Posted on 02/08/2003 5:56:38 PM PST by Bigun
White House Floats Idea of Dropping Income Tax Overhaul By EDMUND L. ANDREWS
WASHINGTON, Feb. 7 — President Bush, having already set off a firestorm over his proposals to cut taxes and revamp retirement accounts, suggested today that the time might be near to drop the income tax as a whole and replace it with some form of consumption tax...
(Excerpt) Read more at nytimes.com ...
OK, that's a decent point. However, the primary political influence that export politics has over our government is in the area of foreign policy. But when we're dependent on the influx of cheap goods from China and elsewhere, this gives these governments direct influence over our domestic economy, independent of whatever direct influence it might give them over our government. The problem is compounded by our trade deficit, which enables these governments to hoard dollars and use them to influence our financial affairs. Further still, there's also more than just economic influence.
This of course doesn't even get into what happens when we start becoming dependent on certain countries for certain products. If China or Japan decide not to increase their quota for American timber, some people in the timber business might not make as much money as they otherwise would. But if Saudi Arabia starts interrupting the flow of oil to us, that kind of thing can create shock waves.
Constitution, Article I Section 8: The Congress shall have Power ... To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;
Do tell. Tariffs are regulation of foreign commerce, one of the more efficient methods. While we're quoting from the Constitution:
Constitution, Article I, Section 8: The Congress shall have Power... To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers....
Nor are they particularly effective in achieving a desired result where foreign politics are concerned since they can only be laid upon our own populace under the constitution.
That's an argument I'd file in the same category of the question of whether the bat hits the ball or the ball hits the bat. If you extract water from one portion of a cup, the water level won't decrease in only that section while staying the same everywhere else. Likewise, if you tax a business transaction, regardless of where the tax is nominally applied, you're taxing both (or all) parties to the transaction. It's inevitable.
The problem is compounded by our trade deficit, which enables these governments to hoard dollars and use them to influence our financial affairs.
The hoard of dollars is an ephemeral mirage. Since the introduction of the FRN backed by national debt, it becomes a wasting asset that if not quickly returned in trade it becomes valueless with time.
We receive hard goods, assets and resources and preserve our resources for those critical times when they are not available from the world (i.e. war). They receive a trade dollar that depreciates. Who comes out ahead in the long run?
Unfortunately for our own people, those who hold on to that "dollar" not putting it to work in our economy suffer the same fate. Ask any one on a fixed retirement income as to what that means.
However, the primary political influence that export politics has over our government is in the area of foreign policy.
Is that not what I have stated. From our perspect, the drive for the maximum immediate return is our own undoing. We as an impatient populace with short time horizons for gratification, place our government at disadvantage in the realm of international agreements. The political influence derives from our own demands, not from some government overbeing seeking a malicious power over or citizenry.
But when we're dependent on the influx of cheap goods from China and elsewhere, this gives these governments direct influence over our domestic economy
The dependancy is more apparent than real. The benefit accrues to our own economy in the form of maintaining competitive pricing pressures and an advantage to the American consumer. I foreign influence imposes a cost greater than we wish to pay as a people, the fix lay in the Commerce Clause when the American consumer wants it used.
As far as your hyperlink,
China is set to allow News Corporation and AOL Time Warner access to its domestic television audiences in return for their agreeing to distribute a Chinese government-sponsored channel in the US.
If we demand access to the market, what do you expect? Is that not merely direct evidence of what I stated that Export, in this case demand for access to their television markets, as the driving force in foreign intrusions into our affairs? If we cannot countenance a Chinese government sponsored channel in the US. The commerce clause provides the political tool to limit that access. That is called the exercise of sovereignty, but only comes about with the will to exercise it.
You seem to expect access to other nations without condition. That is not the way it works when open societies attempt to enter the markets of closed societies. Demand entry, they demand concessions. What do you expect? If they concessions are a greater price than the nation is willing to pay, then don't enter the agreement, exercise restraint and don't enter the agreement, there is no leverage they can apply without our conceeding it to them.
But if Saudi Arabia starts interrupting the flow of oil to us, that kind of thing can create shock waves.
Yep, like encouraging us towards developing our own resources, when international sources place the price high enough to make it necessary to do so. In the meantime, they give us their consumable oil, we give them depreciating dollars at a very low cost to our nation. If the danger is greater than we care to put up with, there is always the Commerce Clause, when we decide as a nation to impose that limitation on ourselves.
The choices are, and always have been our own. The consequences of bad choices as well as good one come home to roost. That is what sovereignty means, and I certainly do not see any diminishement in our choice to act in our own interests when we choose to do so.
Likewise, if you tax a business transaction, regardless of where the tax is nominally applied, you're taxing both (or all) parties to the transaction.
Lets see, importer(an American) buys goods from foreign source, pays import duties to bring it in to nation for sale.
To make a profit, the importer must resell said goods for tariff, + cost of goods + his labor costs. If he is unable to make a profit, an American(importer) pays the tax with a loss and possible failure of the business, If he sells with profit the consumer pays the tax. Either case, no tax is passed on to a foreign interest, especially one that can low ball its human and natural resources to the profit of a small few in the ruling elite.
It's inevitable.
Not in an open society bargaining with a closed oligarchy. The open society pays the freight or doesn't trade, the closed society simply expends its resources for whatever its rulers will settle for on the backs of it serfs in a world market playing the same game. Serfs in closed societies are renewable and expendable commodities. At least until the nation implodes (e.g. NK, Iraq, et al)
That's an argument I'd file in the same category of the question of whether the bat hits the ball or the ball hits the bat.
Or the bat does hits a different ball. World trade involves more than one bat and one ball.
If you extract water from one portion of a cup, the water level won't decrease in only that section while staying the same everywhere else.
What what does a small ruling minority care about the whole cup from which it extracts its current pleasure. From their view once their is always sufficient to their desires.
Your analogs do not reflect the realities of a world of many closed societies.
Laws which shall be necessary and proper for carrying into Execution the foregoing Powers
Constrained by the enumerated powers.
The limit of taxation is to pay debt, and provide the revenue necessary to provide Common Defense and provide for general welfare of the United States. That general welfare by the way is specifically delimited by the enumerated powers nothing more.
To Provide is to make provision (i.e. pay the costs) attendant to.
Now you may wish to see taxes used as a regulation, I for one do not care to. To open the door to tax as regulation, is to give credence to an authority to levy $2.00 tax on a pack of cigarettes for someone elses idea of what is healthy for you in the name of Regulation of Commerce.
Seems we should be attempting to discourage put better limits on such exercise of power, not encourage it in my estimation.
The Dominating Intent of the income tax is for political and social control not revenue collection. We should not encourage the use of the power to tax to such ends. Exercise the Commerce Clause directly in the regulation by statute, indirect control of societies through taxation regardless of the kind of tax is damaging to the principles of liberty and exercise of individual responsiblity.
"History affords us many instances of the ruin of states...the ordaining of laws in favor of one part of the nation to the prejudice and oppression of another, is certainly the most erroneous and mistaken policy...An equal dispensation of protection, rights, privileges, and advantages, is what every part is entitled to, and ought to enjoy... "
B. Franklin
Better than yet another law or tax, if you object to China's or any other nation's "intrusion" into our markets or politics through economic access, you are free to exercise your individual power to not buy said products. Full economic democracy, within a political republic. Your unalienable right, so go to it.
Exercise your 1st amendment rights allowing you to convince other citizens to join in. When a sufficient number of individual citizens work to common end, you will achieve your goals through market dynamics.
When you ask government to impose selective taxes for political and social goals in one sector of our nation, how can you credibly object to the like use of taxation to intrudes political or social control over your interests?
John Linder (R Georgia) offers a comprehensive bill to kill all income and payroll taxes outright, and provide a IRS free replacement:
H.R.25
SPONSOR: Rep Linder, John (introduced 01/7/2003)
A bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national retail sales tax to be administered primarily by the States.
Refer: http://www.fairtax.org & http://www.salestax.org
Removing the income/payroll tax system from the backs of business will allow the shelf price of goods and services to drop substantially. With Linder's NRST proposal, the total payment of NRST + taxfree price of goods will be about the same as what you pay now under the current tax system.
Our income/payroll tax system embeds federal taxes into the price of all goods and services.
I researched the effect of repealing all income and payroll taxes laid on business on the theory that we as individual consumers end up paying those taxes at the retail counter through the sales receipts of businesses from which all taxes are paid.
The following article covers the mechanism on how the current Federal tax system propagates and is embedded into consumption expenditure.
DO YOU PAY YOUR INCOME TAX
AT THE SUPERMARKET?
by D. Sherman Cox J.D. L.L.M. Taxation
The 24% in the article considers only those factors actually paid to government out of impositions on the business in complying with the income, payroll, excise & tariff tax laws.
I also refer you to the section of the following article about the Income/Payroll tax system and its impact on our economy "A. Hidden Upstream Taxes. " paragraph 39.
"[39] Dr. Dale Jorgenson, Chairman of Harvard University's Economics Department, believes that the price of goods and services are inflated by about 20 percent or more by upstream taxes consumers ultimately bear. In a recent paper Dr. Jorgenson estimated the built-in taxes contained in the price of goods and services. /22/ In the chart above, he quantified the hidden component of tax, estimating that producer prices would fall on repeal of upstream taxes an average of about 22 percent."
Looking at the accompanying chart, the range of values from industry to industry appears to be about 12-25%.
Economists Gary and Aldonna Robbins of the Texas-based Institute for Public Policy examined the case of dry cleaning a shirt, with a particular eye toward uncovering the hidden costs of taxes in price.
The Robbin's attributed over 33.6% of "consumer prices" to be due to federal taxation passed on to the customer.
The Federal Tax System
http://www.cbo.gov/showdoc.cfm?index=2125&sequence=0&from=1#pt1
From the Table 1 we may extract the proportionate contributions of each sector of taxes as they contribute to consumer price for the year 2000.
Those tax components which will not change prices as a consequence of enactment of HR2525
============================
Adjust for a conservative $600billion(1995 figure, AGCA '00, Payne '95, PillaBartlettNorquist '95 ) interest & cost of compliance effects.
Estimated change in consumption prices as consequence of enactment of a National Retail Sales Tax, repealing all business income and payroll taxes:
33.6*(1186.5/1945) = 20.5% in consumption prices
Which compares well with the Jorgenson empirical study of 22% fall in producer prices.
The two sources are in reasonable agreement, and I see 20-23% a reasonable value to expect prices to fall not only for customers here in the United States, but in our exports as well making them far more competitive on international markets.
Take a 22% decline in consumer prices, then and an NRST you end up with a total payment near the same as what you pay now for goods an services with advantage that you no longer have federal individual income taxes or FICA extracted out of your gross income, you get to keep your whole check instead of Uncle extracting his cut before you have a chance to decide what to do with it.
The government may tax by imposing a direct tax on states, based on the number of citizens in each state.
Actually the Federal government is forbidden to tax state governments. It may however impose a property tax (i.e direct tax) on individual citizens with the amount imposed on the citizens of each state apportioned in accord with state population.
Be careful you might get what you ask for.
This is an example of the direct tax you apparently desire to have the federal government apply to you:
| Chapter XVI. An Act for the assesment and collection of direct taxes and internal duties.(a) | |
| Sec. 1 | Establishment of of direct tax collection districts |
| Sec. 2 | Qualifications & Appointment of assessor & collector for disticts.
|
| Sec. 3 | Assessor to divide tax district into assessment districts, under supervision of the Secretary of Treasury, and appoint freeholders as assistant assessors. |
| Sec. 4 | The Secretary of the Treasury shall establish regulations suitable and necessary for carrying act into effect.
|
| Sec. 5 | Direct tax laid on all property except State or Federally owned properties. |
| Sec. 6 | Assistants shall require property owners, caretakers or managers to provide lists of taxable property.. |
| Sec. 7 | Assistant may assist in preparing a written list for those who are unprepared to exhibit a written list when required. |
| Sec. 8 | Person delivering or preparing a false or fraudulent list shall be subject to fine on conviction before a court of competent jurisdiction and pay all costs and charges of prosecution. |
| Sec. 9 | Written notice to deliver property list to assessor when person absent from property when assessor calls to receive such a list. |
| Sec. 10 | If any person on being notified or required to present property list, refuses or neglects to give such, the district assessor is authorised to make the list to the best he can obtain on his own view and information. A person so failing, except for reason of health or absense from home, shall forfeit and pay a $100 plus costs of suit to recover. |
| Sec. 11 | District assessor shall make property list for properties which owner or managers are not resident and present in the district. |
| Sec. 12 | None resident owners of property as above, can provide a list on their own, rather than the assessor making list above. |
| Sec. 13 | Assistant assessors shall make lists of persons liable to pay tax on properties, with the value and assessment of the objects liable to taxation and when required by principle assessor the amount of direct tax, within each district. |
| Sec. 14 | Principal assessor shall advertise in newspapers and by written notifications the place where assessment lists may be seen and examined to receive appeals regarding erroneous or excessive assessments. |
| Sec. 15 | Whenever Quotas or portions of direct tax payable by the states, shall be laid and apportioned by law on the counties, state, or state districts. The principal assessor shall have power to revise, adjust, and equalise the valuation of properties by deducting or adding a percentage as shall appear just and equitable. |
| Sec. 16 | *** |
And it may tax by tariff and duty. Both methods would be a fair way to rid ourselves of the income tax.
You left out excise.
That be as it may, you seem to prefer a tax hidden from sight to one impose where you can see. I suppose ostrich's feel much the same way. Guess they figure hiding their head in the sand provides a degree of camoflage by making in them look like a bush or tree. Only problem being them the buzzards that have a tendency to roots on such bushes crapping all over them.
We are all paying through the nose, rich and poor while politicians play the tune of envy and resentment that Americans continue to respond to not understanding the full picture what is happening to them in hidden taxes like tariffs and duties, corporate excises, general corporate imposts like FICA and the corporate income tax, all of which are paid out of the consumer's (i.e. citizen's) pocket book through the price paid for those products .
The NRST is a means to open VOTERS eyes to the reality of the burden imposed on them. Until that happens you can expect perpetual growth of government without the brakes we desparately need.
To remove taxation from the sight of the individual, is to remove the goad which assures accountability of government to the electorate. Federal tax rates are high because a majority of the electorate do not share proportionately in the burden their demand for largesse imposes on the minority of citizens.
The siren call for representation without taxation is the formula that got us where we are at today. The ability to hide or disguise taxation from the view of large sectors of the electorate allows the Congress to get away with the creation of the evergrowing monster that it fosters.
Liberty and freedom have a price, responsibility. When that price appears to be avoided there are no brakes on the growth of government, the ultimate result is the end of freedom through creeping socialism.
I swear, Bush keeps on taking away our rights and trying to start WW3, and now he wants to rob the poor people to help his rich friends. What did I do to this nation when I voted for him? I feel some serious voter's remorse about now.
You give your agenda away.
- "There has been a shift in the relationship between individuals and government, he argues, such that fewer and fewer are paying taxes at the same time that more and more are receiving increasingly generous benefits. If it becomes the case that most voters do not bear a financial burden for this largess, then there will be little to restrain--and significant political incentives to encourage--the continued growth of government. And at that point, DeMint warns, we have reached a major crisis in our democracy."
Milton Friedman as quoted by Northwest Florida Daily News, 10-16-2000:
- "If non-taxpayers become a majority in society, what would restrain them from voting for ever higher taxes on others?"
70% of the voting public clamors for more from government looking for the top 40% of income earners/producers to foot the bill.
In the meantime, they give us their consumable oil, we give them depreciating dollars at a very low cost to our nation.
You're making the assumption that these countries are too stupid to see when they're on the losing end of a deal. They're not. And the more "closed" the society, the more likely that those in charge have a free hand to make sure they have the policies that in their judgment work best for them.
If they're hoarding dollars, then they can make the currency depreciate a lot faster than it's currently depreciating. The trade deficit's roughly equal to the supply of dollars in circulation, so if they're hoarding the dollars, then all that money isn't counting towards inflation, until they decide to make it count. If they're not hoarding the dollars, then they're most likely investing them here, which, in the case of closed societies, would effectively give their government greater and greater influence over our economic affairs. Either way, it's not a pleasant situation.
Even closed societies have limits. My body is a "closed society", too, but that doesn't mean someone can keep putting greater and greater burdens on me and I won't notice the difference.
At least until the nation implodes (e.g. NK, Iraq, et al)
It's the ones that know how not to implode that cause the greater problem.
Except that Congress doesn't have plenary power to regulate commerce, but only commerce between states, and with foreign entities. And since Congress can't tax something only when it passes between states (as that would be a tax on articles exported from a state), that would completely close the door to internal regulatory taxation.
And in any case, I've stated that what I'm advocating is a tariff designed for maximum revenue, so it could be said that it'd merely replace the revenue that would be derived from other sources. I said at the beginning that since we have to pick some method of raising money, we might as well get as much mileage as we can out of one that protects national sovereignty at the same time.
That's like saying that if I don't think government's spending enough on national defense, I can always donate money to that purpose whenever I want, and encourage others to do so as well. Very specious argument.
When you ask government to impose selective taxes for political and social goals in one sector of our nation, how can you credibly object to the like use of taxation to intrudes political or social control over your interests?
I don't expect my government to do a whole lot for me. But I do expect it to defend the country from foreign control. That's what it's there for. So no, I completely reject the suggestion that by demanding that government do its legitimate job, I'm somehow authorizing it to assume total control over society.
If I may butt in - forbidden how? I'm not aware of any constitutional prohibition.
A government can tax its own functions but not those of another government. Madison made the base principal behind the authority of federal government under the Constitution very clear.
James Madison, Federalist #39:
Contrary to popular terminology we have a "NATIONAL" government under the Constitution not "FEDERAL". Just as we are a REPUBLIC and not a confederacy nor a "DEMOCRACY.
As far as Quotes and such being collectable by state, the may be asked to do so, but not compelled. The ultimate power the National government wields is the power to require compliance of the individual within the state, which is why all examples of the imposition of direct taxes included provision for the Federal government to demand payment of assessed federal tax immediately from the land owner should the state choose not to act as collection agent in gathering those taxes:
James Madison, Federalist #45:
The Courts enforce the Constitution limits of taxation in just that light.
We are not operating under the Articles of Confederation that some folks seem to want us to be, we are operating under the Constitution of the United States. The Articles failed and the nation almost dissolved over the inability of a "FEDERAL" government to enforce the collection of taxes from states short of going to war with them. That is one of the basic reasons why we now have the Constitution.
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