption in Washington and elimination of the income tax in favor of a fair sales tax makes it harder to be corrupt.

Agreed.  But, the economic alternative is so horrible that we cannot let up in the least, on our efforts to abolish the income tax, in any of its forms, and replace it with a National Retail Sales Tax.

 

[Satadru]

They actually are quite expensive. Military and the courts are the only legitimate public goods. They are quite expensive to maintain. I would privatize everything else, including the interstate highway system.

[Satadru]

did you know under the so called "consumption tax" interest earned and paid is taxable

Not true. Earned interest is capital gains. As such, it is income and will not be taxed.

Interest is the price paid for borrowing buying (consuming) money.

Only for the bank, or wherever you are investing it. Since there will be no more corporate taxes, banks will not have to pay interest as well.

I get your overall drift that interest earned will be lower as well. That's fine. That just means people will take bigger risks to get higher interest. If you are risk-averse, you will settle for lower levels of interest. If you are a risk-taker, you will go for higher return and more risk.

[goo goo g'joob]

Having said all this, I oppose a consumption tax system.

I'm not totally sold on a consumption tax either. However, one huge benefit would be the accountability that has never before been present - Average Joe buys a pair of shoes for $20 and has to pay $4.50 in federal tax. Now, for the very first time in his life - Joe realizes his individual tax burden and starts looking for his congresscritter!

[Cato]

The time is 5:10 PST

[Cato]

Any comments on my earlier thoughts?

There is a very interesting story behind my comments on the 27th Amendment.

This cowboy from West Texas laid the dangers of it on me. Still wore cowboy boots and hat but was working telecom. A quite intelligent gentleman but his looks were decieving. LOL!

Take care,
CATO

[lewislynn]

Not true. Earned interest is capital gains. As such, it is income and will not be taxed.

Not true. You'll need to do your homework. Read the legislation.
From Hr2525 (the fairtax)

`SEC. 801. DETERMINATION OF FINANCIAL INTERMEDIATION SERVICES AMOUNT.

`(a) FINANCIAL INTERMEDIATION SERVICES- For purposes of this subtitle--

`(1) IN GENERAL- The term `financial intermediation services' means the sum of--

`(A) explicitly charged fees for financial intermediation services, and

`(B) implicitly charged fees for financial intermediation services.

`(2) EXPLICITLY CHARGED FEES FOR FINANCIAL INTERMEDIATION SERVICES- The term `explicitly charged fees for financial intermediation services' includes--

`(A) brokerage fees;

`(B) explicitly stated banking, loan origination, processing, documentation, credit check fees, or other similar fees;

`(C) safe-deposit box fees;

`(D) insurance premiums, to the extent such premiums are not allocable to the investment account of the underlying insurance policy;

`(E) trustees' fees; and

`(F) other financial services fees (including mutual fund management, sales, and exit fees).

`(3) IMPLICITLY CHARGED FEES FOR FINANCIAL INTERMEDIATION SERVICES-

`(A) IN GENERAL- The term `implicitly charged fees for financial intermediation services' includes the gross imputed amount in relation to any underlying interest-bearing investment, account, or debt.

`(B) GROSS IMPUTED AMOUNT- For purposes of subparagraph (A), the term `gross imputed amount' means--

`(i) with respect to any underlying interest-bearing investment or account, the product of--

`(I) the excess (if any) of the basic interest rate (as defined in section 805) over the rate paid on such investment; and

`(II) the amount of the investment or account; and

`(ii) with respect to any underlying interest-bearing debt, the product of--

`(I) the excess (if any) of the rate paid on such debt over the basic interest rate (as defined in section 805); and

`(II) the amount of the debt.

`(b) SELLER OF FINANCIAL INTERMEDIATION SERVICES- For purposes of section 103(a), the seller of financial intermediation services shall be--

`(1) in the case of explicitly charged fees for financial intermediation services, the seller shall be the person who receives the gross payments for the charged financial intermediation services;

`(2) in the case of implicitly charged fees for financial intermediation services with respect to any underlying interest-bearing investment or account, the person making the interest payments on the interest-bearing investment or account; and

`(3) in the case of implicitly charged fees for financial intermediation services with respect to any interest-bearing debt, the person receiving the interest payments on the interest-bearing debt.

[Satadru]

I didn't know what HR 2525 is. I did some search and it seems that it is close, but not exactly the same as fairtax. I suppose Sec 801 needs an amendment.

[LenS]

And an armed citizenry will stop enemy air forces with what? You plan on shooting down Chinese ICBM's with your hunting rifle? You plan on shooting those pesky biological weapons? Our enemies are using terrorists because we have a strong professional military with the most advanced (and expensive) equipment. Replace that with just an armed citizenry, and our enemies will go back to using big armies and navies. An armed citizenry against modern tanks and jets is a dead citizenry. Even the Chechens lost Grozny twice when they tried to defend it (and the Russians lost it back once when they tried the same).

[teeman8r]

during wwII, the allies dropped inexpensive single shot derringers to the french resistance... what could a single gun do to the armed forces of the third reich... well, they used the close quarters gun to kill an enemy soldier and then take his gun and so on and so on... for a country to be conquered, the infantry must move into the territory, an armed citizenry prevents that, your air forces won't win the war, the large navies won't defeat us, the armed citizenry does not replace an army for fire power, but when achmed tries to take a plane, he's dead, when the pizza terrorist tries to light his shoes, he's shot dead...

will people die in war, they always do.

tanks and jets must be kept and maintained somewhere... an armed citizenry, with its vast numbers can be there...

[teeman8r]

during wwII, the allies dropped inexpensive single shot derringers to the french resistance... what could a single gun do to the armed forces of the third reich... well, they used the close quarters gun to kill an enemy soldier and then take his gun and so on and so on... for a country to be conquered, the infantry must move into the territory, an armed citizenry prevents that, your air forces won't win the war, the large navies won't defeat us, the armed citizenry does not replace an army for fire power, but when achmed tries to take a plane, he's dead, when the pizza terrorist tries to light his shoes, he's shot dead...

will people die in war, they always do.

tanks and jets must be kept and maintained somewhere... an armed citizenry, with its vast numbers can be there...

[LenS]

The Nazis were not defeated by the French or the Polish or the Jewish or the Yugoslavian resistances. Yes, they suffered occasional setbacks in Warsaw or Yugoslavia, but in the end, they smashed or forced those groups to flee using just a few spare infantry divisions. The Nazis were defeated by the vast armies and industrial might of the US, UK and USSR. Those derringers killed a few stray Nazis, but it was the massive Allied invasion and air attacks that liberated France.

Regarding terrorists, yes an armed citizenry can cut attacks short. Arming Israelis helped to stop terrorist attacks with guns. But the terrorists adapted, they went to bombs and then suicide bombs. But the Arabs wouldn't even bother with such tactics if it wasn't for the Israeli govt. and the IDF and IDAF. They'd simply send their armies in to slaughter the well-armed citizenry with tanks or artillery. They'd pull an Assad and level the Jewish cities artillery.

Guns on the planes might have helped. But if the average citizen could carry guns on a plane, wouldn't terrorists also be able to get guns on board? In several of the hijackings, the terrorists were the majority in first class with only a stewardess and businessman or two in their way. As the attackers, they would have had a huge advantage in a gun fight. To be honest, probably the only place where a gun could have made a difference was in the cockpit. And only if the door had been secured. But the new doors and pilot wariness wasn't part of the equation early that morning.

Guns wouldn't have helped against the shoe bomber if he had simply used a lighter or if he had went to the bathroom to use his match. Instead, the moron tried to do it in front of others.

Please note I believe Americans should be allowed to carry guns in most places. But to believe that such individual weapons could defend our country against organized armies is wishful thinking. Do not confuse the British Army with it's thousands with a Chicom army with it's millions. There were things that the British wouldn't do over the long run. The Chicoms would willingly slaughter every American they found in a resisting area. Also, Americans were a relatively self-sufficient pre-industrial society in 1776. But today, only a handful of people live on farms. An invading army could easily starve most of the population into submission or death. No, our best defense is our ability to sink such an invading force with our expensive and advanced Navy and Air Force.

[teeman8r]

sorry i missed this post earlier... yes i concur that a standing army is best against an invading force, but a chicom invasionary force of even millions would be hard pressed to eradicate the many gun owners, and there are plenty of ways to stop a tank and as the partisans fight, the resolve of the invaders will weaken... this is of course all hypothetical, i hope never to see it, but underestimating the power of the lone gunman will play into his hands.