Last Update: 17 April 2010 - NOTE: All links are working and open in a new tab.
Hardly any aspect of American life wastes more time and resources than the efforts of her millions of citizens who try to conform to - or not violate - the huge, inscrutible mass of Internal Revenue Service Rules & Regulations.
While some say that the 16th Amendment [which supposedly enabled the Federal Income tax] was never properly ratified [and therefore void], one would be a fool to not dutifully file their annual IRS return - to do so would result in drawing an instant Go Directly To Jail card. There is more 16th Amendment info here and also here.
Some folks - most notably Steve Forbes and Glenn Beck - advocate what they call a Flat Tax as a replacement for the IRS and all its rules and regulations. At least it's fairly simple: declare your income and send in some percentage (Steve favors 17%) of it to the Federal Government. Simple indeed, but there is a serious caveat: Exactly what is "income" and how is it to be calculated? What about illegal income, pension income, deductions from income, etc, etc ?? This absolutely suggests an immediate creation of new Flat Tax laws regarding the definition of, deductions from, and exemptions to, income. In only a few years, various lobbying groups would have manipulated Congress into carving out more special deals - just like they have done to the present IRS Tax Code. The Flat Tax is not quite so simple after all... Don't fall for it !!
I personally favor:
BEWARE: Do not ever (repeat: NOT ever - never, no way) allow adding an NST and/or a Value Added Tax ("VAT") and/or still more new taxes to the existing IRS Federal income taxes as proposed by Speaker Nancy Pelosi, other politicians, and in April 2010 by White House adviser Paul Volcker. Brits now face a VAT tax increase to 20%.
- Abandoning and disbanding the IRS, and all its associated regulations, and substituting in their place a
- National Sales Tax ("NST").Deceivingly described by the government as 'a form of sales tax,' the VAT is applied at every layer of production as "value" is "added." This scheme results in multiple layers of taxation upon the same item which invisibly becomes part of the sales price. Typically there are three distinct layers: manufacturer, distributor, and retailer. If the sales price at the retail cash register were, say, $100, then a 20% VAT would be charged on top of the invisible VAT that had already been added twice up the line.
NOTE: In the two tables above,
15% VAT TAX EXAMPLE
LAYER COST 20% Gross Profit 15% VAT Tax Total Price Manufacturer $50.00 (included) $7.50 $57.50 Distributor $57.50 $14.38 $10.78 $82.66 Retailer $82.66 $20.66 $15.50 $118.82 ... VAT TOTAL TAX $33.78 ... ... ... % of Retail Price: 28.43% ...
25% SALES TAX EXAMPLE
LAYER COST 20% Gross Profit 25% SALES Tax Total Price Manufacturer $50.00 (included) $0.00 $50.00 Distributor $50.00 $12.50 $0.00 $62.50 Retailer $62.50 $15.63 $19.53 $97.66 ... SALES TAX TOTAL TAX $19.53 ... ... ... % of Retail Price: 20.00% ... "20% Gross Profit" = (0.20 * (Total Price - Taxes)) "Tax" = (Rate * ("Cost" + "Gross Profit"))
A true Sales Tax is added only once - at the point of final sale to the consumer.
The National Sales Tax is also known as The Fair Tax. Deeper current analysis by the Cato Institute suggests that a 15% NST rate would provide about the same tax revenue to the Federal Government as the present IRS system - more perhaps due to the savings in bureacracy-cost when the IRS is disbanded.
The NST is a consumption tax, the nature of which includes the following advantages:
Here is probably THE BEST review of the advantages, and necessary details, of implementing an NST I have seen. Please read it carefully.
- No more Federal Income Tax.
- Earn $1,000 in pay, and take home a $1,000 paycheck (less the usual Social Security, Medicare, and State taxes).
- No more IRS forms to fill out - no more trying to live ones private and business life based on minimizing adverse tax consequences - ever!
- Anyone can give themselves an instant tax break by lowering their spending for a while.
- Unlike the VAT, the NST can not be hidden by government(s) to be invisibly passed on to consumers.
- The "need" for Corporate Income Tax will disappear. Because CIT is always passed down to the final consumer (you and me), prices for the items we buy will go down when the CIT is abandoned.
- The rich spend way more than the rest of us, and so therefore "the rich" will pay "their fair share" of NST too.
- United Nations staff, all other foreign residents, plus foreign tourists would also pay NST tax (about time, too). Under the IRS system, they now get off scott-free.
- Persons making "under the table" transactions (e.g., cash, barter, etc) will eventually pay their fair shares of NST
- like every time they bought something at a traditional sales counter.
- Every time some rich Arab Oil Sheik buys a 500-million-dollar custom Boeing 767, or a Cadillac Escalade, they'll pay the full NST as well. Get the picture now ???
- Because no one has to declare (or hide) any "income", or fill out a Tax Return, 100% of illegal aliens, drug dealers, and all other criminals - even terrorists - would also be paying their fair shares of NST every time they purchased anything.
Here's a good summary of the article at the link immediately above:It is important to distinguish between tax-inclusive and tax-exclusive rates. The income tax and the flat tax are imposed on a tax-inclusive basis while traditional sales taxes are imposed on a tax-exclusive basis. Let us take as an example... assume someone who earns $100, pays $20 in taxes (whether an income tax, a flat tax, or a sales tax), and spends the remaining $80 on a CD player. Is the tax rate 20 percent or 25 percent? Both the income tax and the flat tax would be imposed on the $100 and thus the rate is 20 percent (i.e., 20/100 = 20%). The flat tax and income tax base are [both of the] tax inclusive [variety]. Traditional state sales taxes are imposed on the after-tax or tax-exclusive base. Thus, we typically would say that the sales tax rate needed to raise $20 is 25 percent (i.e., 20/80 = 25%). In each case the government is extracting the same resources [your tax bill] from the economy. Thus, to compare apples to apples, the sales tax rate that is comparable to the income tax rate or the flat tax rate is the tax-inclusive rate [i.e., 25%]. The 15 percent rate [is] proposed in this analysis [, which] is the tax-inclusive rate.
There you have it: A 15% rate for the NST which generates the same tax revenue as the current IRS laws and taxes. Again, you are urged to read carefully this article (same as the link above) on implementing an NST. Please read it carefully. It is fully documented with tables and statistics which support the sufficiency of the 15% rate for the NST.
IN ADDTION to the NST, I also advocate a complete return to the original, and Constitutional imposition of National Tariffs on all imported goods. This means that NAFTA, CAFTA, and all similar, foreign gravy-trains be abolished. This would also have the beneficial effect of favoring American Jobs and American-made goods over their foreign counterparts.
This link goes to a 100K .pdf file that supports the view that "goods, wares and merchandise" imported into our country by foreign nations should be the entire basis of all United States Federal Revenue. Very good reading...
Here are other related links:
Why an Income Tax is Not Necessary to fund the Federal Government.
Beware of Alternative Tax Plans.
Abolish the Federal Reserve System
Even More Federal Reserve Info
Federal Income Taxes Are Obsolete
Fabian's Fabulous Money Machine
NOTES FROM ARCHIVIST DAN MARTIN:
This is a complex subject, and the reader is advised to do further research on all the various aspects of its component parts. Form your own opinion based on the best facts available, not the highly spun propaganda spoon fed by the media. The worst thing one can do is to do nothing. Hold your elected public officials fully accountable. It is also essential that you become familiar with the history and practices of a private organization that has been referred-to as the greatest swindle ever perpetrated upon the American people:
The Federal Reserve System, also discussed at this informative link.
Complete your outrage by a long, slow look at the National Debt Clock. Gasp at the Current National Debt.
YES !! There is a 3-Step Cure for all of this stupidity: Do a CLEAN SWEEP in 2010!!
CURRENT: 0bama Dis-Approval Rating
- Change the Hearts of American Voters
- CAST OUT the
INCUMBENT POLITICIANS, then
PRESIDENT 0BAMA. It can be done!
CURRENT: Congress Dis-Approval Rating CURRENT: Pork Reports
(thanks to TeaPartyExpress.org)
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