Posted on 02/14/2003 8:02:16 AM PST by conservativecorner
And true to their hypocritical nature, consumption taxes are also their favorite method of social engineering.
Just look at what they do with the excise (sales) tax on alcohol and tobacco.
Can you imagine what they'd do when Pandora's box is opened and a nationwide sales tax is placed on all retail sales?
I bet Chuckie Schumer would be the first to jump in with a proposal for a 500% NRST on handguns, hunting rifles and ammo.
The environuts will insist on higher NRST on SUVs and an exemption on bicyles and Yugos.
The Food Nazis will want a higher sales tax on Fast Food, red meat, etc. etc.
PETA will be demanding "protectionist" tax levels for all the abused little critters of the world.
Feminazis will be squawking that a sales tax on abortionist's "services" violates their privacy.
This national sales tax proposal is idiocy.
It just expands the number of items the congress critters will tax us on and we'll wind up keeping some kind of income tax anyway.
If there were no taxes at all on saving, we would per se have a consumption tax system, even if there were no direct taxes on sales.
Bruce Bartlett is a proponent of the Flat Tax, simply put a tax on wages combined with at VAT. His description of such is based in the economic equivalency:
Consumption (i.e. expenditure) = Income - savings.
A true consumption tax is laid on the left side of the equation (expenditure),
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
while VATs & income taxes are laid on the right hand side of the equation (Income - savings).
None other than the father of the flat tax, Robert Hall of Stanford University (along with Alvin Rabushka), in his 1995 Ways and Means Committee testimony said, "The Hall-Rabushka flat tax is a value-added tax."
Which was pointed out again in additional hearings in April of 2000:
http://waysandmeans.house.gov/fullcomm/106cong/4-11-00/4-11kotl.htm
"Robert Hall, one of the originators of the proposal(Flat Tax), who describes his Flat Tax as, effectively, a Value Added Tax. A value added tax taxes output less investment (because firms get to deduct their investment.)"
"The Flat Tax differs from a VAT in only two respects. First, it asks workers, rather than firm managers, to mail in the check for the tax payment on that portion of output paid to them as wages. Second, it provides a subsidy to workers with low wages."
The Flat Tax; Chapter 3, by Robert Hall and Alvin Rabushka
In our system, all income is classified as either business income or wages (including salaries and retirement benefits). The system is airtight. Taxes on both types of income are equal. The wage tax has features to make the overall system progressive. Both taxes have postcard forms. The low tax rate of 19 percent is enough to match the revenue of the federal tax system as it existed in 1993, the last full year of data available as we write. Here is the logic of our system, stripped to basics: We want to tax consumption. The public does one of two things with its incomespends it or invests it. We can measure consumption as income minus investment. A really simple tax would just have each firm pay tax on the total amount of income generated by the firm less that firms investment in plant and equipment. The value-added tax works just that way. But a value-added tax is unfair because it is not progressive. Thats why we break the tax in two. The firm pays tax on all the income generated at the firm except the income paid to its workers. The workers pay tax on what they earn, and the tax they pay is progressive. To measure the total amount of income generated at a business, the best approach is to take the total receipts of the firm over the year and subtract the payments the firm has made to its workers and suppliers. This approach guarantees a comprehensive tax base. The successful value-added taxes in Europe work this way. The base for the business tax is the following: Total revenue from sales of goods and services less purchases of inputs from other firms less wages, salaries, and pensions paid to workers less purchases of plant and equipment The other piece is the wage tax. Each family pays 19 percent of its wage, salary, and pension income over a family allowance (the allowance makes the system progressive). The base for the compensation tax is total wages, salaries, and retirement benefits less the total amount of family allowances. |
FLAT TAX, VAT TAX, ANYTHING BUT THAT TAX; Duke Law Magazine, Spring 96:
- "The flat tax is essentially a VAT, with a personalized element for wages. Thus, the business tax allows deduction of all purchases -- as does a VAT -- but also allows deduction of wages. The wage income that is taken out of the VAT base, however, is also taxed, but is assessed against the individual wage-earner, not against the business."
Concerning Proposals for a Flat-Rate Consumption Tax
Before the Joint Economic Committee, Statement of Robert S. McIntyre
Director, Citizens for Tax Justice May 17, 1995
- The Hall-Rabushka flat tax, and its Armey and Specter variants, would replace the current personal and corporate income taxes with a new tax that is conceptually identical to a "subtraction-method" value-added tax, a version of a national sales tax, with two major modifications: First, imports would be exempt from the flat tax, while exports would be subject to tax. Second, to mitigate the regressivity of the VAT, cash wages, pensions received and other cash earned income would be taken out of the VAT base (i.e., deducted by businesses) and taxed directly to individuals, with exemptions. Thus, structurally, the flat tax is exactly equal to a value-added tax with an import incentive, an export disincentive and a personal rebate based on a percentage of a capped amount of cash wages, pensions and other earned income.Businesses compute a typical "subtraction-method" value-added tax by adding up their taxable gross receipts and subtracting the cost of previously taxed items. Thus, in computing the VAT, businesses deduct their purchases from other businesses, whether for supplies, services, machines, land or whatever. (In another, more common form of a value-added tax, known as a "credit-invoice" VAT, businesses get a tax credit for taxes paid on purchased items. In general, this produces the same result as a "subtraction-method" VAT.) Ultimately, the total tax base for a VAT is equal to retail sales of taxable items, and a VAT is thus equivalent to a retail sales tax. As noted, however, the flat tax base differs from a usual VAT, however, in that wages are deducted by businesses, and taxed at the personal level
CONSUMPTION TAX PROPOSALS; 1996 Deloitte & Touche LLP
- One concern associated with the flat tax is whether the low advertised rates will produce the same amounts of revenue as the current income tax. A June 7, 1995, Treasury Department analysis of a flat-tax plan similar to the Armey proposal, concluded that a rate of at least 22.9 percent would be needed to make the plan revenue neutral, that is, it would allow the government to raise as much revenue as is currently raised. Although the proposal is designed to raise less revenue than present law, the extent of the shortfall will concern policymakers.
- The Armey bill, H.R. 2060, would replace the current corporate income tax with a tax on business activities equal to 20 percent (17 percent after 1997) of business taxable income. The tax would apply to every person engaged in a business activity, whether an individual, partnership, corporation, or otherwise. Taxable business income would be gross active income (that is, income other than investment income) reduced by an array of business deductions.
- This business activity tax resembles a VAT computed by subtracting the costs of inputs from gross receipts, except that H.R. 2060 allows a deduction for cash wage expenses. Note that, under the bill, cash wages are subject to tax at the individual level at the same flat rate applicable to business profits. Thus, the combination of the business activities tax and the individual tax is roughly equivalent to a VAT. In addition, taxing wages at the individual level allows a generous personal exemption that makes the personal tax more progressive. To ensure that compensation is taxed once, tax-exempt entities that pay compensation other than as cash or retirement plan contributions would be subject to an excise tax.
The choice is yours between real change to a National Retail Sales Tax, or a political fiction to perpetuate the mistakes of the the European Union's VAT plus income taxes and income/payroll tax systems.
That's an asinine remark, define "wealthy".
interest, dividends, rent and capital gains -- are fully taxed. Under a consumption tax, they would be exempt
Not entirely true. If you pay rent you'd pay tax on it. Some economists suggest homeowners should pay tax on imputed rent. Interest would be taxed on implicit and explicit "financial intermediation services" to include interest paid.
According to the Federation of Tax Administrators, 45 states currently have general sales taxes, varying between 2.9 percent in Colorado and 7 percent in Mississippi and Rhode Island. Local sales taxes can raise the total tax as high as 9.75 percent (in Oklahoma), with excise taxes on some specific goods on top. The Federal Government also has many excise taxes as well, especially on gasoline, alcohol and tobacco.
The so called "consumption taxes" are actually a tax "of the gross payment" ...all those state sales taxes, excise taxes, fees etc listed above would be taxed once again with the "gross payment" tax.
Paying taxes on taxes REDUCES your disposable income, you only think you'll have more money to spend/invest....government spending what it is, "how could it be otherwise"?
THAT'S the purpose of the Income Tax, pure and simple. It also, of course, has the side benefit of being able to be used to enslave the votes of the underclass, but that's not its root.
Michael
No matter how tax revenues are raised, reduction of government spending is really the key to solving the Tax Crisis.
Removing complexity in accounting, tax planning and reporting is key to removing the burdensome costs of the income/payroll tax system and returning liberty and privacy to the individual:
Flatten the Tax Code before it Flattens Us, Lawrence W. Reed; Makinac Center April 1, '97
The work of economist James L. Payne is perhaps the most authoritative and exhaustive available on the cost of todays federal income tax code. He has demonstrated that most of the expense of compliance does not show up on the governments books because businesses and individuals in the private sector are paying itin time and bills from tax preparers. In his 1993 book, Costly Returns: The Burdens of the U.S. Tax System, Payne assembled data from the IRS and other sourcespublic and privateand arrived at a startling conclusion: For every tax dollar collected and spent, Americans pay an additional 65 cents in collection and compliance costs!
We must . . . End Tax Slavery Now; Nov '97
by Jarret B. WollsteinHOW MUCH DO YOU REALLY PAY?
According to the Tax Foundation, in 1994 the average American paid 22.4% of his or her income in federal taxes, plus 11.8% in state and local taxes - 34.2% total.
But that's just the beginning! Dr. James Payne of the University of California found that in addition to direct taxes we also pay huge, hidden taxes including:
- Compliance costs - record keeping, monies spent on tax planning, computers and software purchased to fulfill IRS requirements, etc.
- Enforcement costs - IRS audits, field investigations, service center corrections, criminal investigations, litigation, and forced collections.
- Emotional, moral and cultural costs - families forced onto welfare, time and creative energy lost figuring out how to avoid taxes, etc.
For every $1 we pay in direct taxes, we spend an additional $0.65 in compliance costs. And even that figure doesn't include the cost of import duties, license fees and other government regulations.
Repealing Federal income and payroll taxes accomplishes the reduction of burdens and frees the individual from the inherent intrusiveness of the current system:
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 programs is key to tax rate reductions:
23%........... HR2525 (NRST) rate on consumption expenditure
14.91% ..... rate if Social Security and Medicare were eliminated
14% .......... rate if Nat'l Endowment for the Arts were eliminated
11.9%........ rate if Dept. of Education were eliminated
10% .......... rate if welfare were eliminated
9.8%.......... rate if foreign aid were eliminated
etc.
Hmmmmmm....... It's do able, with time and effort, once the blinders are removed from the electorate and every one participates proportionately in the tax system.
Walter Williams, World Net Daily, 10-25-2000
According to the most recent U.S. Treasury Department figures, in 1997 the top 1 percent of income-earners (those with income of $250,000 and higher) paid 33 percent of all federal income taxes. The top 5 percent of income-earners ($108,000 and over) paid 52 percent, and the top 50 percent ($36,000 and over) paid 96 percent of income taxes. Guess what the bottom 50 percent of income earners paid?
If you're among those who pay little or no federal income taxes, what do you care about tax cuts? Moreover, if you think tax cuts pose a threat to government handout programs, you might be openly hostile and support Al Gore's silly "risky scheme" talk. So many Americans paying little or no federal taxes makes for a natural spending constituency. It's like me in the restaurant: What do I care about extravagance if you're footing the bill?
Milton Friedman as quoted by Northwest Florida Daily News, 10-16-2000:
- "If we're to have an income tax, it's a good thing for everyone to pay at least a nominal amount," he said. "If non-taxpayers become a majority in society, what would restrain them from voting for ever higher taxes on others?"
Since the typical mindset is corporations/businesses don't pay taxes they simply collect them, and as the article states, "consumption is roughly proportional to income, because over a lifetime we eventually consume all our income", I suggest we eliminate taxes on individuals and tax only corporations/businesses.
THAT'S the purpose of the Income Tax, pure and simple. It also, of course, has the side benefit of being able to be used to enslave the votes of the underclass, but that's not its root.
THe root of the income tax is political and economic control, pure and simple:
To remove taxation 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.
A government which robs Peter to pay Paul can always depend on the support of Paul.
-George Bernard Shaw
Liberty and freedom have a price, responsibility. If that price is avoided there are no brakes on the growth of government, the ultimate result is the end of freedom through creeping socialism.
Right now the bottom 60% perceive little to no "Individual Income Tax" burden,(in many cases even a handout) and 70% of the voting public clamors for more from government looking for the top 40% of income earners/producers to foot the bill. That perception continues to grow ever stronger by eliminating even more participants from the Federal Individual Income Tax rolls as proposed in the tax reduction proposals through changes in personal exemption limits and other mechanisms such as the EITC.
The Original Intent of the individual income tax is for political and social control not revenue collection. The Individual Income tax is maintained to establish and hold every person in the country perpetual legal jeopardy. That is a situation that must end with the repeal of the income tax from the statutes, and the prohibition of its use by Constitutional amendment that future generations will not face the same manner of manipulation and interference in their lives.
There was good reason why Karl Marx and the Communist Party makes the progressive/graduated income tax the 2nd plank of the Manifesto of the Communist Party, by Karl Marx and Frederick Engels, published in 1848. We should never forget nor overlook the philosophical underpinnings of that choice:
"The proletariat will use its political supremacy to wrest, by degree, all capital from the bourgeoisie, to centralize all instruments of production in the hands of the state ... . Of course, in the beginning, this cannot be effected except by means of despotic inroads on the rights of property ... . These measures will, of course, be different in different countries. Nevertheless, in most advanced countries, the following will be pretty generally applicable.
1. Abolition of property in land and application of all rents of land to public purposes.
2. A heavy progressive or graduated income tax.
3. Abolition of all rights of inheritance.
4. Confiscation of the property of all emigrants and rebels.
5. Centralization of credit in the banks of the state, by means of a national bank with state capital and an exclusive monopoly.
6. Centralization of the means of communication and transport in he hands of the state.
7. Extension of factories and instruments of production owned by the state; the bringing into cultivation of waste lands, and the improvement of the soil generally in accordance with a common plan.
8. Equal obligation of all to work. Establishment of industrial armies, especially for agriculture.
9. Combination of agriculture with manufacturing industries; gradual abolition of all the distinction between town and country by a more equable distribution of the populace over the country.
10. Free education for all children in public schools. Abolition of children's factory labor in its present form. Combination of education with industrial production, etc. "
I suggest we eliminate taxes on individuals and tax only corporations/businesses.
A government which robs Peter to pay Paul can always depend on the support of Paul.
-George Bernard Shaw
- "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."
Sir Alex Fraser Tytler (1742-1813). Scottish jurist and historian:
"A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largess from the public treasury. From that time on the majority always votes for the candidates promising the most benefits from the public treasury, with the results that a democracy always collapses over loose fiscal policy, always followed by a dictatorship.
The average age of the world's great civilizations has been 200 years. These nations have progressed through this sequence:
from bondage to spiritual faith;
from spiritual faith to great courage;
from courage to liberty;
from liberty to abundance;
from abundance to selfishness;
from selfishness to complacency;
from complacency to apathy;
from apathy to dependency;
from dependency back again to bondage."
The founders didn't think so. They banned direct taxation on people.
Defense of the Income tax should be done at www.imaliberal.com
They also preferred the tariff, rather than the excise tax, as the least intrusive mode of taxation.
Furthermore, the first excise tax they attempted to impose (on whiskey) led to open rebellion among the very patriots who shed their blood to win our Independence.
So are you ready to advocate discarding the income tax? In any form? Flat or graduated?
As for tarriffs, it's always easier to tax people other than those who can vote.
They also preferred the tariff, rather than the excise tax, as the least intrusive mode of taxation.
As well as hidden from view of the electorate so it could be raised without accountability. The people still paid the tax as became embedded within the price they paid for their goods.
Just what rate do you figure such a tariff to replace income and payroll taxes should be?
Today the balance of imports to domestic business is
2001 imports goods & services = 1,167.2 + 215.8 = $1,183.0 billions
2001 domestic goods and services = 8,416.1billions
The extreme reverse of the conditions that existed at the beginning years of this nation.
Figuring that collections of taxes from citizens through tariffs on imports can be the backbone of federal revenues today is nothing but a pipedream.
As with any other mode of taxation, I believe that a fixed, flat rate is most equitable.
This holds true whether one is discussing income tax, tariffs or excise taxes.
As for tarriffs, it's always easier to tax people other than those who can vote.
Nobody is forcing foreigners to ship their goods here,
and I see no reason to extend them suffrage rights as if they were citizens.
Downsizing the bloated federal bureaucracy is never an option that you'd even consider, is it?
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