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Category: The Fair Tax
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The problem of the day in 2016 (It was in 2010 when I ran for Congress the first time), is clearly Jobs! Jobs! Jobs!  It's been bad since 2008 and getting worse as time goes by. How does the 16th amendment help business?  How does the 16th amendment help Jobs?  How does the Sixteenth Amendment help you and me and the next guy assure that tomorrow will be a better day than today. Obviously it does not, or this essay would never have been written.

The 16th Amendment to the Constitution authorizes the "progressive" income tax. We all know that more than a mechanism to feed the government's need to defend us, and to enable highways to be built and other things that individuals cannot do, the income tax has more recently been used as a mechanism for wealth redistribution and thus a means of an unconstitutional presidency to gain more dictatorial power. This is what killed the goose that laid golden eggs in the US for an awful long time.

The income tax was not new in 1913 when enacted. It had been used to fund the armies of the north in the Civil War.   No country can conduct war without cash.  So, to bring in a lot of revenue as necessary in 1861, Congress introduced the Revenue Act of 1861 with a flat tax of 3% on annual income above $800. 

The tax self destructed in 1866 but was almost brought back a number of times by the Socialist Labor Part in 1887, the Populist Party in 1892, and the Democratic Party in 1904 and again in 1908.  Notice the Republicans were never openly for the personal income tax. Moreover, for Pennsylvanians, it is nice to know that along with Virginia and Florida, Pennsylvania never took up the proposed amendment that ultimately permits government to do things never intended by the Founding Patriots. It's time for this monster to go, along with 435 members of the House and 33% of the Senate.

On the treasury site, it says, "By 1913, 36 States had ratified the 16th Amendment to the Constitution. In October, Congress passed a new income tax law with rates beginning at 1 percent and rising to 7 percent for taxpayers with income in excess of $500,000. Less than 1 percent of the population paid income tax at the time. Form 1040 was introduced as the standard tax reporting form and, though changed in many ways over the years, it remains in use today."

Lawyers like to use the term slippery slope to mean "give them an inch and they will take a mile." The tax slope was so slippery that when John Kennedy cut back income taxes to save the economy in the early 1960's. the highest tax rate had risen to over 90%.  No matter who you are, that is ridiculous.  Whether my gross income ever goes to $100,000.00 or not, I do not deny those people clever enough to beat the business system and become utterly successful. None of us want to pay taxes. Only a fool would so submit. 

Without those who make a lot of money from their inventions, we would not have the radio, the TV, the computer or the iPad, and an awful lot of other wonderful things.  Surely, the buffoons in the government would never have brought us such innovations, and so I question any person thinking we should turn to government for hardly any of our needs other than National Defense. Putting the government in charge of healthcare is like finding the worst player on the team when the championship game is tied in the bottom of the ninth, and substituting the worst player for the best player on the team.  You're going to lose. it's a certitude. That describes Obama's America to a tee. 

The 16th amendment like most things that may once have been perverted over the years, especially by this administration, now apparently openly declares that an individual's wealth is not his. Instead, it should be redistributed merely because government is all powerful. So, they steal from the rich and the disappearing middle class to seemingly give some alms to the poor. This then makes the poor dependent on the state and lovers of Obama. In the newest trick with Obamacare, the government in trying to equalize everything between the workers and non-workers decided to redistribute healthcare. The "person" in charge of anything so important should be competent. Yet, competent Americans are expected to give up control so the government can assume all of their responsibilities except for paying taxes. Have the seeds of another American revolution now been planted? 

In the redistribution schemes, the workers somehow do not like the deal but the non-workers like it fine. It is definitely good to help the poor as individuals. That's why charity is a virtue.  It is not good for government to help make poor people out of those who otherwise would be fruitful contributors to their own lives. That destroys hope. You can have faith in that.
 
The notion of giving to those who should not need anything returns nothing to the people. The government really does decide too much. The income tax is used for social engineering. Government uses it as a tool  to manage people's purchases via tax exemptions, credits, and deductions. Watch how much beer you drink; sugar you eat; and toilet paper you use because one of those video cameras that Uncle Sam is installing everywhere is going to tell on you one day soon. 

People may ask, "How does a bureaucrat from the government know what is good or bad for you or for me?"  We all know they do not because most of them are unfortunately asleep or too inept to make a positive difference.  The last person anybody would call if in need would be a person from the government. 

Some Elements of Government Are Good
 
Since we need taxes to support the good parts of government that we the people control, the best tax is clearly a consumption tax. You have seen waitresses and waiters that treat your family well. I sure have. You and I know that they prefer to get cash, rather than have the tip on the bill.  Why is that?  It's because it is non-report-able income to the government. A consumption tax would get them to pay and you and I would pay only when we spend a dime.  If they spend their tip, they would then pay a tax regardless of whether you gave them cash or it was on your charge card.
 
So, a Fair Tax can save the money the government uses for the IRS to find the tips that these folks might hide. Though the drugs that a dealer sells may not get taxed, the drug dealer's purchases are all subject to the FAIR TAX.  The IRS can be eliminated because nobody will have to find the dollars that are earned under the table. Instead the tax will occur when the hidden loot is spent.

So, a consumption / sales tax would force those operating outside the current income tax system to pay their fair share -- whether they are legal or illegal.  In this way, nobody gets public services for free. Nobody! Why is that not something that we all like?  Anybody with a job and those who receive money from those with a job all pay taxes. This lifts the burden from only those who work.

Opponents of the Fair Tax love the idea of socialism and social engineering. The income tax is their tool that is why they love it so much.  So, they will lie about the FAIR Tax such as telling you that it will hurt Senior Citizens on Social Security. That is another lie that government likes to tell.  Has government ever lied to Seniors. How about no COLA because the CPI  (a.k.a. the inflation rate) is zero. Is that a joke? Seniors know that is a big and unforgiving lie perpetrated by Obama and this Congress and they are angry as hell about it.   What Bureaucrats say about the Fair Tax is another pack of lies.

We're hearing more and more about big cuts in Social Security and Medicare.  Hopefully, the cuts will not affect those over 62 or anybody who is collecting already. But, if you are 54 or below, expect that the government will be telling you that you are no longer in the real Social Security fund.  Your net contributions will be set to set to zero and you will be starting over. Watch and see.  Raises in Social Security may also be a thing of the past regardless of the inflation rate.  The fact is the government is broke. 

A consumption tax like the Fair Tax is visible and thus government will be accountable.  Don't compare it to the Value Added Tax which the liars in the government may be implementing in addition to the punitive personal income tax.  When you hear the bureaucrats tell you the Fair Tax is bad for you, please remember that it is one of the ways to save Social Security And Medicare as everybody will be contributing.  So you don't get snookered by the myths, here are a few facts from fairtax.org to chew on so you can win the argument:

 

There is another  notion that a sales tax can be a very practical measure by which we will gradually wean ourselves off of our dependence on federal and state services. By slowly lowering the percentage of the tax over time, the size of the government overall can shrink and government services can eventually be returned back to state control where they belong or perhaps, other than those deemed extremely essential, they can be ended entirely and people can keep their own money. How can that be bad.  

So that you understand the salient components of the Fair Tax Plan, I have captured from the http://www.fairtax.org/ site,  some of its essence below.  

What is the Fair Tax Plan? 

The Fair Tax Plan is a comprehensive proposal that replaces all federal income and payroll based taxes with an integrated approach including a progressive national retail sales tax, a prebate to ensure no American pays federal taxes on spending up to the poverty level, dollar-for-dollar federal revenue neutrality, and, through companion legislation, the repeal of the 16th Amendment.

That last notion, ladies and gentlemen means that Congress sets in motion the repeal of the 16th Amendment and with it goes the IRS. 

There actually has been an act proposed called the  Fair Tax Act (HR 25, S 296). It is nonpartisan legislation. It abolishes all federal personal and corporate income taxes, gift, estate, capital gains, alternative minimum, Social Security, Medicare, and self-employment taxes and replaces them with one simple, visible, federal retail sales tax  administered primarily by existing state sales tax authorities.

Because the best approach would be a small corporate income tax in the 10% range and an offshoring penalty of another 10%, I am almost in full agreement with the FAIR TAX as proposed and would be happy to vote for it as is.  The 10% tax would still make the US the lowest taxed nation in the world at the corporate level and this would create major investment in the US.  If the FAIR Tax as proposed is enacted, I would introduce legislation to permit a 10% tax penalty for American corporations that offshore jobs.
 
The Fair Tax taxes us only on what we choose to spend on new goods or services, not on what we earn. The Fair Tax is a fair, efficient, transparent, and intelligent solution to the frustration and inequity of our current tax system.
 
According to the bill, the Fair Tax:
 

To save you the effort of going out to the Fair tax  site,  http://www.fairtax.org/PDF/PlainEnglishSummary_TheFairTaxAct2007.pdf, I have copied the summary into this essay.  If there is one thing one can say about the Fair Tax that cannot be said about the Income Tax, it is that it is Fair.


 The Fair Tax Act of 2007 – HR 25/S 1025
plain English summary
 

"The Act is called the “Fair Tax Act of 2007.” As of Dec. 31, 2008, it repeals all income taxes and payroll taxes, specifically:

"Effective January 1, 2009 [or whenever it goes into effect  it replaces the above taxes with a national retail sales tax on all goods and services sold at retail. The tax rate is set to be revenue neutral – at the level necessary to replace the revenues generated by the repealed taxes. 

"A 23-percent (of the tax-inclusive sales price) sales tax is imposed on all retail sales for personal consumption of new goods and services. Exports and the purchase of inputs by businesses (i.e., intermediate sales) are not taxed, nor are used goods or any savings, investment, or education tuition expenses. The sales tax must be separately stated and charged on the sales receipt. This makes it clear to the consumer exactly how much they are paying in federal taxes. 

"There are no exemptions under the FairTax, meaning that no lobbyist, corporation, or individual can obtain tax advantages that are not available to the general public. Also, everyone pays the same rate, but those who spend more pay more total taxes than those who spend less. 

"The FairTax provides every American family with a rebate of the sales tax on spending up to the federal poverty level (plus an extra amount to prevent any marriage penalty). The rebate is paid monthly in advance. It allows a family of four to spend $27,380 tax free each year. The rebate for a married couple with two children is $525 per month ($6,297 annually). Therefore, no family pays federal sales tax on essential goods and services and middle-class families are effectively exempted on a large part of their annual spending.
 
"Funding for Social Security and Medicare benefits remains the same. The Social Security and Medicare trust funds receive the same amount of money as they do under current law. The source of the trust fund revenue is a dedicated portion of sales tax revenue instead of payroll tax revenue.
 

"States can elect to collect the federal sales tax on behalf of the federal government in exchange for a fee of one-quarter of one percent of gross collections. Retail businesses collecting the tax also get the same administrative fee. 

"Strong taxpayer rights provisions are incorporated into the Act. The burden of persuasion in disputes is on the government. A strong, independent problem resolution office is created. Taxpayers are entitled to professional fees in disputes unless the government establishes that its position was substantially justified." 

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As the song ends, "Who could ask for anything more?"