Want to revitalize economy and make Americans richer? Kill the income tax

Detroit News ^ | 11/17/02 | Nolan Finley

[jimkress]

Intriguing, idea and Washington aren't words that often appear together in a credible sentence. But an intriguing idea is floating around Washington for reforming the way Americans pay for government.

Treasury Secretary Paul O'Neill is quietly exploring a plan to do away with the income tax, that punitive system of taxation adopted in 1913 that spawned an un-American strain of collectivism. The income tax promotes the notion that the first fruits of hard work and enterprise belong to the government, not the individual.

[Taxman]

Then you certainly should support a flat rate National Retail Sales Tax!

Talk about a level playing field, that is exactly what the NRST does -- level the playing field for all players.

[Gritty]

The American people deserve a 21st Century tax plan -- the failed 19th Century Marxist Progressive Income Tax is not it!

If an NRST is to be instituted, it must be accompanied by the concurrent repeal of the 16th Amendment, the "Income Tax" Amendment! To do otherwise would only subject us to the re-establishment of this cruel and unusual tax at a later date when the politicians think they can get away with it - and they will if they can. Then, we'll be stuck with the worst of two worlds!

[Taxman]

Everyone will have the FReedom to work, save and invest.

You insult every lower income American when you suggest that they do not have the ability to save. They have the ability, just not the incentive.

Why save when it is taxed away from you? Why save when it disqualifies you for government benefits?

Under the system the Liberal/Socialist/Marxist Bastard crowd have constructed, there is no incentive to save -- it is taxed and/or disqualifies people for "benefits!"

Under the NRST, every man, woman and child in America will have an incentive to (and will) save some of their earnings because they will not be penalized for doing so.

Let me tell you a story about a poor Georgia dirt farmer I once knew. In the 1940's, 50's and 60's this poor GA dirt farmer would from time to time sell a calf at the local livestock auction. He'd put 10% of what he got in his savings account at the local bank. Whenever he sold his crops or got paid for his milk or chickens or the eggs he sold, he put 10% of the gross in his savings account.

Just about every GA dirt farmer he knew did the same thing -- it was their "nest egg," to be used in an emergency, to invest in more land, etc.

You get the picture. My Grandfather saved 10% of every nickle he ever earned, and over time, became moderately wealthy. But he never had an indoor bathroom in his house until 1954.

I believe that President Johnson, as part of his "Great Society" scheme, is responsible for the fact that interest earned on a pass book savings account is taxable.

A great irony, isn't it, that a "Populist President" would preside over a regime that took the incentive out of Americans saving for an emergency or an opportunity.

The NRST will restore that incentive, and I believe that every American will respond by saving just a little more than they save today. And that will be a good thing.

[Taxman]

A properly constructed consumption tax will result in lower costs for all businesses in the United States.

The income tax system is far more costly to our economy than any person in government is ever likely to admit, because if they did admit to the real cost, the system would crash, immediately.

HST, the real economic cost to our economy for each dollar of taxes raised is about 65 cents. And that figure is an old one, dating from the 1993 book written by James L. Payne; "Costly Returns. The Burdens of the U.S. Tax System" (San Francisco, ICS Press, 1993).

The real cost today may be as much as $1.00 for each dollar raised in federal taxes. Who knows? You can bet that the U.S. Government is not going to tell us!

The NRST lowers the compliance cost of the tax system to ZERO for an individual, for example. And lowers corporate compliance cost by about 90%. Not to mention eliminating the IRS ($17 billion dollars) and the tax courts (no estimate available).

Just for starters.

[imawit]

Hip Hip Hooray!

Glad to see a knowledgeable tax reformer on Freeper. You might also look at the business section postings.

I have championed income tax as the solution to the current economic woes there. How do you get things going in the right direction, not more Gov. spending, not lower Fed rates, not lower interest rates, not more consumer credit, no more worthless (has to be repaid) cosumer credit but eliminate taxes.

I actually proposed a 30 to 180 day moritorium of income taxes in order to get REAL (not have to be repaid) cash into comumers hands as the solution to the economy and the stock markets. Simple concluding question was is $1000 more in credit or $1000 in a bank account more apt to spur the consumer to buy. Any other solution (Greasspan's) has grave deliterious results to the dollar and trade balances.

[Taxman]

I agree. Rep. Sam Johson, (R-3-TX) has repeatedly introduced H. J. RES. 45 to do just that.

Both H.R. 2525 and H.R. 2717 call for repeal of the 16th.

[Taxman]

Hope you will join with us at http://www.salestax.org and http://www.votr.org and help us get this done!

[webstersII]

This does not appear to be necessarily true: a provision could be negotiated whereby the poorest continue to receive a tax credit.

You miss the whole point. This would perpetuate the existing system, where people vote for whoever is going to give them the best deal.

The idea is to exempt certain items, like food and medicine, not certain income levels. If you exempt certain necessities then it puts everyone on an equal footing from the start. This would make it almost impossible to buy influence with the voters. This is another reason why it's not gonna happen in our lifetime.

[Taxman]

Go agitate somewhere else -- start your own thread.

There is no question that fiat money is a huge problem, but fiat money and the tax system are two different problems.

If you care to comment on fundamental tax reform, and have something positive to say or a legitimate question to ask about the consumption tax, please do so. But don't waste band width, please, with off-topic stuff.

[Taxman]

LOL! Remember, we outnumber them. All we have to do is find each other, join together, and their jig is up.

That is what we are doing, BTW. More and more credible people are calling for an end to this horrible tax system we have.

Won't be long now, and the hated income tax and the IRS will be tossed on the dustbin of history.

[RLK]

So you don't think over-regulation and a high fiscal burden of government distort the price of labor and goods?

They add to the costs of production and should be examined. But a class of people here want an exclusionary focus on yhat element because it is part of a rote-memorized song and dance routine. In reality, the cost of goods and services in this country were prohibitively high 20 or 40 years ago when the regulations effecting production where not that different than those in existence now. This nation was doing very well before we began exporting industries. There is no reason why that could not have continued. Export of industry is largely an arbitrary matter, not necessity. It is an arbitrary trend destroying the economy of this nation.

[TopQuark]

I merely showed that one is not inconsistent with the other. As for incentives, it is a difficult problem. While I am doing some research in this area, I have not understood it well enough to form an opinion.

[mrs9x]

Wealth is desirable, both individually and for society, so that more products can be produced and acquired. Wealth enables us to have a high standard of living - and those that come up with the ideas for new products and provide the best services get rewarded by being able to acquire goods and services.

Now, I know that you are going to say that millionaires and others don't deserve what they get paid. You are entitled to that opinion. But such people are the ones who are innovating or causing new products to be innovated, not the working stiff on an assembly line putting things together. They are the ones who are successfully attracting capital to finance new projects that might change people's lives. So while I agree with you that common laborers are important and do work hard, they are not the brains behind our economy.

[AdamSelene235]

In reality, the cost of goods and services in this country were prohibitively high 20 or 40 years ago when the regulations effecting production where not that different than those in existence now.

There are far fewer obstacles to trade now than there were 20-40 years ago. Back then, half the world was fenced off. Today the Russians can ship timber to the Southeast for less than it costs to harvest trees in Georgia.

This nation was doing very well before we began exporting industries. There is no reason why that could not have continued. Export of industry is largely an arbitrary matter, not necessity. It is an arbitrary trend destroying the economy of this nation.

How do you propose to stop it. I think abolishing corporate taxes, the IRS (go for a flat or fee based tax system), dismantling Social Security (I pay more in SS than I do in rent) would go a long way towards making this nation competitive again. Sure, we'll never have a labor surplus like China (without massive immigration) but we can offer good courts and political stability. Very attractive for most enterprises.

[RLK]

Grave typing error. It hsgould read:

They add to the costs of production and should be examined. But a class of people here want an exclusionary focus on yhat element because it is part of a rote-memorized song and dance routine. In reality, the cost of goods and services in this country were NOT, repeat NOT, prohibitively high 20 or 40 years ago when the regulations effecting production where not that different than those in existence now. This nation was doing very well before we began exporting industries. There is no reason why that could not have continued. Export of industry is largely an arbitrary matter, not necessity. It is an arbitrary trend destroying the economy of this nation.

[Age of Reason]

Wealth is desirable, both individually and for society, so that more products can be produced and acquired.

You're begging the question--why is it important to acquire products?

Apart from food, medical care, a change of clothing, what else do you really need? (There is one more thing--last but not least; but first, your opinion.)

And you still haven't defined wealth.

[jimkress]

I agree 100%. Any change in the curent tax system must be predicated upon first a repeal of the 16th Amendment. Then, the new system could be imposed. Anything else will just result in our being taxed on BOTH income AND the new system.

[Age of Reason]

In reality, the cost of goods and services in this country were prohibitively high 20 or 40 years ago

In reality, the ge-gaw crap is cheaper now; the important stuff like food, housing, and medical care--are out of sight.

Though I'll grant cultural values are cheaper.

[mrs9x]

Wealth is just the sum total of your assets at any given period of time, including housing, money reserves, and all of your possessions.

Why is wealth important? It is just a value judgment. If you don't value wealth, fine, you don't have to value wealth. But those in pursuit of wealth provide the products that you purchase. So if you continue to want good health care, food, a place to live, etc., a competitive system whereby people pursue wealth provides those goods for you.

No one is forcing you to pursue wealth, ie, the maximization of your assets. Nor do I think that it should be worshipped above anything else, ie, family, friends, relationships, etc. It's just that your argument that risk should not be rewarded, etc, smacks of an anti-capitalist tendency. Do you have some envy towards the wealthy or something?

[jimkress]

Apart from food, medical care, a change of clothing, what else do you really need?

What business is it of yours to determine what I need or what I want? I need whatever I think I need and whatever I want. As long as I operate within the law, you have no business interfering with my acquisition of what I determine I want or need.

Your point of view is Marxism at its most absurd and Communism at its most extreme. We live in a (sort of) FREE country, not a Marxist state where self selected arbiters of public conscience (like you) get to decide what's best for everyone else.