Sunday, December 30, 2007

Congress - Tear Down This Wall

Ronald Reagan, with a similar phrase in 1987, summed up the yearnings of freedom-loving people everywhere. It was perhaps one of the most meaningful phrases in history.

So why would I presume the right to steal a phrase from possibly our greatest President? Because it’s just so applicable to the insidious barrier erected, and still in place, within this country.

The wall I speak of has been built and extended by Congress and has the endorsement of all the major candidates for President in 2008, with the sole exception of Mike Huckabee.

We all know the sordid history of the Berlin wall that President Reagan spoke of. But Americans are seldom taught the sordid history behind the Income Tax wall I write of.

In 1913 the U.S. Congress completely spit on the memory of our Founding Fathers by deceitfully circumventing one of the most cherished freedoms spelled out in the Constitution. Article 1 Section 9 of the U.S. Constitution explicitly forbids the imposition of a direct Federal tax based on Income. The Founders also made clear in numerous writings of the time their complete disdain for such direct taxation. Why? Chiefly because throughout history direct taxation has been the tool of tyrants and has always led to societal decay. Congress tried repeatedly to make a grab for the increased spending power they would derive from an Income Tax but for more than 120 years the Supreme Court thwarted such actions.

In 1913 Congress decided to do what they oftentimes do so well and mislead the American public. The 16th Amendment, giving Congress the authority to tax income, was sold to the public as a tax only on the most wealthy of Americans. Sound familiar?

Since then, Congressional spending has skyrocketed unchecked. Coincidence – I think not.

The Berlin Wall had the singular evil goal of preventing the escape of people from Communism to the Western democracies. The U.S. Income Tax has multiple goals that encourage behavior American society (at least the parts outside Washington D.C.) for the most part deem bad.

If we envision the U.S. Income Tax system as a wall, then it is a huge universal neon sign that flashes several messages. Most Americans don’t even see the messages, but you can bet most members of Congress (and I guess most Presidential candidates) do.

Those messages are:

  • Spend, Congress, Spend
  • Criminal Activity Pays
  • Americans Are Suckers

The evils behind these messages will be explained in this paper, but it is important to realize that there is no way for any Income Tax to be modified to be ‘made right’. The Founders were not stupid; they expressly forbid direct taxation for good reasons. Those reasons are as valid now as they have been for thousands of years. No citizen should be penalized for their productivity or at some point they will stop being productive. No citizen should be taxed more or less than another simply because they make more money than another citizen; for then the ones that can hide their money will pay less than their share and the others will pay more than their share.

All Income Taxation must be replaced. The Founders allowed for consumption taxes (ie excise taxes, duties, tariffs, etc). Only 1 piece of legislation has ever been introduced to totally replace all Federal Income Taxes.

It is called The FairTax (HR25). It would replace all Federal income taxes with a consumption tax on all retail (final consumer) spending above that necessary to maintain a poverty-level lifestyle. It will kick off the Constitutionally-mandated process to repeal the infamous 16th amendment. It will eliminate all Federal withholding from American paychecks. It will reign-in Congressional spending. It will stop rewarding criminal activity in America. It will immediately remove Congressional mandates on the American public of $500 BILLION per year.

All Democratic candidates as well as Republicans Rudi Gulliani and Mitt Romney vocally support the U.S. Income Tax system and oppose The FairTax. Why? Both will generate the same amount of taxes for the Federal government, but The FairTax will make the massive over-taxing of the American public totally visible for the first time since 1913. The Income Tax mandates that Americans transfer $500 BILLION yearly to a made-up industry created by Congress. I have to assume members of that industry are contributing huge sums to keep up the money flow.

Mike Huckabee is alone among the top-tier candidates for President calling on Congress to TEAR DOWN THAT WALL. He alone is willing to lead Americans in an attempt to take back our government. The attacks on him have stepped up greatly over the last month, not only because he has surged in national polls but because he is threatening to upset quite a few very rotten apple carts.

But now, let’s get back to the meaning behind those evil messages being flashed by ‘The Income Tax Wall’.

Message #1 – Spend, Congress, Spend

By directly taxing the incomes of legal Americans, especially by confiscating the money straight out of their paychecks, Congress guarantees itself a steady (and massive) stream of funds. The only way to reduce Federal taxes you pay is basically to choose to lower your income. Maybe to Income Tax supporters this is a valid choice but I’ve never seen it done.

If Congress were to allow Americans to actually see the amount of Income Taxes they pay then there would almost certainly be a revolt. But have you ever tried looking into the 60,000-plus pages of the U.S. Income Tax Code? It is incomprehensible to even the IRS. No one is treated the same. Only individuals pay taxes (who else can actually pay anything) but illusions are spun so that there are individual taxes, corporate taxes, payroll taxes, FICA taxes, estate taxes, and so on and so on. NO American can say how much they pay the Federal government in taxes.

So Congress can raise taxes every day without fearing retaliation. Just raise taxes on certain corporations and most Americans say ‘yeah, soak those corporate goons’. Just raise tax rates for individuals above a certain income level and most Americans say ‘yeah, soak the rich’. Use the ability to tax certain groups to buy the votes of other groups.

Most members of Congress are deathly afraid of the consequences of ONE visible-to-everyone tax rate that is applicable to EVERY American. That would make it political suicide to vote for a tax increase without a very valid reason. Congress would actually have to do what it did 100 years ago, LIVE WITHIN IT’S MEANS.

Message #2 – Criminal Activity Pays

The Greek philosopher Plato said over 2000 years ago: “When there is an income tax, the just man will pay more and the unjust man less on the same amount of income.” True then, true now.

A government can only tax reported income. How could it do anything else? Criminals don’t report their income. Thus, criminal activity is exempt from taxation.

But Congress does not reduce needed government revenues because it estimates 25 to 30% of Americans mis-report their taxes. Those are Treasury Department estimates, not mine. No, Congress collects those missed taxes from legal, law-abiding Americans.

About $700 BILLION per year is the estimate of taxes that are not collected from Americans on income from either illegal activities or non-reported legal activities. Given a roughly $2.5 TRILLION dollar revenue stream to the Feds in 2006 that means every legal, law-abiding American was forced to pay about 28% extra tax on the average just to make up what the crooks didn’t pay.

So, given a choice between earning $1000 in a legal manner or $1000 selling drugs our Government essentially has in place a system which favors the drug-seller. He gets to keep all his $1000 while the poor working citizen gets to keep only $600 to $750 of his earnings (depending on the tax-bracket). That is insane! But yet candidates who support this policy brag of how they will ‘vigorously fight crime’. Why not change the policy that makes crime tax-exempt? That’s a major part of Mike Huckabee’s plan.

Consider illegal aliens. Our Government essentially has a neon sign flashing all along the Mexican border saying to PLEASE cross here illegally. Get paid under-the-table in the U.S. and your $1 is worth $1 while the $1 of an American citizen is only worth 60 to 75 cents because of our tax system. That is insane! But yet candidates who support this policy brag of how they will ‘secure our borders’. Why not change the policy that makes illegals tax-exempt? That’s a major part of Mike Huckabee’s plan.

Message #3 – Americans Are Suckers

In the early 1900s rumor has it Congress considered trying to save the buggy industry even after the horse-and-buggy’s demise. Outrageous, you say? Well, consider the tax-compliance industry created solely by Congressional mandate.

Americans spend approximately $500 BILLION per year in tax preparation, tax lawyers, tax planning, etc. No shelter is provided, nor clothing, nor food, nor entertainment. The ONLY reason this $500 BILLION per year industry exists is for Americans to comply with the complicated U.S. Income Tax.

Thus, the $2.5 TRILLION in tax revenues to the Federal Government in 2006 actually cost the American public $3.0 TRILLION. Does no one see a problem in the Government making us pay an average of 17 cents to a tax-preparer for the privilege of sending $1.00 in taxes to Washington?

Mike Huckabee does, it seems.

President George Bush passed some tax cuts in his first term that amounts to maybe $125 BILLION per year. These are applauded by most of the Republican candidates because each year that is $125 BILLION more that gets freed up to fuel our national economy. He was right to do this, in my opinion.

Mike Huckabee (through support of The FairTax) wants to eliminate the $500 BILLION per year that buys us NOTHING. Without even counting any tax cuts that is $500 BILLION freed up to fuel the American economy. The cost of doing this; that tax-compliance industry goes the way of the buggy-makers and those people move into actual productive jobs.

There is nothing at all wrong with tax lawyers and such. The problem is that the only reason anyone uses their services is because the Federal Government says we have to.


If the reader still does not see the U.S. Income Tax as a barrier of a similar magnitude as the Berlin Wall, it can only be because their livelihood somehow revolves about the U.S. Income Tax.

I thus end with the title of this paper. I’d love to hear a U.S. President issue this challenge to the tax-and-spend branch of our Federal Government.

Congress – Tear Down This Wall!!!!!


Andrew said...

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Contact us if you have any questions.

Kbaer said...

Hey, Great Blog...

I love the FairTax!!!!!
I've started handing out copies of the book and every single person that has read the book has loved the tax.

Press On FairTax Warrior!!!!

MARK said...

Fairtax is like those pills they sold stupid people, convincing them they could get 100 miles a gallon, using water as fuel.

I know it sounds great -- I used to like Fairtax. And yes we DO need a new tax code.

But not this farce.

Imagine you wake up one morning, and the Fairtax is now law.

Imagine your rent just went up 400 dollars, cause fairtax taxes your rent.

Imagine if you heat your house -- cause fairtax taxes you for your utilities 200 tax$

Imainge if you need a back operation -- cause fairtax taxes people's medical cost. 20,000 tax.

Imagine if your dad or mom were in a nursing home -- cause they would be taxed on their total cost to stay in nursing care. 25,000 a year.

Imainge if you pay insurance premiums for cars, your house, or health -- cause fairtax taxes your insurance premiums. 200 -400 a month.

Imagine if someone sent you a "prebate" check for 200 dollars, to pay the above 40,000 dollars in taxes.

Imaigine if you work in the auto industry -- because people buying new cars will have a 30-50% sales tax.

There is so much wrong with this fairtax. Better hope it doesnt pass, folks, you will look so so silly

I hope like hello it passes, I would love it, really I would.

You can learn about this anywhere, I have a blog fairtaxabsurdity. blogspot dot com

FairTaxWarrior said...

Mark and I have exchanged msgs on this. He doesn't listen to what I'm saying and I don't understand too much of what he is saying. But even though he lambasts The FairTax he keeps claiming he really wants it to be passed. I don't know what to make of him.

MARK said...

Gary --

I want this to pass, cause I want to watch the uproar. Plus, the country -- if it passed this -- would sorely need an education in economics and pyschology.

Passing this tax code would give them more lessons than they may want.

What part of my points don't you understand?

Do you not realize fairtax is on rent? All renters would pay much higher rent. What part of that don't you understand?

All insurance premiums -- taxed.

All utility bills -- taxed.

What part of that is hard to understand?

I want to hear 70 year old widows complain about 25,000 sales tax on her hip replacement.

I want to hear the Comptroller of the United States say the Treasury can't pay 600 billion in taxes -- even if it wanted to. It has to write the check for taxes it "pays"

I think it would be a riot, I really would love to see this and 1000 other hilarious things happen.

In fact, Im scared they won't pass the FT, that everyone will demand exemptions BEFORE it passed, so it won't pass. It can't pass, darn it. Its just too goofy.