Jews For The Preservation of Firearms Ownership, Inc.
P.O. Box 270143
Hartford, WI 53027
Phone (800) 869-1884
Fax (425) 451-3959
September 28, 2004
Updated October 16, 2006
RESPONSES TO FAIR TAX ARTICLE
On September 28, 2004, we sent out an alert regarding the latest article from Claire Wolfe and Aaron Zelman, "THE FAIR TAX: A TROJAN HORSE FOR AMERICA?". We've received a variety of letters in response, and are printing a few of them below. Please note, though, that JPFO is listing responses, NOT advocating ANY legislation or program.
- The Liberty Crew
Not Quite the Fact, My Friends
After reading the JPFO position on the FairTax and being a supporter and fully trained on the benefits of the FairTax, I am dissapointed in the unrealistic views stated by JPFO. The article I created this blog in response to can be found here:http://www.jpfo.org/fairtax.htm
Here are the JPFO points and my opinion on their claims. [Please click on the link to read the entire response. Due to the length we are unable to re-publish it in whole. - The Liberty Crew]
Another point against the Fairtax.
Lastly, this tax reinstates the estate tax. Congress has been reducing this double tax since 1976. It is finally about gone. If someone dies today, what they leave their spouse is not taxed by the Federal Government. The first 3 million dollars is federal tax free to their other heirs. "UNFAIR TAX" would not care how the widows and their children spend their dollars, they would have to pay this 30% tax. I assure you this would wreck many clients' plans for their families when they die. It would seriously dilute the value of their life insurance policies.
Another reader responds to this statement:
Clearly one must read the FT to know how wrong this can be. Yes, when the widow spends she is taxed. Unless she buys a pre-owned home for 2 million, and no tax! Then she can sell it for 3 million 10 years later, no tax! and then she can buy a used Bentley for 150,000, no tax again. Point is with wise planning all this money can go a long way without any estate planning at great cost. It can all go to the widow's heirs, tax free, and they can buy used tax free. Or buy new and sell for a profit tax free.The best gift we all can leave our heirs is a healthy economy, social security and Medicare plan. They are all headed south now. They will all flourish under the fair tax. The economy is predicted to grow 10 pct in the first year of the FT by many of the greatest economic minds in our country under the FT.Not a bad legacy for all of us to leave! Better than trillions in debt! - RG
I found your article about the FairTax quite compelling. It certainly vanquished my fantasy that if only MY plan was put in place, citizens and Federal bureaucrats alike would see it as a holy thing and abide by it perfectly. They most certainly would not!
The founders studied human nature, then reached one conclusion: The Federal Government must be strictly limited, or Its intrusion into our business or personal lives would eventually become abusive. How right they were.
Now our government is huge and out of control, and with the advances of computer technology which can be so easily used against any one of us, I hold very little hope for meaningful change.
Technology has changed things so much, the world of Thomas Jefferson might as well have been on another planet.
The United States of America, "a more perfect union," was an experiment in individual liberty, and it was interesting. Liberty lasted about 120 years, but circa 1913, with the establishment of the Federal Reserve and then a tax on income, the citizens became subjects.
Today the Fed's use only the language of masters over slaves. We're under an oligarchy. It regularly tells us how great it is that we're in a democracy and that we have a voice-our "precious" vote.
But my vote has never gotten me anything close to what I want. I want the liberty to not have to get the approval of millions of other people before making and executing my own plans for my own life.
Thanks again for your very well written analysis of the [not] FairTax.
I just read your article about a proposed national sales tax, and I find it informative and frightening; and I share your conclusion that only the elimination of the income tax will restore our freedom. The politicians, however, will not willingly give up their power to control us. There are some brave people (Larking Rose, among others) who have started to rattle the foundation of a corrupt political system.
AMERICAN CONSTITUTIONAL RESEARCH SERVICE
Why does Neal Boortz support the socialist friendly FairTax?
In an article titled ANSWERING A FAIR TAX QUESTION in which Neal Boortz supports the so called Fair Tax proposal, he wrote:“It doesn't matter that paying taxes will be voluntary under the Fair Tax plan. It doesn't matter that nobody pays the retail sales tax on the basic necessities of life.”
But the truth is basic necessities are taxed under the so called Fair Tax (FT) and all consumers pay the tax when purchasing basic necessities.
The architects of the plan have created what they call a “Family Consumption Allowance“ (FCA) which is a monthly check proposed to be sent by Congress to each American Household, intended to be earmarked by each household to offset taxes paid on the basic necessities of life, which in fact are to be taxed under the FT.
In essence, the so called FT proposal rations tax-free basic necessities, and rations them by the size of the FCA which is determined and set by folks in government.
Now, why should Neal Boortz be speaking out against the FCA rather then lend his support? Well, it promises to give Senator Ted Socialist Kennedy a very valuable gift: the family consumption carrot, which Kennedy and his socialists followers in Congress will promise to increase during election time to buy millions of votes to remain in power, just as these domestic enemies now do with the federal minimum wage, federal social security payments, federal aid to unwed mothers, and even federal corporate welfare___ the only difference is, the FCA, if enacted, would extend the socialist tentacles of government to every household in America with its monthly government check, completing the socialists takeover of America under a reform which promises to abolish the IRS and income taxation, but in substance and truth will only tighten the iron fist of government around the people’s productivity, while demanding the people to shamefully kneel [register with government] to feed from that same iron fist.
In support of the FT Neal writes in an article titled End of the income tax?
- "The law establishing the federal income tax would be repealed, both for individuals and for businesses.
- A constitutional amendment repealing the 16th Amendment would be sent to the states for ratification."
The old saying goes, if it sounds too good to be true it probably is.
What Neal doesn’t tell you is that even if existing statutory law establishing the federal income tax is repealed, and a constitutional amendment is adopted by the states repealing the 16th Amendment, Congress still maintains constitutional authority to impose taxes calculated from income upon corporations, death taxes, and a wide variety of other taxes calculated from income. For example see: FLINT v. STONE TRACY CO., 220 U.S. 107 (1911) upholding such a tax prior to the adoption of the 16th Amendment. Also, see SPRINGER v. U S, 102 U.S. 586 (1880) another case upholding a tax calculated from income prior to the adoption of the 16th Amendment.
Now, what about closing down the IRS? Is this a reason to support the FT proposed legislation?
Although the IRS may be abolished, the Fair Tax legislation creates a new internal revenue collection agency and would actually increase the number of tax gathers beyond businesses which are to collect the tax, expanding the federal governments reach over tax gatherers to include individual tradesmen and service people, entrepreneurs, and, even ordinary working people engaged in self employment, forcing them to "register" with folks in government in order to pursue a livelihood [see SEC. 502. REGISTRATION]. In short, the FT proposal would require these poor souls to become a modern-day regiment of enlisted tax gathers for government, increasing the number of tax gathers throughout the United States to an all time high, and compel them to maintain burdensome and inquisitorial records and reports under a penalty of perjury to satisfy the wants and fancies of tyrants in government___ all the above to be implemented under the pretext of the "Fair Tax" proposed reform which promises to abolish the IRS and income taxation, but in substance and truth both are empty promises!
As to Neal’s assertion that the FT is voluntary, the truth is, the tax is not voluntary in that it taxes the necessities of life! If it did not tax the necessities of life, as our Founding Fathers intended when allowing taxes on specifically chosen articles of consumption, then, and only then could one truthfully assert the tax is voluntary. But the so called Fair Tax does burden the necessities of life at the point of every purchase.
So, what is the solution? The solution is found by compelling Congress to return to our Founding Father’s original tax plan which was never intended to allow Congress to create the oppressive and despotic system of taxation America’s labor, businesses and industry now suffers under. In addition to the fairness of our Founding Father's original tax plan, not only did it pave the way for America to become the economic marvel of the world, but it provided a number of built in checks and balances encouraging Congress to practice sound fiscal policies, and made each state’s Congressional delegation immediately accountable to its state’s legislature and governor if Congress created a deficit during the course of a fiscal period.
Can we compel Congress to return to our Founding Father’s original tax plan? Yes!
A return to our Founding Father’s original tax plan is far less complicated than the FT proposal. In addition, a return to our Founding Fathers plan does not make the promises of the FT, but rather, compels Congress to carry out those promises! How is this to be done? By following the advice of Thomas Jefferson:"In matters of Power, let no more be heard of confidence in men, but bind him down from mischief by the chains of the Constitution."
A simple amendment to the Constitution repealing the 16th Amendment with specific wording that Congress is “…*henceforth prohibited to lay any tax or burden which is calculated from profits, gains, interest, salaries, wages, etc., i.e, any lawfully realized money…”* will, unlike the so called Fair Tax, bring us back to a fair system of taxation and remove the burdens complained of by those promoting tax reform.
Those interested in a summary of the Founding Father’s original tax plan and how it was intended to work, can find this information in an article titled EXPOSING THE FAIR TAX HOAX ___ scroll down and start reading at:*American Constitutional Research Service Before the Committee on Ways and Means United States House of Representatives June 1995
JWK“…..with all these blessings, what more is necessary to make us a happy and a prosperous people? Still one thing more, fellow-citizens—a wise and frugal Government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement *and shall not take from the mouth of labor the bread it has earned.* This is the sum of good government, and this is necessary to close the circle of our felicities“.~ Thomas Jefferson, First Inaugural Address
[Permission is hereby given to reprint this post if credit to its author and the ACRS appears in such reprint. No copyright is claimed for quotes within the article which are public domain materials.]
You may have missed a huge sleight-of-hand cash windfall for business that's hidden within the FairTax.
It's the 'employer's share' of payroll taxes.
The Americans for Fair Taxation are in agreement with nearly all economists that it is the wage-earner, and not the employer, that pays the so-called 'employer's share' 7.65% of payroll tax.
The AFT classify this tax as one on the wage-earner to develop their justification for benefits of the FairTax and specifically and frequently state this many places in their literature. For example, see:
Thumbnail Sketch of the FairTax, 4th paragraph, 4th sentence
FairTax Brochure, page 8, 1st paragraph, 3rd sentence
ITRP Rebuttal, page 6, 1st, 2nd, 6th, and 7th paragraph; page7, 5th paragraph
Tax Notes Rebuttal, page 5, paragraph , 2nd and 3rd sentence; page7, paragraph , 4th sentence; page 8, paragraph , 2nd sentence; page 11, paragraph , 4th sentence; and page 12, paragraph , 3rd sentence.
But in a major flip-flop, unlike all other taxes repealed by the FairTax, the 'employer's share' - paid by the employee - will not directly and immediately benefit the one that pays it, but to the employer.
This is an inconsistency, a duplicity, of IRS proportions on the part of AFT and the FairTax.
It will be many many hundreds of billions of dollars for employers' pockets that used to go to the IRS.
I read your article about the FairTax and wholeheartedly agree with most of your arguments. However, there is one important aspect of the FairTax that you left out of your article:
If the federal budget is $2.399 trillion (that is the best number I could find) and the resultant tax rate is 30% (.30) then the dollar amount of goods and/or services sold would have to be $7.999 trillion. Since the consumer would have to pay for BOTH the good and/or the service AND the tax itself, the total cash outlay would be $10.399 trillion.
If you divide $10.999 trillion by the (rounded up) number of Americans 300,000,000 you get $34,663.78 per person. Or put differently each and every single person in the United States would have to spend $34,663.78 each and every year for the Fair Tax to work.
While I don't agree with some of your arguments, I do concur with your
conclusion. I have read HR25 (the fair tax act) and have written a few of
my objections below.
My problem is that while I may not support this bill, what I say to correct
flaws in this bill or to eliminate the current system carries little weight.
I have read the fairtax proposal (HR 25) and have concluded that it will not
be the answer to our income tax problems. In fact I believe it will open
the door to even more problems in the very near future.
1) HR 25 only repeals a portion of the income tax code. It does not repeal
the 16th Amendment. That alone leaves the option of reinstating the income
tax at some future date. Indeed, it actually calls for the income tax to be
placed on certain incomes within the United States. This means that some
people will pay both the national sales tax and an income tax. The positive
side of that is that it may reduce the number of illegal aliens that have
incomes within the United States.
The fact remains, however, that as long as the 16th Amendment remains part
of our Constitution we WILL be subject to an income tax in the future.
2) Section 101 (b)(1) of HR 25 calls for a 23 percent sales tax on the the
"gross payments" for a purchased item and is restated later in section 510
(a)(4) as the "(4) the tax rate (the amount of tax paid (per paragraph (2))
divided by the property or service price inclusive of tax".
The method of calculating sales tax on todays products is calculated by
adding a percentage to the sales price of whatever the taxable item may be.
As an example: A 7% sales tax on a one dollar item produces a total price of
$1.07. The method described in HR25 actually works out to be a 30% sales
tax on taxable items when todays methods are applied. Thus, an item that
sells for $1.30 has a sales tax rate of 23% using the method introduced in
HR 25. However, using todays method of calculating the sales tax requires
the 30% rate to achieve the same final selling price ie; $.30 divided by
$1.00 for the actual rate of 30%. This is to be spelled out on the receipt
that is to be provided for each taxable sale "(per paragraph (2))" as shown
In addition this bill makes it abundantly clear that this sales tax rate
will change in the future. And as you are aware that rate will not go down.
3) Regarding the rebate that each family will receive: Individuals or
families may opt out of this rebate as indicated in the text of HR 25. But,
why should they have too?
I believe that this bill penalizes individuals and families that do not
"register" with the Social Security Administration. Therefore, any person
that does not have a social security number, hence, a national ID number,
will not receive the proposed rebate. This discriminates against those that
do not wish to be tracked by the government.
4) Under section 509 of HR 25 any "person" must keep records for at least 6
or possibly 7 years. Now I realize that according to this bill the person
described is actually the retailer of the taxable product, however, I can
easily envision a future decision by the state and federal courts, and even
congress, changing the definition and therefore requiring everyone to
maintain purchasing receipts for long periods.
There are few limitations established in HR 25. An income tax will probably
be re-imposed in the future. There are no limits on the amount of sales tax
that may be charged and, even if there were, congress can and will have the
option to change those limits at will. Exceptions and exemptions will be
added providing tax breaks for those same special interests that lobby
congress today. Finally, the tax code is not being eliminated.
I have other concerns as well, but, I have expressed more than enough to
support my claim that the Fair tax act is anything but.
Name Withheld by Request
As someone who has been in the financial industry for over 25 years I thank you for your incisive and thoughtful article. I believe you have done a good job of delineating the potential pitfalls and abuses of such an arrangement.
Name Withheld by Request
must say that I was disappointed to read your organizations position on the "FAIRTAX"....I would have thought your organization to be more responsible and sensative to reasearching issues thoroughly before passing judgement.
your interpretations are way off base and undermined a truly heroic effort of many hard working American grassroots activists that are really doing this campaign for tax reform right. there is no such thing as a perfect solution in my beleif, but this Fairtax/HR25 sure comes awful close. I have spent a considerable amount of personal time researching such w/ a reasonable background to recognize it's problms and merits. It is clearly the best alternative available to Americans today. The organizaion that actsas the driving force behind this movement with honorable and patriotic intentions aimed at preserving our great American society and values...principles America was founded on........hmmmm, reminds of your organization....join us as many of us back your cause for the same reasons
Victor Simon, RFC, CSA
The Coming Fair Tax
by Mark Yannone
The federal income tax WILL be replaced--not because the chosen replacement is an improvement but because the administration of the income tax is fraudulent, and Americans are discovering that by the millions.
When a law-abiding taxpayer asks the IRS to fulfill its stated mission and asks for answers to six simple questions about the Internal Revenue Code and the underlying regulations, and the response from the IRS is a threat followed by an illegal armed home invasion and illegal confiscation of private property, then it is suddenly very clear that the IRS is no better than the Mafia--worse, actually. Such a revelation by a nation that had been force-fed a lifetime diet of "fair share" propaganda is a force too big for any government to confront head-on.
So the immediate solution is to provide an alternative tax system--one that doesn't disadvantage the federal government. The so-called "Fair Tax" fits the bill, and it's coming soon.
Those who fret about the retail sales tax rate are wasting their time. The tax rate will be enormously variable across industries, products, individuals, retailers, geography, etc. The sales tax will be used to curry favor and grow power and influence just as the income tax does now. It will be uncontrollable by those who will be forced to pay it. Like the income tax, it will be tweaked to provide the maximum return to the government with the least political effort.
Contrary to popular belief, this tax is even worse than the income tax. Aside from the uncontrollable rate and its inescapable nature, the Fair Tax will make unwilling tax collectors of millions of service providers.
In addition, the plan includes a monthly "prebate" check that will be sent to each taxpayer via direct deposit whenever possible. We will then have a captive nation--everyone dependent on the government for a monthly check--a nation under complete control of its federal government. One word of dissent and the monthly check can mysteriously stop, and the direct deposit account can be locked "by mistake."
Those who try to buck the system will be criminals, and the temptation to do so will be enormous. Black market sales will yield tremendous profits, but many will be caught and our prisons will overflow with otherwise productive citizens.
Worst of all, when a person's income stops or becomes inadequate, after the last asset has been liquidated and spent, the sales tax will still be due and payable.
The answer is to replace the income tax with voluntary contributions. Let there be no force, no threat of force, and no theft by our federal government. America's citizens and visitors must be free to contribute as much as they like to the federal government to pay for the activities that are authorized by the US Constitution. My answer to those who doubt that voluntary contributions can support our federal government is this: The entire non-government sector of our economy, the private sector, has been sustained by voluntary contributions since before government was formed on this continent.
2004 Libertarian candidate
US House of Representatives for Arizona's District 3
"Most Americans are not liable for a federal income tax."
Mr. Zelman & Mr. Wolfe
Sirs - your analysis is a persuasive home-run. Like many prophets, it is small wonder the JPFO is hated and feared amongst the ignorant, unwashed minions who promote 'sensible gun control' rules.
The consumption-tax is conceptually appealing until one takes a look at how the details would HAVE to work. Admittedly, this was an idea that I favored up until a few minutes ago. However, knowing what I do of government and applying your analysis provides a chilling face to look at. Particularly powerful, was the idea that we would be longing for the 'good old days' under the old tax system.
You masterfully steered into why the whole thing is a straw-dog . . .why replace the IRS with anything at all? Abolish the 'temporary' income tax, fire those government [jerks], and some sense may come to an out-of-control government drunk with money.
Most of us are too young to long for the days when the small US government was able to manage quite nicely promulgating minimal regulations and funded mostly by skimming our bountiful commerce. It is an idea whose time has come!
Thank you for re-framing this in a thoughtful [manner]. This issue is a regular wolf-in-sheep's clothing. May God bless you and allow you to continue your important work.
In a perfect world, the income tax would be abolished without a national sales tax ... but that isn't going to happen! So get over it and plot the next best approach.
We, here in Tennessee, have been thru similar arguments about adding a state income tax. If you buy into the arguments put forth by Claire Wolfe and Aaron Zelman, then you would want to replace the Tennessee sales tax with a Tennessee income tax.
With income tax withholding, there isn't the pain of actually paying the tax. However, if you go to buy a candy bar that nominally costs $1.00 but have to pay $1.33 (federal and state sales tax), then you go, "Ouch!". I've always said there would be a tax revolt if there wasn't withholding and everyone had to pay the full amount in one check on April 15th. The makes the pain obvious and doesn't hide it like the income tax does.
I disagree with the part about replacing social security with the sales tax. But hey, if it gets rid of the income tax, then we can go from there.
Pick your poison, if you don't mind the gov't stealing your money straight from your paycheck or you're an income tax evader or a drug dealer who don't pay income taxes anyway, then continue to support the present system. And you should probably support adding the income tax to the Tennessee mix of taxes.
An income tax penalizes hard work, production, and savings.
With a sales tax, you don't pay taxes on your labor, you don't pay it on the interest in bank account or on stock dividends. Under the FairTax the consumer makes his/her spending decisions in full knowledge of the tax consequences. There are no records on the individual, no audits, no returns to file. Your bank is no longer a spy for the IRS. The ordinary citizen becomes invisible to the gov't tax collectors.
If you read the rebuttals, Tom Wright makes a very clear statement:
"The FairTax legislation repeals the income tax code in its entirety. But to ensure the head is off the viper, the FairTax is integrated with Texas Rep. Sam Johnson's House Joint Resolution 61 for the repeal of the 16th Amendment. This returns the law of our land to one paralleling the original intentions of our Founding Fathers, who knew that income taxes were the tools of tyranny." Only when people feel the pain of the sales tax will they start demanding spending reforms.
Recently people have been talking about a National Sales Tax. I have reviewed this proposal and find it a ridiculous venture!
Please review a fantastic new tax reform proposal called the Automated Payment/Transaction ("APT") Tax (www.apttax.com). This well researched concept from an internationally known Professor Emeritus in Economics at the University of Wisconsin will provide ALL the benefits of the National Sales Tax with none of the negatives.
With the APT Tax, revenues are paid automatically to the government whenever financial transactions occur. The automated payments make it possible to END the Internal Revenue Service, tax enforcement, and all other taxes----saving over $500 BILLION per year!
And the APT tax rate is incredibly low: 0.3%! This means we'd pay only $.03 per $10 spent, or $3 per $1000 spent. This low rate will grow our economy, create more jobs, and enable citizens to save money.
PLEASE take the opportunity to explore the website (www.apttax.com) and discuss it further with Dr. William Hermann. The website contains a complete dissertation regarding the general structure of the tax. A grass roots effort exists for approaching other members of Congress and the media.
Finally, please share this information with others including government leaders and let me know what you think, at your earliest convenience.
Gale DeVoar Sr
6214 Carew St
Houston, Tx 77074-7412
The Constitution, in Article I, Section 8, gives Congress the power "to lay and collect Taxes, Duties, Imposts, and Excises, to pay the Debts and provide for the common Defense and general Welfare of the United States."
In Article I, Section 9, the original document made clear that "no Capitation, or other direct Tax shall be laid, unless in Proportion to the Census of Enumeration herein before directed to be taken." It is moreover established that "No Tax or Duty shall be laid on Articles exported from any State."
Since 1913, our Constitutional rights to life, liberty, and property have been abridged and diminished by the imposition on each of us of Federal income, payroll, and estate taxes. This is an unconstitutional Federal assumption of direct taxing authority.
The Internal Revenue Service is the enforcement arm of the Federal government's present unjust tax system. Citizens, both in groups and as individuals, have repeatedly sought responses from the IRS bureaucracy as to the basis for the agency's tax policies and procedures. No answers have been forthcoming although a responsible government must be answerable to the people and has a duty to those it is supposed to serve.
We propose legislation to abolish the Internal Revenue Service, and will veto any authorization, appropriation, or continuing resolution which contains any funding whatsoever for that illicit and unconstitutional agency. We are opposed to the flat-rate tax, national sales tax, and value added tax proposals that are being promoted as an improvement to the current tax system. The Sixteenth Amendment does not provide authority for an un-apportioned direct tax.
Moreover, it is our intention to replace, with a tariff based revenue system supplemented by excise taxes, the current tax system of the U.S. government (including income taxes, payroll taxes, and estate taxes.)
To the degree that tariffs on foreign products, and excises, are insufficient to cover the legitimate Constitutional costs of the federal government, we will offer an apportioned "state-rate tax" in which the responsibility for covering the cost of unmet obligations will be divided among the several states in accordance with their proportion of the total population of the United States, excluding the District of Columbia. Thus, if a state contains 10 percent of the nation's citizens, it will be responsible for assuming payment of 10 percent of the annual deficit.
The effect of this "state-rate tax" will be to encourage politicians to argue for less, rather than more, federal spending, and less state spending as well.
To the extent permitted by the Constitution, we believe that the taxation of corporations is an appropriate source of government revenue. The Supreme Court has defined "income" as a "gain or increase arising from corporate activity or privilege." People are not corporations, and corporations need not be treated as "people" for the purposes of taxation.
There is substantial evidence that the 16th Amendment was never legally ratified. When elected, we will act to cease collection of direct Federal personal income taxes. We also support ratification of the Liberty Amendment which would repeal the Sixteenth Amendment, and provide that "Congress shall not levy taxes on personal incomes, estates, and/or gifts."
We support the use of motor fuel excise taxes, at rates not in excess of those currently imposed, to be used exclusively for the erection, maintenance, and administration of Federal highways. These taxes should never be used for "demonstration projects", mass transit, or for other non-highway purposes.
We support the use of excise taxes to curb the use of tax dollars for media advertising, and to provide so-called "tax abatements," "tax incentives," and "economic development grants," which are pretexts to raid the public treasury and rob the workingman for the benefit of wealthy interests favored by the politicians.
(Constitution Party Platform)
(Sent in by HB)
*Research Provided by:*
*AMERICAN CONSTITUTIONAL RESEARCH SERVICE (Seminole, FL)*
ISSUE BRIEF #12: THE NATIONAL SALES TAX HOAX
Author: John William Kurowski
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!
Jefferson, in his Second Annual Message(December 15, 1802) states:"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."
Imagine...all this in consequence of "external duties!"
In Jefferson's Second Inaugural Address (March 4, 1805), he points out:"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 succes-sively 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 trans-actions 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 dis-counted 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 taxa-tion gave American ship builders a home-town 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 priv-ilege 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 preform package which provided the means allowing America to become the economic envy of the world
(sent in by WB)
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