THE NATIONAL SALES TAX HOAX

There is an important distinction to be made concerning a "national sales tax" as proposed to replace current taxation, and the method of taxing consumption as intended by the Founding Fathers. A national sales tax would give Congress an across the board percentage of our economy by laying an internal tax, whether such revenue is needed or not. The Founder's method of taxing consumption began with an external tax on imports at our water's edge, and was extended to reach internal consumption only if external taxation were found insufficient.

It is important to study our nation's first revenue raising Act to understand the wisdom of the Framers. The Act was "... in a certain sense a second Declaration of independence; and by a coincidence which could not have been more striking or significant, it was approved by President Washington on the fourth day of July, 1789." [See, Twenty Years of Congress, James G. Blaine, 1884, Vol. 1, page 185]

Madison, in discussing this Act before Congress, clearly pointed out a very important principal of American's original tax reform package:

"...a national revenue must be obtained; but the system must be such a one, that, while it secures the object of revenue it shall not be oppressive to our constituents."

The Act imposed taxes, not on American constituents, but on "goods wares and merchandise" imported into our Country by foreign nations, and not one dime was raised under the Act by any internal taxes. Internal taxes were frowned upon by the Founder's especially when a national revenue could be had by requiring foreign nations to pay for the privilege of doing business on American's soil!

"In the department of finance it is with pleasure I inform you that the receipts of external duties for the last twelve months have exceeded those of any former year, and that the ratio of increase has been also greater than usual. This has enabled us to answer all the regular exigencies of government, to pay from the treasury in one year upward of eight millions of dollars, principal and interest, of the public debt, exclusive of upward of one million paid by the sale of bank stock, and making in the whole a reduction of nearly five millions and a half of principal; and to have now in the treasury four millions and a half of dollars, which are in a course of application to a further discharge of debt and current demands."

"At home, fellow citizens, you best know whether we have done well or ill. The suppression of unnecessary offices, of useless establishments and expenses, enabled us to discontinue our internal taxes. These covering our land with officers, and opening our doors to their intrusions, had already begun that process of domiciliary vexation which, once entered, is scarcely to be restrained from reaching successively every article of produce and property. If among these taxes some minor ones fell which had not been inconvenient, it was because their amount would not have paid the officers who collected them, and because, if they had any merit, the state authorities might adopt them, instead of others less approved."

"The remaining revenue on the consumption of foreign articles, is paid cheerfully by those who can afford to add foreign luxuries to domestic comforts, being collected on our seaboards and frontiers only, and incorporated with the transactions of our mercantile citizens, it may be the pleasure and pride of an American to ask, "what farmer, what mechanic, what laborer, ever sees a tax-gatherer of the United States?"

The national sales tax idea would do ill to our nation as it is an internal system of taxation which ultimately increases the cost of goods manufactured on American soil; burdens the American Citizen in its collection; and, is to be paid BY the farmer, mechanic, laborer, etc. who will continue to see the intrusion of the "tax gatherer of the United States" if such a system is adopted!

It is also important to note how imposts and duties (external taxation) were successfully used to encourage domestic manufacturing and assist in building a strong industrial base. The first revenue raising Act imposed an across-the-board tax on imports which was higher for imports shipped in foreign owned foreign built vessels, and discounted the tax for imports arriving in American owned American built ships:

"a discount of ten percent on all duties imposed by this Act shall be allowed on such goods, wares, and merchandise as shall be imported in vessels built in the United States, and wholly the property of a citizen or citizens thereof."

This skillful use of external taxation gave American ship builders a hometown advantage and predictably resulted in America's merchant marine becoming the most powerful on the face of the planet. In addition, our national treasury was filled by foreigners paying for the privilege of doing business on American soil.

But this was when members of Congress, and those running for Office, put American interests first and would have considered NAFTA, GATT and the WTO as acts of sedition, and would have tarred and feathered those promoting such surrender of America's sovereignty.

A national sales tax plan which omits external taxation as a principal source to fill our national treasury, is in fact a surrender of national sovereignty to the advantage of foreign interests!

It is quite obvious the American People are fed up with the manner in which Congress now raises its revenue, and the system will be changed...one way or another. But if income taxation is abandoned and the Founders original tax plan is returned to, including the use of impost and duties at our water's edge as a principal means to fill our national treasury, a powerful group of international financiers and investors will have their gravy train cut off. Perhaps that is why a flat tax along with a national sales tax has been offered as "tax reform" by the establishment ... each proposal cleverly perpetuates a burdensome system of internal taxation as the principal means to raise revenue, and leaves the international gravy train in tact by not resorting to external taxation to meet the expenses of Congress as was intended by the Founders!

In closing, many of the same people who promoted the NAFTA, GATT and the WTO (the free trade crowd) are now promoting various forms of tax reform ... each proposal cleverly maintaining internal taxation as a principal means to raise a national revenue. Let us continually keep in mind the important distinction between internal and external taxation while working toward the elimination of income taxation and strive to return to the Founding Father's original tax reform package which provided the means allowing America to become the economic envy of the world.

So the forms will only be filled out and report once a year? That is a little better - but the checks will come once a month, right?

Not if you don't request them, that's your choice.

But SS is really not a good example - it makes my point rather than refutes it. I remember when the elderly in this country were a fiercely independent bunch of people - they didn't worry month to month, year to year, election to election if the federal government was going to cut off their checks - because the either didn't get one or they hadn't become dependent on it. Things have changed haven't they? I don't believe we have had an election in the last 40 years that the democrats haven't told the elderly they will be put in the streets if they vote Republican - is that the mindset you want for all Americans? I don't - there must be a better way - I want less dependence on the government - not more.

Then get busy and figure out how you get from here to there without some intermediate such as the NRST to make the real cost of such programs apparent to all receiving them.

Guaranteed, as long as people keep believing that FICA is just another set of insurance/retirement contributions instead of the regressive tax on personal income that it really is, that is unlikely to come about.

Kill the FICA tax and put it clearly within that which is known to be general federal tax payments, as it is in reality under both law and concept, is one of the first steps necessary towards killing that system.

Until SS/Mediscare is gone don't bother to complain to me about people get some of their tax payments back through the FCA mechanism of the NRST. The damage is already done and your pitiful worry over telling government where to send tax overpayments to you holds no water agains much larger issues not being dealt with.

Now I don't know how old you are, but I have given examples of how government 'checks' create dependence. I remember when the all the elderly didn't get checks, and when the ones who did only got a pittance that didn't provide much for them. They were independent - yes they might live with their children - which was a plus, but they didn't live their lives worrying about each and every political wind that blowed. The same for the black people and poor white or any color people. Now they are dependent on the government. The monies they got initially didn't provide them with a living - they already had a living, you see. No one was starving and far fewer people were on the streets from necessity. But it was not long until that check became the center of their lives. Now most elderly just plan for that magical 65 when they can draw their checks and retire.

No we, and most Americans do not have contact with the federal government each day - and so forth - it is handled with out our seeing it or touching it. That makes a profound difference. If you don't believe me - work for yourself and have to write that check to them for the full amount every time - it changes your thinking. I firmly believe if everyone had to write the check for their own taxes, you would see a tax revolt. But no, you don't see it, it is a totally different thing. Well so will getting a check directly from the government make profound difference.

I am not ignorant, so just because I see this as a human problem = not a financial one - don't assume I just don't know what I stupid.

I realize the government knows where I am,and I realize I have to pay taxes and give them that information - but if you will just look at it realistically, you will see that to have everyone receive a check from the government each month will create a dependency - it can't help but. As I said, look at the elderly and the welfare. I will guarantee you that many of the black community and the poor white community are much worse off than they were pre-Great Society. There are people out there who have lived on welfare since that first Great Society generation and everyone since. AGain, is that the mindset you want for future Americans.

And speaking of naivety - do you really think the politicians are going to let this come to a vote, or come to pass if there isn't something in it for them? If they have to give up big contributions for getting rebates for this industry, tax credits for this industry? When you are dealing with something like this, you can't just say - but basic economics tells us that supply/demand, income neutral, blah, blah blah - you have to realize America is not made up of economic robots - it is made up of human beings with all our flaws and shortcomings and you have to look at everything from a human standpoint as well as an economic standpoint.

There has to be a better way and I think a better way would be to lower the tax rate - and include everyone - period.

I am not nieve. I hire contaract labor myself. There is a significant test to determine whether someone is a contract laborer or an employee, many contract laborers fail that test and subject the business to significant penalties.

http://www.payroll-connect.com/Articles/2002/July/ContractFLSA.cfm

If they give a false SS number (TIN) they are subject to back up withholding at the rate of 30%. Yes it may take a while for the IRS to catch up with them but they do. A number of back up withholding requests from IRS may subject the business to a complete audit of their contract laborers. As I said before if they pay under the table they have to pay substantially less because of inability to write it off. There is substantial risk of not carrying workers comp insurance, of course some people swim with sharks....with that increased risk businesses that employee illegals and don't pay the correct taxes insurance etc take the profit in exchange for the risk. It is not free competition. It is illegal competition and they are in fact subject to unfair competition charges...and RICO statutes...

http://www.vdare.com/fulford/ricol.htm

With the NRST illegals will be paying taxes when they consume. As for why some people hire them, some believe it is because they do jobs others will not, while I believe it is because they can pay them less and in return for their risk take more profit compared to legal employers...

Since most everything you use, vehicles, equipment, cleaning, phone, etc is for business purposes, wouldn't you actually benefit by getting these and other products & services exempt from the NRST?

If we had an nst, of course it would since the nst would increase prices by 30+%. No one can prove otherwise, you can be the first if you dare.

BTW, the (phony) 23% rate was established for 1995 government spending. Do you think our government spending has remained the same or increased since then?

From April 2000:

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.

Okay I can't wait for lewislynn to clarify what the word "purchase" means....

That's a good question from someone who can't get past the grade school level of word definitions.

I asked if it was monthly, quarterly, I don't know.

Your replies on the matter was not a question, it was a statement of your assumptions.

nanny: "So in return for a savings on taxes - you are willing to forced each and every American family, each and every month, to 'file with the government' in order to receive monies back."

I don't know doesn't apply, you have been provided links to both the text of the legislation and websites containing that information. One should investigate not state uniformed pronouncement on subject they obviously do not bother to research.

The request/update is annual, the FCA payments are monthly.

But please let's don't misname this a rebate - a rebate it is not.

I have not called it a rebate. I always refer to it for what it is, the Family Consumption Allowence (FCA). A payment compensating taxation under the NRST at the povertylevel of expenditure, received monthly with no qualification other than legal residency and voluntary request.

Others have and do call it a rebate apparently for explanatory purposes using terms more familiar to most people.

I don't use the term myself as it implies things that are not true such as means testing or requiring reporting of income or expenditure to government to qualify for it.

. It is a check based on some magicl equation they have of what they think you might need to live or whatever

Nothing magical about its basis, it just a specific price for a survival basket of goods purchased in a particular year updated with the Consumer Price Index.

The methodology has been fixed by usage over several decades, and it use in courts of law fixing it in the institutional methodology of such statistical measure. Interstingly such a measure becomes even resistant to change by acts of Congress as being part of the established common law of the land as a usage of art in statistics in legal cases where many government programs have specified its use as a defined measure.

- it is not a rebate.

You are right it is not, it is merely pre-compensation for federal tax paid to all legal resident requesting it.

So you don't fill out the forms and you don't get any money 'unless you request them'. So you are still doing the bidding of the government. To say, you don't have to take it if you don't want to is a non answer. There are many things that could be proposed whereby people receive money, and not for the betterment of society, and the people would flock to it. So that isn't an answer at all.

Then get busy and figure out how you get from here to there without some intermediate such as the NRST to make the real cost of such programs apparent to all receiving them.

I don't have a problem with a sales tax, I don't think. I just want it to be fair and not create dependence and familiarity with the government, that is all.

Exactly, and how long before people will come to believe the 'rebate' is a form of security and a necessity to them. HOw long before they plan their entire lives around that rebate. Do we want to create that mindset and in the entire population. I don't.

Once again, you have made my point - SS/medicare have been a disaster for everyone - but especially for the mindset and quality of life for the elderly. We do have some folks left out here that don't feel that need for government support yet - do you want all of them to feel that? It will happen - you know it will. And along those lines, you don't feel you will acquire that mindset - I am sure I won't either - but don't you think we will be in the minority and when all the ones who 'feel the need' from the government starts voting their 'needs' - it isn't long until we have changes. Haven't we seen that. Monthly checks will just create more and more constituents for the liberal politicians.

I am not sure about much of anything - except I don't want to create a lot more government leaners. If a sales tax would work - make it smaller - and make it all inclusive. You see, the only reason the 'rebate' is being put in is because of special interests and it is also the reason the tax rate will be so high. I don't know if sales tax will do it at all - but I do know, if 23 to 30%, with rebate will do it - 10 to 15% without rebate will also do it. Just think about how much money will be saved by eliminating the government paperwork for these rebates.

Now if there are people out there whose very lives will be snuffed out with a 10% sales tax - this country is in bad shape and we need to be doing more than worrying about tax changes.

I really have to go to bed now - we have solved nothing - but at least we 'cussed and discussed'.

Now they are dependent on the government. The monies they got initially didn't provide them with a living - they already had a living, you see. No one was starving and far fewer people were on the streets from necessity. But it was not long until that check became the center of their lives. Now most elderly just plan for that magical 65 when they can draw their checks and retire.

I agree It is a shame that so many are dependent on the government, imagine if the government didn't tax savings through out one's life and only collected taxes when it was spent..and people had more available income to save. Wonderful, they could become more independent from the government.

No we, and most Americans do not have contact with the federal government each day - and so forth - it is handled with out our seeing it or touching it. That makes a profound difference. If you don't believe me - work for yourself and have to write that check to them for the full amount every time - it changes your thinking. I firmly believe if everyone had to write the check for their own taxes, you would see a tax revolt. But no, you don't see it, it is a totally different thing. Well so will getting a check directly from the government make profound difference.

I work for myself and have to struggle with compliance with a myriad of government regulations regularly. Now you get the picture, if everyone had to write a check there would be a revolt. Imagine everytime you bought something getting a receipt with the government's take (tax) on it it would remind you every day not every month or year. That is exactly what the NRST will do, yes every month you will get a check, but every day you buy food, gasoline, clothes or such you will get a bill from the government, and it will show the percent the government takes. Imagine people getting so ticked off that they demand the government reduce the rate by eliminating the allowance so everyone pays less and lowering the rate by eliminating giveaways. That is a major purpose behind the NRST, letting everyone know what the government really costs.

I am not ignorant, so just because I see this as a human problem = not a financial one - don't assume I just don't know what I stupid.

They are intertwined IMO

I agree with you and I believe one step at a time must be taken and the first is to make our tax system more visible and more efficient. NRST will do that.

Our country was founded by people who risked their lives and fortunes for us, and there are some good politicians willing to risk their careers. It is up to us to give them enough support to get them to do the right thing. Look what has happened to the democrats since America woke up on 9/11. Anything is possible.

There has to be a better way and I think a better way would be to lower the tax rate - and include everyone - period.

Yes that would be nice but much less likely to pass. I suggest getting the law in first then trying to do away with the allowance after everyone understands the real rate....a little at a time rather than the all or nothing...

Even Wilkens says prices will drop over time....

Prices. Prices for consumer goods and services quickly rise by the amount of the tax, and then some. The portion of the price increase in excess of the tax is due in part to the higher cost of imports (from the weaker dollar) coupled with the ability of some domestic producers of competing goods to hike their price to that of imports. Consumer prices similarly rise 25 percent -- roughly the nominal rate of sales tax, unadjusted for any exemptions or transition rules -- by 2002 and gradually drop from that peak to a level that remains about 18 percent above the pre-change baseline.
Examined on a year-over-year basis, these price increases generally amount to a large, one-time hike in prices as the NRST is imposed, with some moderation of this increase in the longer run. Due to a weaker dollar, merchandise import prices increase by nearly 4 percent shortly after the NRST is imposed and are 6.5 percent over baseline levels in 2010. Merchandise export prices are also above baseline levels. In 2001 and 2002 they are nearly 3 percent above the baseline. However, due to lower interest rates, which reduce business costs, export prices are only slightly greater than baseline levels for most of the remainder of the forecast period. The overall impact on prices is measured by the change in the GDP deflator, which initially rises 20 percent above the baseline price level before settling back to a 13 percent price rise relative to the baseline.

Where does he say that?

Even Wilkens says prices will drop over time....

Prices. Prices for consumer goods and services quickly rise by the amount of the tax, and then some. The portion of the price increase in excess of the tax is due in part to the higher cost of imports (from the weaker dollar) coupled with the ability of some domestic producers of competing goods to hike their price to that of imports. Consumer prices similarly rise 25 percent -- roughly the nominal rate of sales tax, unadjusted for any exemptions or transition rules -- by 2002 and gradually drop from that peak to a level that remains about 18 percent above the pre-change baseline.
Examined on a year-over-year basis, these price increases generally amount to a large, one-time hike in prices as the NRST is imposed, with some moderation of this increase in the longer run. Due to a weaker dollar, merchandise import prices increase by nearly 4 percent shortly after the NRST is imposed and are 6.5 percent over baseline levels in 2010. Merchandise export prices are also above baseline levels. In 2001 and 2002 they are nearly 3 percent above the baseline. However, due to lower interest rates, which reduce business costs, export prices are only slightly greater than baseline levels for most of the remainder of the forecast period. The overall impact on prices is measured by the change in the GDP deflator, which initially rises 20 percent above the baseline price level before settling back to a 13 percent price rise relative to the baseline.

Where does he say that?

I just want it to be fair and not create dependence and familiarity with the government, that is all.

Fair is always in the eyes of the beholder. What is fair about government taxing one's survival sustainance?

Exactly, and how long before people will come to believe the 'rebate' is a form of security and a necessity to them.

It is a necessity to them, it assures that government does not take from that which is necessary to survival.

Once again, you have made my point - SS/medicare have been a disaster for everyone - but especially for the mindset and quality of life for the elderly.

The tax system as it currently exists with a regressive payroll tax, and would exist under a Retail Sales Tax without adjustment for taxing survival level expenditures only assures failure of certain groups of folks at the lower margins of the economy.

We do have some folks left out here that don't feel that need for government support yet - do you want all of them to feel that?

Who is that? If they don't feel the need for support, they have that which beyond the necessary to their survival. No reason for such folks to ever feel "need for government support" ever. The FCA in such case is merely available to them compensating overpayment of taxes taken from them.

For the survival level folks, that FCA makes the difference beween being litterally being taxed to death and survival.

It will happen - you know it will.

You are a mind reader and clairvoyant now? Gee such capacity and talent.

And along those lines, you don't feel you will acquire that mindset - I am sure I won't either - but don't you think we will be in the minority and when all the ones who 'feel the need' from the government starts voting their 'needs' - it isn't long until we have changes. Haven't we seen that.

Without enactment of the NRST, which I assure you will not occur without the FCA or some provision for tax exception open to manipulation on the same order and worse, were will continue the way it is now regardless.

Monthly checks will just create more and more constituents for the liberal politicians.

I always find that condescending mentality that demands some to want to protect others from themselves to be interesting. They alway exclude themselve from the possibility of such corruptions but cannot find it within themselves to extend the same consideration to that remainder of the masses out there.

Sorry I don't buy, a tax overpayment returned to the constituent is still a returned tax overpayment out of what is rightfully theirs and necessary to their survival. It is so nice that you insist that the government keep it for their sake.

I am not sure about much of anything - except I don't want to create a lot more government leaners.

No, you would rather create just an even more serious dependancy of the lowest levels of the economic rungs of a portion of that which is necessary to their survival instead; merely for the matter of philisophical purity and protecting others from their awful inclinations, not felt by you of course.

You see, the only reason the 'rebate' is being put in is because of special interests and it is also the reason the tax rate will be so high.

Personally I have strong philosphical reasons to not allow government to tax survival at any level. As far as tax rate being so high, until you manage to kill a few major programs under the current tax system or figure out how you are going to get your preferred tax system in place over the political objections of liberals I figure you are going to be stuck with such.

What is your plan to get a tax system in place without some progressive character to it? I would like to know how you intend to manage this magic trick. Until you manage your trick, we will continue with the current system or worst. I'm all ears.

Now if there are people out there whose very lives will be snuffed out with a 10% sales tax - this country is in bad shape and we need to be doing more than worrying about tax changes.

What 10% sale tax is in line to be enacted? None I know of.

Revenue Neutrality lady, you aren't going to get such enacted or even to the floor of Congress without prior repeal of government programs sufficient to allow that rate to even be proposed.

Of course you might try slight of hand and create a compounding tax system that fools the people and still taxes them at a higher effective rate. But that is not what I will support.

TRUTH in TAXATION is what we ain't got already. I'm not interested in schemes that perpetuate that sort of system, that we already have that with the corporate business taxes.

I really have to go to bed now - we have solved nothing - but at least we 'cussed and discussed'.

Sounds good to me, I suggest you sleep on it, and come up with some retail sales tax proposal that has a chance for enactment that is better than the NRST H.R.25 and provides the same revenue neutrality with current law that is necessary for political survival beyond five seconds of House debate and Senate challenge by filibuster.

As for the "59%" rate, let me guess, that was from Mr Wilkens
Nope, the Joint Committee on Taxation.
Show me wrong and I will admit it.

Here at least is the link you should have provided or at least cited as your source.

Refer: 12. DATE CERTAIN TAX CODE REPLACEMENT ACT, House Congressional Record April 13, 2000 pages H2259-H2282; speaking of a memo regarding the Joint Tax Committee's assessment of the total Federal tax rate as a percentage of family consumption expenditures based on Clinton administration expectations for government growth in program funding.

"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."

I'm sure folks will be reassured that hero of your cited statement "Mr. Frost" was none other than the Chairman of the House Democratic Caucus.

You know, like in Republicans want to throw old people in the streets and starve babies DEMOCRAPS, arguing against throwing out the INCOME TAX.

Analyzing the statements of Rep. Frost(D) and other House Democratic Caucus members, the House Democratic Caucus hoped to be able raise total federal taxes across 5 years to 59.5% of family consumption expenditures. That indicates a whopping 37.3% of gross family income, more than 1.5 times the effective total federal tax rate(24.2%) born by the nation's familys in 1999 as estimated by CBO.

59% over five years(11%/annum) is the increase in tax rates that the DEMOCRAPS expected and proposed as their budget under a perpetual Clintonian administration.

It is not the tax rate of the NRST, nor will it ever be. The NRST is "revenue neutral" with respect to current tax law, not "budget neutral" against a democrat wish list.

What Rep. Frost doesn't say is he and his Folks want to increase the income/payroll tax enough to ensure they have that much. The chart he is referring to reflects Democrap hopes for us.

But of course you knew that before you you made your statement it didn't you?

Tell us lewislynn, if every voter is required to pay the same tax rate without exception, just who is going to support any Congress Critter with the temerity to propose a 60% tax rate on every person in the country?

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