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.

[agitator]

I normally don't respond to obnoxious comments like yours but you caught me at an irritable moment.

#1 My comments weren't addressed to you so who the _____ do you think you are trying to condescend to me?

#2 Who elected you to the position of Holy Guardian of the Thread Topic?

#3 I'll decide whether my comments, not addressed to you, are germaine or not.

#4 Thank you for making my point.

#5 I trust this will be the last communication I have with you as I have better things to do and do not enjoy wasting my time.

[Taxman]

I certainly hope so. I don't think I could stand it if you agitated anymore on this thread.

[RLK]

the important stuff like food, housing, and medical care--are out of sight.

-------------------

That's close to what I was getting at. I left out a word and correct it later. What the globalists are saying is that it would be the end of the world, pricewise, is globalism were rejected. Before there was globalism there wasn't a cost of living disaster.

[Age of Reason]

What business is it of yours to determine what I need or what I want?

It would be wiser to ask that question of corporate advertisers.

[steve50]

If they want value added taxes they must have studies that predict revenue from income tax dropping. Duties, excises and tariffs are the Constutionally accepted manner, and the best system devised,imo.

[Tennessean4Bush]

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

"Properly" is the operative word. The article (and others I have read recently) did not inspire confidence in me that the framers of this particular idea had a proper and practical plan ready to implement.

I agree wholeheartedly that a breathtaking amount could be saved on the compliance and collection side, both by the government and by corporate America. Also, this would encourage savings and investment up and down the socio-economic ladder.

However, I am suspicious of a value-added tax as its snowball effects on cost can never be anticipated accurately. In theory, I favor a point-of-consumption tax (i.e., a sales tax) alone with no value-added tax. This is the way businesses are already set up to operate. They already are able to purchase goods on the wholesale market with no tax added if they can show that they use the wholesale goods as raw materials in their point-of-sale product.

Practically speaking, someone will have to do a whole lot of educating the public to show how even though their cost of goods will now go up by 15-20% at least, they will save on a paycheck-by-paycheck basis. Remember, most people earning less than 40,000 per year (a whole heck of a lot of people BTW) do not pay 15-20% of income tax after factoring in mortgage and dependant deductions. So their tax burden will automatically increase. Dramatically, in many cases. While this might be a good thing to encourage savings and spur job creation in theory, practically speaking it is a real tough sale. This will be one argument where the demonRATs will be right that it will be a huge tax cut for the upper brackets being paid for by the lower brackets. While I agree that just charging the same percent for everyone is truly "fair", it is not a practical idea to sell given our current system.

I am certainly open to hearing more explanation. But any explanation that does not carry a very simple sales pitch to Joe "six-pack" Taypayer that explains how this will make him better off is moot.

[Taxman]

Steve, I think that what is happening is that some of the government poobahs are beginning to realize that America is becoming increasingly uncompetitive in the World Marketplace, and they are searching for a tax system to level the playing field.

The "fly in the ointment" is that some other government poobahs like the control that the fed has over our personal and corporate lives, and do not want to give it up.

The Value Added Tax is a government oriented tax -- government is not as disempowered under a VAT as it is under the NRST, and there is a power struggle going on between the (two schools of thought) government poobahs.

The whole issue is clouded by the WTO ruling that our tax system is illegal in respect of foreign trade, and all of the government poobahs know that a major change must be made to keep America competitive in the World Marketplace.

Duties and tariffs are scheduled to be eliminated by the various trade agreements the US has signed, so they are not viable as a source of federal revenue.

Which leaves a border adjustable territorial tax system as the only viable option. It turns out that the VAT and the NRST are acceptable to the WTO, and a carefully constructed Flat Income Tax could also be acceptable (The FIT is really a subtraction method VAT at the business level).

I prefer the NRST as a solution to our tax and trade problems, primarily because it frustrates the government control freak poobahs and maximizes FReedom and Liberty to We the People. Not to mention the spectacular economic growth a NRST will foster or the equality of treatment under the law (now, there is a concept!).

I hope you will join with us (see http://www.salestax.org and http://votr.org) and help us make this happen. We need your help.

[steve50]

Thanks for your reply Taxman and I understand that you feel this is the best option international agreements have left us. IMO the tax structure was oringinally set up as it was for a purpose, this is just another method that allows that purpose to be skirted.

[Taxman]

You are correct: "Properly" is the operative word.

That is where We the People pressure comes into play: We the People must insist that any changes in the tax laws benefit We the People first and the government second.

That is a sea change from the current government poobah's way of thinking, and is as revolutionary a thought as the Declaration of Independence and the U.S. Constitution.

And, it is up to We the People to ensure that this revolutionary thought comes into being.

Like you, I favor the NRST.

And you are correct in saying that: "any explanation that does not carry a very simple sales pitch to Joe "six-pack" Taypayer that explains how this will make him better off is moot."

There are a number of arguments that do, in fact, demonstrate that all Americans will be better off under the NRST than the progressive income tax.

These tax threads contain a wealth of information, and at http://www.salestax.org , http://www.votr.org , http://www.fairtax.org and http://www.cats.org you can find even more information.

I hope you will join with us and help us make this happen. We need your help.

[Taxman]

Agreed. The 16th must be repealed, but not before we shift to the NRST.

Reason? The 16th is permissive. It does not force the Congress to implement an income tax, it merely allows them to.

Think about this: The NRST, when implemented, will cause the US economy to really boom -- there will be roughly a 6 to 9% increase in annual GDP; the personal savings rate will increase markedly from the anemic less-than-one-per-cent rate now realized; there will be more jobs and higher paying jobs available; corporate profits will increase markedly; the stock market will blossom.

Any politician, in that boom NRST environment, who offers to reinstitute an income tax will will be tarred and feathered and run out of town on a rail. The people will not stand for a reduction back to slave status!

In short, we can afford to implement the NRST while we work on repealing the 16th.

HST, "The price of liberty is eternal vigilance." We the People must remain vigilant lest those who would control every aspect of our lives try to reinstate the income tax.

[Taxman]

The Founding Fathers abhorred income taxes, with good reason! Look at the mess we have made of it!

They fully understood that taxing things (duties, excises and tariffs) was a much better way to raise funds for the legitimate purposes of government. And they likewise understood that America was about personal FReedom, including economic FReedom and equality of treatment under the law.

Unfortunately, beginning in 1848 when the Communist Manifesto was published in London, the American people were seduced into believing that "From each according to their ability to each according to their needs."

It took a while, but eventually, the Liberal/Socialist/Marxist Bastards prevailed, and in 1913 the 16th Amendment to the U.S. Constitution passed. Very quickly, the American people were saddled with a progressive income tax, per the second plank of the Communist Manifesto.

The Founding Fathers fully understood that an income tax was a slave tax. They understood what would happen (there being plenty of examples in world history prior to 1776/1787) if an unapportioned income tax were sanctioned by the Constitution -- the primacy of the people over their government was a prime consideration of the Founders -- so they set up a system designed to prevent the primacy of government over the people.

The 16th Amendment fundamentally changed that relationship between the people and the government. Prior to 1913, the government was the slave and the people were its master; after the 16th Amendment passed, the relationship inverted; the people became slaves and the government became the maseter.

Those of us who support the NRST aim to put the people back in charge.

[steve50]

I guess who determines what's taxable and at what rate could make a difference. Food? Stock sales? Higher rates on luxury articles? The potential to abuse is in any system

[Leto]

This particular article is talking about a 13% sales tax not the Fair Tax, this sounds more like the Tauzen proposal, which does't touch the current FICA Taxes.

[Leto]

Here's the problem, Politics is cyclical, Eventually the rats will be back in Power. If HR 2525 is passed and the 16th is not repealed they will reinstitute the Income Tax, guarenteed. They will base it on class warfare and grease the skids with some whining about the "Rich" not paying their "Fair Share". When dealing with rats you ALWAYS have to prepare for worst case scenario's.

Reagan understood how todeal with communist when he said "TRUST BUT VERIFY". Leaving the 16th in place is a receipe for disaster.

Therein lies the problem with the # of rats in congress there is NO WAY that an amendment repealing the 16th will pass.

BTW most people will end up reporting their income to the gov, many goverment programs require means testing. A simple example, do you have kids going to college? Applying for Financial aid? You have to file a FASFA form with the Feds. Doesn't matter BTW whethr the aid is goverment or not. Funds availible through University endowments also requiring filing a FASFA, the gov uses this for compliance with Equal Oportunity laws. None of this is affected by HR2525.

[Pitchfork]

I think the enforcement issue you raise is central to the appeal of this tax. Nothing grates more than a tax unevenly applied. Fairness above all should be a goal of the tax system. One fairness inducing aspect could mesh nicely with a cure for regressivity.

The great thing about a sales tax is that it can't be avoided through loopholes in the tax code or through 'under-the table' pay schemes. Tips, for example, are grossly under-taxed in the current system but a sales tax sees all money the same. Illegal aliens who work for cash also avoid paying for their share of public services.

The problematic regressivity of the sales-tax system could be fixed through some kind of low-income 'rebate on tax paid' system but this would only go to legal citizens and it would be based on payroll tax declaration! So tip earners who didn't pay paroll taxes on those earnings couldn't claim to have made purchases with them and would not get a paid-tax rebate for that portion of thier income. A regressive (for non-citizens) sales tax might serve as a disinsentive for both illegal immigration and payroll tax avoidance for tip earners.

Moreover, one long standing but dubious conservative argument regarding taxation is that by reducing the tax burden on the rich you encourage investment. I've never believed this effect to be as large as proposed because I'm convinced that conspicuous consumption (particularly of imported luxury goods and overseas travel) reduces this investment benefit. If you cut taxes on the rich and they buy BMWs, Mercedes and Lexuses (Lexi?), European designer clothes or take vacations in the south of France then you've only managed to stimulate foreign economies (yes this may come around but only fractionally).

However, a sales tax really does make this principle true by allowing ANYONE to cut thier own taxes (by reducing consumption) in order to save and invest! Reward frugality! Reward honesty! Encourage efficiency! Great ideas!

[elenchus]

Take a look at this...an eye opener from Mary Landrieu:

If the conservative agenda is to have a chance of succeeding and if conservative judges are to gain Senate approval, we must preserve a Republican Senate--which is in greater jeopardy than many realize.

For those who understand why the Louisiana election is crucial to retaining the Senate in the face of possible Republican defections by Chafee and McCain, please see the article just posted on:

"How Suzanne Terrell can Defeat Mary Landrieu"

http://www.freerepublic.com/focus/news/791117/posts

The link provided to the COMPLETE NBC TRANSCRIPT is incorrect, and should be:

http://www.msnbc.com/news/836275.asp

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If you need convincing, also see the post:

Columnist Broder Sees Potential Party Switches by Senators McCain and Chaffee

http://www.freerepublic.com/focus/news/791096/posts

[Capt.YankeeMike]

because poor people generally are poor because they are either stupid or lazy. so how is it fair that i have to give up 50% of MY income to stupid and lazy people just because i am neither stupid nor lazy? You sound like a communist....

[ancient_geezer]

The problematic regressivity of the sales-tax system could be fixed through some kind of low-income 'rebate on tax paid' system but this would only go to legal citizens and it would be based on payroll tax declaration!

Don't see even a payroll declaration as a requirement at all. Just determine that minimum necessary expenditure to live on, The HSS Poverty-line is one such measure which uses price of basket of goods. Then pre-pay every legal resident the amount of sales tax that is expended on that amount (Taxrate * HSSproverty_level).

No payroll declarations, no means testing, no financial statements required at all. It treats every individual the same, and every individual pays the same tax rate at the cash register. No exceptions, no exemptions, one rate at the cash register, one amount paid per individual.

[Age of Reason]

poor people generally are poor because they are either stupid or lazy.

I realize it is comforting to think that, but it's an over simplification.

As for being a communist--I really am not sure what that is.

But I will say this: The earth is too populated for everyone to live well. Therefore the only chance anyone has at being happy is to be among the financial elite and to have the wisdom to use that money well.

Unfortunately, it generally takes a person of narrow focus (not so much a person of great intelligence) to achieve great wealth, while it takes a broad understanding of life to be wise--so the accumulation of a fortune and the wisdom to use it well are almost always mutually exclusive.

Nonetheless, were all things to be evenly divided--even divided in true proportion to a person's ability and effort (could that ever be measured)--no one would have enough to live well.

Therefore, I do believe in capitalism--for if we all only got what we truly deserved, no one would live a good life, and we'd all be doomed to a miserable existence (except for the dull).

So in actuality, I am glad our system is unfair.

Why do I argue otherwise? No matter; it will change nothing anyway.

[Taxman]

I did not say that the 16th should not be repealed -- I said that the NRST could be in place while the repeal process is on-going. During the process, it will require an enormous amount of energy and effort by those of us committed to FReedom -- but we will prevail.

Also, I think that it would be political suicide for a politician to suggest that an income tax be re-instituted after the NRST has been in place for as few as two years.

After a couple of years, the class warfare argument will not hold water -- it didn't work very well for the Democrats in this past election, and I do not expect it to be an effective argument ever again.

Too many Americans have seen the truth, and the class warfare arguments are a Liberal/Socialist/Marxist Bastard lie.

Didn't say it would be easy -- but it can be done. Remember, we outnumber the Liberal/Socialist/Marxist Bastards.

Agreed, means testing is not covered by H.R. 2525. HST, if a person wants to disclose to a government agency, a University (or private company, for that matter) their most private financial situation, that is their business.

What I oppose is mandatory (as in the normal course of business) disclosure of private financial information.

In a FRee country, I should have the right to decide who gets a look at my financial records. It is no one's business how much money I make! Particularly the governments!