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National sales tax - now! Alan Keyes on the end of income tax and the return of economic liberty
WorldNetDaily.com ^ | Monday, August 19, 2002 | Ambassador Alan Keyes

Posted on 08/19/2002 10:30:18 AM PDT by JohnHuang2

Is the economic policy of the United States on, say, taxation, an economic question, a political question, or even possibly a spiritual question? This is perhaps not as easy a choice as it looks, and we should, in particular, not be too quick to rule out the third option.

Any businessperson who is also a serious citizen and Christian knows that few aspects of business can be completely cut off from the life of citizenship or of faith. Respecting the moral integrity of the people who are my business associates and customers is not just good business. It is also the crucial daily work of citizens in a free republic, and of believers seeking to respect the image of God in their brothers and sisters.

Americans are blessed to live in a regime of liberty, including economic liberty, founded in respect for the principle of equal human dignity as the gift of God, the Creator. In America, from the beginning, economic liberty, political justice, and shared friendship with God have been understood as compatible, even essentially linked, human goods.

Accordingly, Americans have a responsibility to approach economic questions in awareness of the political, even religious, implications of the choices we make. We, the people, are responsible for making decisions of economic policy that respect and confirm the equal dignity of our fellow citizens under God. Our economic debates need not, of course, be explicitly theological. But an understanding of American citizens as self-governing, rational, equal, and morally responsible agents must be the fundamental context in which our economic policies are evaluated and chosen.

In this sense, the debate over the national tax system is not a merely economic issue, but a political question of justice and of our equality as morally responsible before God. America was born in a dispute about taxes that inspired, ultimately, the great statement in the Declaration of Independence that all men are created equal. Today's simmering revolt against an oppressive and humiliating tax system is important for many of the same reasons. So let me turn now to a more detailed discussion of what is at stake for America in the issue of "tax reform."

"Fundamental" reform?

Few issues provide such an enduring occasion for political debate as the question of how to fund the activities of the federal government – the question of taxes. In recent years, we have approached national agreement that the current system is deeply and perhaps fatally flawed. Accordingly, the politicians have presented various versions of what they call "fundamental reform."

But much of the talk of fundamental reform is really an effort to tinker with the existing tax system, in order to help diffuse growing public discomfort and even outrage. Few political leaders are willing to consider the most necessary change, because it would involve removing politicians from their gatekeeper role over the income and resources of all Americans.

Real reform requires abolishing the income tax and returning to the system our Founders intended, funding the federal government with tariffs, duties, and excise taxes – sales taxes – not with the privacy-destroying income tax. We should return to the original, constitutional tax system of the United States of America.

Our Founders frequently quoted a principle from Blackstone's commentaries on the laws of England: "A power over a man's resources is a power over his will." To control the resource base of a decision-maker is to control his decision. But the ultimate decision-maker in American life and politics must be the people. And the people cannot be free without a resource base of material comfort and sustenance free from government domination or control. A tax system putting government in control of the people's income irresistibly tends to put government in control of political decisions as well.

The Founders sought to avoid this path to tyranny. So they made a direct tax on the income of individuals unconstitutional.

The slavery of income tax

The reversal of that founding wisdom came during the "progressive" era, at the beginning of the twentieth century. A mentality of class warfare prevailed at the time, a first flush of socialism in American life, and the income tax movement was one of its results. With this mentality setting farmers against industrialists, urban folk against rural, and poor against rich, everyone was led to expect that an income tax would hit the other group harder. Chiefly, of course, the argument was that the rich would pay a disproportionate share. One thing they didn't tell us was that in this socialist scheme anyone with a private dollar is suspected of being too rich.

We ought to have realized that the income tax is utterly incompatible with liberty – it is actually a form of slavery. A slave is not someone with nothing, but someone denied control over the fruit of his labor. A slave is someone who has only what the master lets him have.

Under the income tax, the government takes whatever percentage of the earner's income it wants. The income tax therefore represents national surrender to the government of control over all the money we earn. There are, in principle, no restrictions to the preemptive claim of government upon our income.

No American government has seriously pressed this preemptive claim on our income to its logical conclusion, the explicit demand that all income is to be handed over to the government, and any private expenditure made subject to government approval. But we are deeply unwise to underestimate the power of the confiscatory principle in the hands of a government determined to pursue its advantage. The federal government could bankrupt the country in short order, merely by more aggressively expropriating the money we have already agreed it has the right to take.

The withholding tax system disguises this dangerous loss of control. One of the effects of withholding is that we don't even realize that government money is actually our money. Most of us think that only our net pay – our actual paycheck – is our money, and what is withheld is the government's money. We tend to think this because the government simply grabs part of the money we have earned. I once heard a caller to a talk radio show object to the proposal that taxpayers pay for the savings and loan debacle, demanding instead that the government pay for it, as though the government could pay for anything without using dollars taken from us!

The income tax threatens our liberty in many ways, but surely the most alarming and outrageous is its requirement that we surrender our privacy by exposing all the sources of our income to the government. One of the prudent protections of liberty is to treat the government that today seems to be your friend as if tomorrow it could become your enemy. No army exposes all of its lines of supply and all of its resources even to its allies, much less to its potential enemies. And while our government is not our enemy in the traditional sense, our Founders were ever mindful that liberty depends upon vigilance against the temptations of tyranny. That's why, if we mean to retain our freedom, it is our duty to maintain material resources for action that the government cannot control and manipulate. But with the income tax we surrender the ability to maintain economic associations without the knowledge of the government.

It gets even worse, particularly for Christian believers. Through government social engineering, such as bestowing a revocable 501(c)3 non-profit status on our churches, the government is able to manipulate the tax system in order to gain control over our institutions of conscience, character, and moral formation. The American Revolution itself would never have happened without the courage of such institutions, particularly our churches. The same is true of the abolitionist movement, and of all the other great movements of conscience in American history. These efforts were decisively motivated by principled private associations. The role once played by those institutions in boldly challenging us to oppose inroads against our liberty has been gutted. As a result of the income tax we have subjected the entire sector of conscience to the control and manipulation of the government, muffling what ought to be the voice of independent faith and conscientious action in our society.

We don't need to "improve" the income tax. We need to get rid of it, and return to the original design of our Founding Fathers. Theirs was the simple and clear vision of a citizenry with control over the money it worked to earn, and with the corresponding ability and independent judgment to exercise its rightful authority over government.

A national sales tax

Whether to save our money, spend it on necessities, or spend it on luxuries was to be a matter of the sovereign liberty of the citizen, who would make the first decision of what to do with every dollar. Under a national sales tax, this is exactly what would happen. Only after we decide what to do with our money can the portion used for purchases in the open marketplace be subject to tax.

The sales tax requires no surrender of privacy, no confession to the government of our entire economic life.

On the other hand, a sales tax would make it much harder to avoid paying legitimate federal tax without good reason. A sales tax on end user products is a more equitable system, because the incidence of taxation is more evenly distributed throughout the population. Those in criminal enterprises who have never filed a federal tax return would have to pay the national sales tax charged by the merchants who provide their goods and services. When such a person enters the marketplace to make a purchase he would pay the tax that everyone else is paying.

But under a national sales tax system, equity would not come at the price of giving up control of our money. Rather, a national sales tax would restore to American working people their control over the incidence of taxation. Only the relatively well-off have that opportunity under the present system, because they can hire lawyers and accountants to calculate the most advantageous tax strategies, and take advantage of arbitrary technicalities.

The most important goal of tax policy must be reclaiming control over the incidence of taxation – on which dollars and on how much of our income tax actually falls. Today, the incidence of taxation is entirely out of the control of most working Americans, because it is determined by politicians and bureaucrats and manipulated by clever lawyers and accountants. The liberating power of a national sales tax system is that it would end the control of these few elites. Under a sales tax system, individual citizens would again be sovereign in deciding how much of their money will be subject to the tax at any given moment, according to their particular financial circumstances. Such a system will give us back a control over our money that we have not had in generations, since the income tax was imposed.

And that control will be financially crucial to families. When times are tight, instead of praying that the politicians pass a beneficent tax cut, every American will have the power to give himself a tax cut just by changing the pattern of his own spending and saving. We already reduce our discretionary expenditures when money becomes tight, and under a sales tax system our tax burden would also become a discretionary expenditure.

Returning to liberty

Congress will pass a national sales tax only when the people insist on it. To bring this day closer, it will be necessary to turn the attention of grassroots America to the real tax debate. That debate is not only about the rate of taxation or bloated size of government. Most importantly, it is about the right to property and the preservation of our liberty. Americans must come to see that the tax reform we so urgently need is not more back room manipulation of the income tax and its ever-mutable rates, schedules, and regulations, but it is rather a total replacement with the system our Founders intended.

We must remind our fellow citizens that the income tax is less than a hundred years old, and that the nation did fine for a long time without it. A national sales tax is not a radical new proposal, but is actually a return to the sensible and consistent understanding of liberty that the Founders of America established from the beginning. Returning to a sales tax is sound conservative thinking, which restores the system of taxation that stood the test of time in its proven compatibility with liberties of our people. The Republic survived difficult trials in its early years in part because we had a tax system that left the citizenry independent enough to successfully discipline their government.

America was built by people who used rightly and nobly the control over their actions and resources that a wise political order secured to them. The income tax expropriates the independence that made possible American prosperity, American character, and ultimately American self-government. By keeping the income tax we are inexorably encouraging the moral poverty – the poverty of motivation, of discipline, and of responsibility – that we all sense has deepened in the America of recent decades.

By wisely turning back now to the wisdom of our Founders, we can renew an economic environment of wholesome motivation in which responsibility pays, and in which discipline makes a difference. Real tax reform can help us make an historic break with the servile and passive habits of recent years, and begin a new era of confident liberty. If we still believe we deserve – and have the capacity – to be free, ending the income tax is a duty to ourselves, to our posterity, and, we must not shrink from acknowledging, to the God who created us equal that we might govern ourselves in justice.




TOPICS: Front Page News; News/Current Events
KEYWORDS: taxreform
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To: Bella_Bru
Don't you think the government would find some sneaky way to make up the lost sales tax?

Since we're talking about a National RETAIL Sales Tax, there would be NO mechanism left for them to raise taxes sureptitiously...if they were going to raise taxes, they would have to do it right out in the open where everyone could see it every day at the cash register. That just one of the many beautiful features of the NRST.

I can't remember exactly which one of the Federalist papers it is, but Hamilton makes the salient point that a tax on consumption is self-leveling, like water. If they raise the rate too high, the effect is actually to reduce revenues. Hehehe... ;-) IMO, the Fairtax would create economic and political pressures to reduce taxes and big-government taxing and spending over time, actually beginning the process of putting government back within the boundaries of the enumerated powers.

EV

21 posted on 08/19/2002 9:27:42 PM PDT by EternalVigilance
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To: Taxman
Just a ping on the off-chance that you haven't seen this.
22 posted on 08/19/2002 9:36:58 PM PDT by EternalVigilance
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To: JohnHuang2
Mega bump!
23 posted on 08/19/2002 10:08:19 PM PDT by jslade
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To: JohnHuang2
Statement of Del Threadgill
"As for Fairness, it is hard to understand why a tax system that determines a person's contribution to the cost of government based on his ability to pay is less fair than a system that is based on what he spends."

24 posted on 08/19/2002 11:29:45 PM PDT by lewislynn
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To: goldstategop
Besides since investment and savings will never be taxed,

Better think again. You don't really think they can/will put together a revenue neutral tax bill while removing a select group of tax payers (corporations etc.) without taxing virtualy everything you do, do you?

From the faitax bill(HR2525):

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


25 posted on 08/19/2002 11:43:06 PM PDT by lewislynn
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To: goldstategop
And there will be no real incentive for the politicians to raise taxes on us since we simply stop consuming more.

Yea we can stop buying groceries, prescription drugs, paying rent, car payments/leases, credit card payments, house payments, haircuts, buying gasoline, using utitlities, including the telephone and computer phone lines, not to mention everyone else will stop consuming what ever it is you or your company offers too.

BTW, from the Congressional record:

The Republican-appointed Director of the Joint Committee on Taxation issued a report this very week noting that these new Republican tax proposals assume ``that retail sales through the Internet would be subject to the same Federal tax as other retail sales, notwithstanding the current moratorium.''

This same report notes that in order to maintain the existing level of Federal revenues, the tax that Republicans would impose on Internet sales and on sales across America would be 59.5 percent over 10 years. That is 60 percent. Those are not my numbers, those are the Republican numbers. I know that it sounds unbelievable that a Republican Congress would try to do this, but that is exactly what they are proposing, a 60 percent tax, in addition to any State and local taxes on electronic commerce that might be imposed.

Mr. FROST. Mr. Speaker, I yield myself 30 seconds.

Mr. Speaker, the previous speaker was asking about simplicity and how do we understand all of this. Let me read a memo from the Joint Committee on Taxation . This ought to be simple enough for the gentleman to understand.

The memorandum is in response to their request for an estimate of the budget neutral tax rate for H.R. 2525. That is the bill of the gentleman from Georgia (Mr. LINDER), a bill to replace the current U.S. corporate and individual income, estate and gift and Federal income contributions act, payroll taxes, with a flat tax on retail sales of all goods and services.

Then on the second page it has a little chart here, neutral over 5 years, 59.5 percent. That is what they want to do, neutral over 5 years, national sales tax 59.5 percent. I believe the American people can understand that.


26 posted on 08/20/2002 12:11:52 AM PDT by lewislynn
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To: Bella_Bru
The following point that I found on fairtax.org might help to answer your question:
Some commentators have raised questions regarding the stability of a consumption tax as the principal source of federal revenue. They speculate that a tax on consumption might be a less steady tax base than our current income-based tax. Today, most theorists would expect to find that consumption, over time, is more stable than income. When income falls or even ceases, people borrow, dip into savings, or rely on gifts to maintain consumption levels. Similarly, when income is unusually high, people tend to either pay down existing debts, or to save more.

It is indeed preferable to have a federal tax base that is relatively stable. A stable tax base gives rise to smaller variations in government revenue over time. A steady flow of revenue allows the government to more effectively budget and more easily avoid running deficits. . . .

Research [has] revealed that consumption varied less, and was therefore more stable over time than the current income tax base. This finding was confirmed using three different statistical measures.

(see http://www.fairtax.org/pdfs/stable%20government%20revenue.pdf)

It’s ironic, but the case could be made that an income tax is less stable than a sales tax. Granted, a dip in the market might have some effect on tax revenues under a sales tax, but what kind of tax revenues are collected when there’s unemployment under an income tax? And certainly trouble in the market leads to trouble in employment rates, so there's going to be less tax revenue under a stressed economy, no matter what the tax system might be.

27 posted on 08/20/2002 12:15:41 AM PDT by Gelato
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To: lewislynn
It seems to me the tax is on the fee for service, not the investment amount. Do you not read it the same way?
28 posted on 08/20/2002 6:59:55 AM PDT by outlawcam
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To: lewislynn
"As for Fairness, it is hard to understand why a tax system that determines a person's contribution to the cost of government based on his ability to pay is less fair than a system that is based on what he spends."

"From each according to his ability, to each according to his need." -Karl Marx

Is that what you mean? LOL

The Federal Income Tax is nothing less than the implementation in America of one of the key planks in the Communist Manifesto. Your post defends that implementation.

I will give you this...you are the most persistent defender of the income tax status quo on FR. But you have sunk to a new low by defending marxist dogma.

I won't even start to address your other 'points' tonight. But suffice it to say they are just as twisted as the one I just pointed out.

29 posted on 08/20/2002 9:27:05 PM PDT by EternalVigilance
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To: EternalVigilance
Is that what you mean? LOL

As factual as it is, It's not my quote. That would be why there's quotation marks around it.

I won't even start to address your other 'points' tonight. But suffice it to say they are just as twisted as the one I just pointed out.

Of course you won't, "as twisted" as they are they're copied and pasted from your beloved sales tax legislation or the congressional record.

To "address" them would mean you'd have to explain them and you can't do that without exposing the fraud in your scam or your ignorance of their existence.

Why would I want to replace one fraud with another simply because it has a nice (dangling carrot) title...as fraudulent as the use of "sales tax" is in it, the rate is even a bigger fraud. Not to mention your use, or rather mis-use, of "retail" thrown in there. What else are you lying about?...

I will give you this...you are the most persistent defender of the income tax status quo on FR.

Actually you'll never be able to produce one time where I defended the income tax (only in narrow minds does opposing one bad thing constitute defending the other). However, oddly enough, there has been thread after thread, year after year of sales tax shills like pigdog, ancient geezer (and his income tax spam), kevkrom, (maybe even you and taxman) and on and on defending the income tax "status quo" and chastising income tax protestors in whatever form.

30 posted on 08/20/2002 10:30:10 PM PDT by lewislynn
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To: outlawcam
It seems to me the tax is on the fee for service, not the investment amount. Do you not read it the same way

No. The tax on the fee for service is the explicit tax. The tax on the interest is the implicit tax. That's why you see the words like "interest", "investment" and "rate paid" in there.

31 posted on 08/20/2002 10:35:18 PM PDT by lewislynn
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To: lewislynn
It is "IMPLICITLY CHARGED FEES FOR FINANCIAL INTERMEDIATION SERVICES." It doesn't say that it is a tax on interest, but a tax for services related to interest-bearing accounts. Sounds like a bunch of lawyer gobblygook to me. I'd contact Rep. Linder or the Fair Tax people to get an explanation before jumping to conclusions. The language doesn't seem to necessarily bear what you claim.
32 posted on 08/21/2002 7:38:21 AM PDT by outlawcam
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To: outlawcam
It doesn't say that it is a tax on interest, but a tax for services related to interest-bearing accounts.

Once again, the tax for sevices is explicit, the tax on interest is implicit.

Linder doesn't know what's in his bill. He didn't know, when asked, that in his bill (the fairtax hr2525) "any government" employee's wages salaries and benefits is subject to the sales tax. That in his bill "any government" is considered a taxable employer..in other words "any government" (local , state, federal) payroll and benefits packages would increase by 30%. AND, the fairtax folks won't answer questions on this, they'd prefer you not even know what it is.

Believe what you want. But why would you think the big spending government will write a tax bill that favors the tax payer?...unless of course you're a corporation with big contributor dollars.

You will also pay "sales tax" on interest you pay out. Such as credit card, mortgage, car payments, etc.. Interest is the "implicit" purchase price you pay for buying money....interest you earn is the "implicit" price paid for someone else using your money....except they won't pay it, they (institutions) will collect, then remit it to the government. But pay it you will.

The tax is imposed on the differnce in rates times your balance and an arbitrary monthly (fed fund?) rate set by the government, refered to in the bill as "the basic interest rate".


33 posted on 08/21/2002 6:10:15 PM PDT by lewislynn
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To: JohnHuang2
This is why I voted for Keyes in the 2000 Republican primary. (And also because I saw zero difference between Bush and McCain.
34 posted on 08/22/2002 9:41:44 AM PDT by Commie Basher
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To: Commie Basher
I saw zero difference between Bush and McCain.

The biggest difference was McCain was for Campaign Finance Reform and Bush said he was against it, remember?

35 posted on 08/24/2002 10:05:28 PM PDT by Keyes For President
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