/ August 12, 2004 12:57 AM
There has been a lot of banter going around recently about the elimination of the IRS in favor of a national Valued-Added Tax (VAT) or a National Sales Tax (NST). Dennis Hastert, the current house speaker and an Illinois Republican, claims in his new autobiography "Speaker
" that it could bring about a doubling of the economy in 15 years.
"You could double the economy over the next 15 years," Hastert writes. "All of a sudden, the problem of what future generations owe in Social Security and Medicare won't seem so daunting anymore."
Even President Bush said on Tuesday that replacing the federal income tax with a national sales tax is worth considering.
"It's an interesting idea," Bush said at a Florida campaign forum. "You know, I'm not exactly sure how big the national sales tax is going to have to be, but it's the kind of interesting idea that we ought to explore seriously."
goes into more depth about the implications of instituting a VAT or NST and dissolving the IRS as a whole. Here are some highlights in the article that provoke some thought.
That would be a good thing, economists say, because production produces wealth, whereas consumption consumes it, and taxes discourage whatever they're levied on. (The rule is, if you want less of something, tax it.)
So economists say good.
Some veteran tax lawyers doubt voters will go along.
"You spend your whole life being taxed on your income, and when you're supposed to retire and live off your savings, then they tax your consumption," said Frank Polk, senior vice president for tax policy of CBIZ Kessler & Associates, a consulting firm based in Washington, D.C.
This basically says old people won't go for it.
Then we have the issue of exporting jobs and the way the current tax system penalizes US companies.
Because the U.S. taxes production and most foreign countries tax consumption, conditions favor imports rather than exports. In effect, U.S. exporters are taxed twice: Foreign countries tax them on the goods they sell there, and the U.S. taxes them on the money they make from selling there.
For imports to the U.S., everything is reversed: Foreign firms pay neither their local consumption taxes nor U.S. income taxes.
The U.S. has eased the burden on U.S. firms by granting some relief on export income. But that relief was ruled unfair by the World Trade Organization two years ago.
Why would the world not want to screw the US as much as they can? I mean we're just asking for it. The reality is that many coutries would totally fall apart without US business and trade, so what they are really saying is "give us all your money, face unfair trade laws and don't even think of trying to have us play on a level playing field."
Now I'm far from against trade and I do realize that it is in our best interests to give some "freebies" to some developing countries because they are not only friends of ours, but it is in our interest to have them with a healthy economy and stable governments that are friendly to us. However, when it comes to some countries that are abusing the trade structure and really shafting us (i.e. Mexico, China) we need to stand up and say enough is enough.
The article does mention other benefits of abolishing the income tax.
The issue has added to the interest in fundamental reform, because a shift by the U.S. to taxes on sales would solve the trade problem without taking on the world.
Taxing consumption would also boost saving and investing. If you saved everything you made, Uncle Sam wouldn't get a penny.
As it is now, saving and investing are taxed twice: You pay taxes on your money before you save or invest it, and you pay again when the money saved or invested earns interest.
A shift in tax systems would force the country to look carefully at the price tag on government. Congress would have to decide on new rates based on how much money it needs.
"Taxes are in essence the price of government," Economist Gary Robbins of Fiscal Associates says. "When you're running a deficit, you're miss-pricing government. You're telling people that it's cheaper than it is, and that can be construed to encourage more spending."
The main opponents of a VAT or NST would be liberals who bring up the valid point that it is in essence a regressive tax compared to the current structure which puts the heavier burden on high income earners.
In other words, poor people end up paying the same amount in tax as rich people. If the tax was set at 30%, then a loaf of bread for $3.50 would have $1.05 in tax added to the purchase. This 30% tax is actually less than what rich people currently pay in the top federal income bracket and a huge blow to poor people who in reality pay nothing in federal income taxes.
I agree there needs to be reform in some manner. To me a flat tax sounds good, so does a VAT or NST, but the minutia and social impact of implementing these systems is complex. How can we keep things fair and at the same time cover the real tax income needed for services?
It's up for debate. The reality of us actually seeing any action on this is remote IMHO, I'd like to be proven wrong however.
I've found a lot of other well rounded opinions on this and created a rioundup of them below (pop in new browser):
Outside the Beltway
Apropos of Something
Knight of the Mind
In the Bullpen
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Posted by Digger on August 12, 2004 12:57 AM (Permalink)
Well it's about time the GOP talked about something interesting! Good article.
Posted by: Tommy on August 12, 2004 04:02 PM
There are several reasons we need to abolish the IRS:
1. The Constitution provides Congress with the power to lay and collect taxes, that means constitutionally speaking, Congress has to figure out a way to collect taxes not deligate it to some group ran under an executive department. This form of deligation gives Congress the power to make tax laws and hide behind the IRS when the people come screaming at them.
2. The IRS violates our Constitutional rights to secure our persons, papers and effects from unreasonable searches and seizures every year in the form of requiring us to file our income taxes and oh they can audit whoever they want, so they violate our rights even further. They don't need warrents to audit us, but Constitutionaly speaking, warrents should be issued to search our papers and effects.
3. The IRS violates the first amendment. Simply put, if a religious body that has a tax exemption begins to endorse one political party over another, the IRS can remove that tax exemption, thus denying the free excersize of religion
4. Besides the Constitutional issues, the IRS is also set up to rob the American people. Legally if you are held up and a theif robs you of 1,000 dollars, that theif legally has to report what he had stolen from you in his tax filing. He would have to return what he took from you, but the IRS gets to keep their share of the theft, oh after you already paid your income taxes. In other words, they practice extortion and organized crime.
5. The IRS does not have to go to court to get you to pay up, they can simply accuse you and force your wages to be taken from you if they think you owe them money, even if they are wrong, you have to prove it if you are wrong, which is contrary to judicial procedures where if an accusation is made against you, the accuser must provide the proof of wrongdoing. The IRS does not see it that way, and like to keep the courts out of this.
6. If the IRS is abolished along with a bunch of other Federal crap, the budget and tax burden on the American People will be less.
Posted by: Brian on April 4, 2005 04:09 PM
What most people don't realise is that the US tax code is VOLUNTARY. Ronald Reagan told you that. Moreover, under US laws, NONE of the money collected from taxation of wages, goes to benefit the people. ALL income tax money goes to the owners of the privately owned Federal Reserve (which is not a government dept, but a private corporation owned by a select group of mostly foreign bankers). The IRS is simply the collection arm of the federal reserve corp, which hoodwinked congress into allowing them to issue money (to print the actual notes, on demand, which again, is unconstitutional), and to collect that debt (plus interest!) from the People.
Income tax is contrary to the specific provisions of the US constitution, and the IRS is an unconstitutional pseudo govt body that has given itself illegal powers of threats and seizures. The establishment of the federal reserve, and the IRS, was the biggest step backwards, and the most treasonous act, in American history. Disbanding the IRS and the federal reserve corp. would be, historically, the most courageous act of this century. Indeed, it would benefit the entire world too, because it would once more limit US govt powers to make war, by controlling the availability of money. The money supply needs to be controlled, because at present, printing more dollars merely waters down the value of the dollars in The People’s pockets. Prior to the federal reserve corp, America was prosperous. The US govt has been printing and spending US dollars like confetti for 65 years though, which has plunged every US citizen into huge government-concealed debt, and worse still, that money has been largely squandered on killing innocent people. America may eventually recover, because its people are great, but it is going to take generations, and that process can start only after the IRS has been consigned to history, and its senior officers prosecuted and imprisoned.
People of America, wake up - the IRS is the most wicked, despicable agency ever devised by mankind. It is the face of evil and it is dragging you down. BUT, on the bright side, you have an opportunity now to rid the world of George Bush, and replace him with a president who will finally do right by the USA. Vote right, and start the recovery, or pay the price - just as you are doing right now.
You didn't do this to yourselves - Congress betrayed you in 1913 - but if you don't vote to close the illegal federal reserve and the IRS while you have the chance in 2008/9, you will have no-one else to blame for America's final downfall.
Posted by: Sanyan on June 3, 2007 09:35 AM
The IRS and the code is corrupt because it's a mess. It's a mess so that it can stay corrupt and prone to abuse by those at the controls of the IRS, which includes big corps who buy off politicians (and the politicians themselves, via the calling in of favors). See the following...
Michael Minns v. IRS debate on youtube...
Posted by: ReformTheIRS on February 7, 2008 12:59 AM
I likey...Ron Paul apparently wrote the forward on Michael Minns's book(s).
Posted by: Ron-Paul-Rocks on February 7, 2008 01:07 AM
Didn't Ron Paul co-author the book with Michael Minns? I read that somewhere...oh on Amazon, I think. Ron Paul knows!
Posted by: Ron Paul on the IRS on February 11, 2008 08:30 PM
Michael Minns directed the defense and won the appeal of the conviction of James and Pamela Morans, which were cleared on all 64 counts. They really pile it up, but then if pressed under strenuaous legal examination, they can scarcely prove their case...
Posted by: Michael-Minns on February 25, 2008 11:43 AM
Not sure that is right. Did he direct the appeal or the initial case?
Posted by: Michael_Louis_Minns on February 25, 2008 11:47 AM
I think it was just the appeal. The Morans may have been represented by another lawyer the first time out?
Posted by: Michael_Minns on February 25, 2008 12:47 PM
I SAY GET RID OF THE CRAPPY LIEING IRS NOW!!!!!! I GET NO STIMULUS PAYMENT BECAUSE MY SO-CALLED INCOME IS NOT HIGH ENOUG! THATS BULLSHIT!
Posted by: david d. on August 27, 2008 03:15 PM
just was put on hold by the internal RODENT service for 15 minites and was finally transferred and told they were to busy to take my call today.... I guess what im saying is "fuck the irs!"
Posted by: david d. on August 27, 2008 03:21 PM
In light of the recent murder/suicide by plane - I don't care what happens to anyone working for the IRS.
Posted by: Tom T. on February 19, 2010 10:56 AM
Vote Fairtax. Save our country and our people.
Posted by: anon on July 16, 2010 02:55 PM