Video: Fair Tax group makes argument handed to it on silver platter by IRS

posted at 10:41 am on June 13, 2013 by Ed Morrissey

The Fair Tax didn’t get a lot of support in two different presidential-primary cycles.  Mike Huckabee tried to win the Republican nomination on the Fair Tax platform in 2008, and Herman Cain tried again in the 2012 cycle with a modified approach to it in his 9-9-9 plan.  It didn’t have enough political juice to create momentum for either candidate — but that was before the exposure of political corruption at the IRS reaching all the way to its headquarters in Washington DC.  Suddenly, any plan that eliminates the IRS looks better, and Americans for Fair Taxation strikes while the iron is hot:

The Washington Post’s Aaron Blake takes care to point out that AFT is headed by a 1%er:

A group advocating for a flat sales tax is going up with a new nationwide ad buy urging members of Congress to abolish the IRS.

Americans for Fair Taxation, a group headed by wealthy super PAC donor Leo Linbeck III, will launch the ads Monday. The ad buy is in the mid-six-figures, according to the group. …

Linbeck made a splash in the 2012 election by founding a super PAC devoted to unseating incumbents in primaries, called the Campaign for Primary Accountability.

How about we just debate it on the grounds that it might be, y’know, a good idea? Switching to a consumption tax has the potential to discourage consumption (taxation usually lowers the incidence of any activity), and passing a constitutional amendment to repeal the 16th Amendment would be a monumental effort.  However, the payoff would be that the federal government would no longer need to know all of your income and financial transactions, and that tax collection would focus exclusively on commercial entities rather than private citizens.

After the recent revelations of political targeting by the IRS, that outcome sounds better and better.

Update: The original video link got pulled, but the new URL has been added in its place.

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9 9 9

Bmore on June 13, 2013 at 10:44 AM

Old CW:
If you dislike going to the DMV, you’ll dislike Obamacare.

New CW:
If you dislike Boss Hogg, pre-Jindal Louisiana governors, & Vlad Putin, you’ll dislike Obamacare.

itsnotaboutme on June 13, 2013 at 10:47 AM

Either a flat tax or a fair tax is the only way to reform both the tax code and the corrupt bureaucracy.

Doughboy on June 13, 2013 at 10:48 AM

Like the DC ruling elite are ever going to give up this power.

acyl72 on June 13, 2013 at 10:49 AM

Very few politicians out there will accept any tax plan that cannot be manipulated.

Tweeking taxes is their Viagra.

Jabberwock on June 13, 2013 at 10:52 AM

Either a flat tax or a fair tax is the only way to reform both the tax code and the corrupt bureaucracy.

Doughboy on June 13, 2013 at 10:48 AM

I don’t see how a flat tax would do anything to eliminate the IRS.

iwasbornwithit on June 13, 2013 at 10:53 AM

The IRS was designed by bureaucrats as a method to abuse their political power which is why the left protects them so much.

The American people have been rightly complaining about NSA abuses but have been required to turn over their personal financial information to the IRS for the past 50+ years.

I’m highly sure that the IRS was monitoring the Romney campaign and reporting all activities to the Obama administration. The Romney campaign was required to keep track of all financial activity and I’m certain that Obama was abusing the Romney campaign’s due diligence for his own personal corrupt advantage.

Kingfisher on June 13, 2013 at 10:56 AM

I think these organizations should get the big retailers where the LIVs shop (Walmart, K-Mart, Target) to start printing on receipts the amount the customer paid to cover the company’s income taxes and regulatory compliance costs.

This would achieve two things:

1) Give the LIVs pause to think about what it means when they vote for people who want to tax and regulate those big, evil corporations.

2) Soften the ground for the Fair Tax, since it lets people know they’re already paying it.

Odysseus on June 13, 2013 at 10:56 AM

Either a flat tax or a fair tax is the only way to reform both the tax code and the corrupt bureaucracy.

Doughboy on June 13, 2013 at 10:48 AM

I used to be a flat taxer but then I learned that we had what almost amounted to a flat tax in 1986. Subsequent Congresses restored the non-flat status. A flat tax therefore does not remain flat for long.

Odysseus on June 13, 2013 at 10:59 AM

Flax tax good, Fair Tax even better

commodore on June 13, 2013 at 11:00 AM

I don’t see how a flat tax would do anything to eliminate the IRS.

iwasbornwithit on June 13, 2013 at 10:53 AM

I didn’t say it would eliminate them. I said reform. A flat tax would allow the IRS to be drastically reduced in size and limit their ability to abuse the tax code the way they have over the last few years. Plus it would have the added benefit of reducing the power and influence over lobbyists in DC.

A fair tax would obviously have an even greater effect. But a national sales tax is a tougher sell than a flat tax.

Doughboy on June 13, 2013 at 11:01 AM

A fair tax would obviously have an even greater effect. But a national sales tax is a tougher sell than a flat tax.

Doughboy on June 13, 2013 at 11:01 AM

Yep!

No to any morphing into a euro-style VAT.

workingclass artist on June 13, 2013 at 11:06 AM

The problem with the national sales tax is that you are dealing with a duplicitous Democrat party. They will attempt to take it in two steps.
1) implement the national sales tax
2) eliminate income tax.

Well, they’ll do the first gladly. When the second step comes up, they’ll suddenly discover something else that needs to be done (“I hear my mom calling me home for dinner”).

We’ll end up with BOTH.

kurtzz3 on June 13, 2013 at 11:08 AM

I am all in favor of the Fair Tax, repeal of the 16th (and 17th, but that’s a different topic) amendments, and abolishing the IRS.

How about we just debate it on the grounds that it might be, y’know, a good idea?

For the left, that woud be against the rules.

ITguy on June 13, 2013 at 11:12 AM

I would love to see a 2-3% National sales tax on everything and the elimination of the IRS and US Tax Code, but it is never going to happen. The Pols are deathly afraid of the results of that kind of tax and subsequent elimination of the IRS and the American tax laws. Tax loop holes are a gigantic part of the business of Politicians. It is their main tool to reward/punish people.

Johnnyreb on June 13, 2013 at 11:12 AM

I used to be a flat taxer but then I learned that we had what almost amounted to a flat tax in 1986. Subsequent Congresses restored the non-flat status. A flat tax therefore does not remain flat for long.

Odysseus on June 13, 2013 at 10:59 AM

It will be an eternal struggle regardless. Let’s say the federal income tax is abolished and replaced with a fair tax. Who’s to say they won’t attempt to reinstate the income tax shortly thereafter and have the best of both worlds(from their perspective anyway)?

Doughboy on June 13, 2013 at 11:13 AM

9 9 9

Bmore on June 13, 2013 at 10:44 AM

I’m for it. If, after awhile it doesn’t do the job, look for another solution. Nothing should be concrete and unchangeable when it comes to a system of taxing. Nor should the solution be continually raising taxes to suit the pols in providing for themselves and cronies and buying voting blocs of takers with funds from the redistributed tax revenue of the producers.

hawkeye54 on June 13, 2013 at 11:14 AM

Eliminating special breaks and using the savings to lower marginal rates will spur economic activity and decrease the power of government to play favorites and control behavior; so I favor that. However, our big problem is that the payroll tax cannot support the level of medicare and social security benefits when there are only two workers for each retiree. Unlike Ed’s dismissal of sales taxes as discouraging economic activity, I see a sales tax replacing the payroll tax to fund these entitlements as virtually a necessity. Right now retirees do not contribute to these programs even though they directly benefit and often have more wealth than the young workers. Since the business pays half the payroll tax currently, this cost saving for the business would help offset the effect of lower sales and in the long run will make US businesses more competitive and thus grow economic activity in the long run.

KW64 on June 13, 2013 at 11:18 AM

Let’s say the federal income tax is abolished and replaced with a fair tax. Who’s to say they won’t attempt to reinstate the income tax shortly thereafter and have the best of both worlds(from their perspective anyway)?

Given what we know of politicians and their insatiable hunger for more of our money, it wouldn’t take long.

For our leftists in politics, the best of all worlds would be to have our income go directly to them for managing and to equitably distribute to those “less fortunate” and deciding how much of it really needs to be returned to us to live on.

hawkeye54 on June 13, 2013 at 11:19 AM

We’ll end up with BOTH.

kurtzz3 on June 13, 2013 at 11:08 AM

Not if you do it right… pass an amendment bill (a new amendment to rescind the 16th amendment one year from the date of ratification of the new amendment) in Congress, and once the Amendment bill goes off to the states for ratification, pass the Fair Tax bill with a provision that it only becomes active when the 16th amemdment is fully rescinded.

That gets things done in the right order, and gives 1 year for preparation for the switch.

ITguy on June 13, 2013 at 11:21 AM

I didn’t say it would eliminate them. I said reform. A flat tax would allow the IRS to be drastically reduced in size and limit their ability to abuse the tax code the way they have over the last few years. Plus it would have the added benefit of reducing the power and influence over lobbyists in DC.

A fair tax would obviously have an even greater effect. But a national sales tax is a tougher sell than a flat tax.

Doughboy on June 13, 2013 at 11:01 AM

I don’t know that the Fair Tax would be a more difficult sell than a flat tax, especially when you consider the “prebate” feature which would be attractive to low-income individuals.

I also don’t see how a flat tax would drastically reduce the size of the IRS…you still have many of the same issues regarding deductions, credits, exemptions, etc. There would be less tax brackets, obviously, but I don’t know that the number of tax brackets explains the size of the IRS.

I will go further to say that the IRS, under the existing system, should be drastically reduced, but it isn’t so I have no faith that the flat tax would embolden politicians to drastically reduce the size of the IRS.

iwasbornwithit on June 13, 2013 at 11:21 AM

Kill the IRS. Drive a stake through its heart. Never Never let it breath again. It is a repressive tool of government.

tim c on June 13, 2013 at 11:23 AM

I strongly support the Fair Tax, but I also don’t think it addresses the root cause of the problem which is out of control federal spending on programs that are well outside its enumerated powers.

Quite frankly, the only way out of this is s e c e s s i o n.

iwasbornwithit on June 13, 2013 at 11:24 AM

I also don’t see how a flat tax would drastically reduce the size of the IRS…you still have many of the same issues regarding deductions, credits, exemptions, etc. There would be less tax brackets, obviously, but I don’t know that the number of tax brackets explains the size of the IRS.

iwasbornwithit on June 13, 2013 at 11:21 AM

With a true Flat Tax, there are no deductions, exemptions, etc. The IRS could be reduced to 1/10th it size and be able to go after the non payers, which is pretty much all it would do after the tax rate is set.

Johnnyreb on June 13, 2013 at 11:24 AM

Let’s say the federal income tax is abolished and replaced with a fair tax. Who’s to say they won’t attempt to reinstate the income tax shortly thereafter and have the best of both worlds(from their perspective anyway)?

Doughboy on June 13, 2013 at 11:13 AM

I’m sure you’re right but there are some factors that I think would hamper their attempts:

1) No annual or quarterly filing with the IRS. I think this would have a bigger positive impact than many people believe.
2) Paychecks would be much bigger.
3) Audits would be extremely rare, at a minimum.

Kingfisher on June 13, 2013 at 11:25 AM

Is there any provision in the FairTax bill to prevent both an income tax and a sales tax?

The short answer is that there is no provision in the FairTax bill (HR 25) that would prevent having a national sales tax and the income tax. However, the FairTax legislation does three things that effectively dismantle the income tax: (1) it abolishes the IRS, (2) it repeals all statutory language having to do with taxing income and payroll (i.e., the Internal Revenue Code), and (3) it eliminates the filing of annual income tax returns to the federal government for over 140 million Americans. The 16th Amendment does not “require” an income tax, it only “allows” one, and the FairTax will have broken that egg in a million pieces. It would be extremely difficult to put that egg “back together again.” Once the FairTax is enacted it would be an extremely daunting task for Congress to make people start filing income tax returns again. There would be a public uproar. Once the American public has experienced the freedom from filing income tax returns it’s hard to imagine them tolerating going back.

Furthermore, the sponsors of the FairTax are totally dedicated to the permanent repeal of the income tax. No current supporter of the FairTax would support the FairTax unless the entire income tax is repealed. There is a separate bill, HJR 16, which repeals the 16th Amendment to the Constitution but it must go through a different adoption process than HR 25. HJR 16 has to be passed by a two-thirds vote of members of both the House and the Senate and be approved (or ratified) by three-fourths of state legislatures (38). We are currently laying the organizational groundwork for this push and have already started the educational process at the state level.

Finally, the reality is that we already have both an income and a type of sales tax today. All of our U.S. produced goods and services are burdened with an “embedded” tax due to the cascading of income and payroll taxes paid by U.S. employers to the U.S. Treasury at every step of production. Of course, these costs are passed on to the ultimate payer, the customer. It’s fair to call these embedded taxes a “sales tax” because we pay it every time we buy any goods or services — we just don’t see it. The FairTax eliminates these embedded taxes, resulting in a single-rate national sales tax visible to all.

ITguy on June 13, 2013 at 11:27 AM

Johnnyreb on June 13, 2013 at 11:24 AM

I think it could be reduced to 1/10 of its size right now. Other than Ted Cruz calling for the IRS to be abolished, are there any others in the GOP that are even threatening to slash their budget?

BTW, I like the flat tax more than what we have right now, but I can’t support it because it is still a tax on income which is the least efficient way for the government to tax something.

iwasbornwithit on June 13, 2013 at 11:30 AM

For our leftists in politics, the best of all worlds would be to have our income go directly to them for managing and to equitably distribute to those “less fortunate” and deciding how much of it really needs to be returned to us to live on.

hawkeye54 on June 13, 2013 at 11:19 AM

I’m really beginning to loathe the left.

I just read an article about that valedictorian in Texas whose mic was cut off by the principal when he mentioned Christ. Well seems that wasn’t enough and the principal was making threats to de-rail the kid’s appointment to the Naval Academy because of it. I think it must all be anger over being defied by a student.

Same holds true with any tax discussion. The left and right hold different views. The right believes in economic opportunity. The left views the economically successful as a means to “correct” social injustice by forcing them to pay for a bunch of worthless deadbeats. They get angry with those who want the parasites to pay their own way- as if it were society’s problem the deadbeats don’t have marketable skills, training, or reliable transportation.

I say put in a consumption tax and make no exemptions. It is about time that the parasites who run around complaining about social injustice on their Obamaphones learned a little bit about life.

Happy Nomad on June 13, 2013 at 11:30 AM

Three points of order:

- A switch to a consumption tax scheme isn’t going to make the IRS (or a similar federal organization) go away. After all, the IRS predates the income tax by 60 years.
- If you think the IRS (or its successor) isn’t going to be involved in the lives of private citizens if the sole federal funding is consumption taxes, think again. All those rummage sales, just as an example, won’t be ignored.
- Unless the concept of a “pre-bate” is to be the mother of all welfare programs, the IRS (or its successor) is going to need to know about every dollar you make.

Steve Eggleston on June 13, 2013 at 11:31 AM

Quite frankly, the only way out of this is s e c e s s i o n.

iwasbornwithit on June 13, 2013 at 11:24 AM

This TX. resident would love to wake up one morning to discover there are only 49 states.

hillsoftx on June 13, 2013 at 11:31 AM

The beltway politicos will fight this tooth and nail. That includes BOTH parties – the tax code is their source of power and they are well aware of that. They will not go gently into that good night. Pity.

ghostwalker1 on June 13, 2013 at 11:32 AM

The Progressives in congress (both R and D) will fight the Fair Tax tooth and nail. They will lie that it is too heavily favorable to the “Wealthy” and craps on the “Middle Class”. What they will really mean is that it is too unfavorable to their Royal Power Structure and their Right to personally make their fortunes from favored perversions of the current tax system.

So, we come to another impasse: Are the low information voters going to buy the media-big government complex lies and preserve the status quo? Or will we educated voters be able to break through this time?

Sadly, recent history tells me it will be the former.

NOMOBO on June 13, 2013 at 11:35 AM

I used to be a flat taxer but then I learned that we had what almost amounted to a flat tax in 1986. Subsequent Congresses restored the non-flat status. A flat tax therefore does not remain flat for long.

Odysseus on June 13, 2013 at 10:59 AM

This just tells me that the real problem isn’t taxation or debt; it’s the aristocracy of criminals we have in DC. Any solution to our problems will require dealing with them in some way, or else they will continue to find other ways to plunge the rest of us deeper and deeper into debt and bleeding us dry.

Aitch748 on June 13, 2013 at 11:38 AM

hawkeye54 on June 13, 2013 at 11:14 AM

Yep. Shame really about the lack of unity behind Herman. Picture the country as it might be had we all rallied behind him. Now have all his detractors explain how we are better off now having not. Shame that. ; ) Coulda woulda shouda. Lol!

Bmore on June 13, 2013 at 11:41 AM

Three points of order:

- A switch to a consumption tax scheme isn’t going to make the IRS (or a similar federal organization) go away. After all, the IRS predates the income tax by 60 years.
- If you think the IRS (or its successor) isn’t going to be involved in the lives of private citizens if the sole federal funding is consumption taxes, think again. All those rummage sales, just as an example, won’t be ignored.
- Unless the concept of a “pre-bate” is to be the mother of all welfare programs, the IRS (or its successor) is going to need to know about every dollar you make.

Steve Eggleston on June 13, 2013 at 11:31 AM

All good points but the Fair Tax is still vastly superior for a number of reasons. The inconvenience imposed on rummage sales notwithstanding, it would get the government out of the lives of most citizens.

Our system of taxation by income tax is abhorrent in and of itself, but certainly replacing it with a Fair Tax does not solve the root cause of the problem which is unconstitutional government spending. However, I think more people would have “skin in the game” with a Fair Tax and be far less likely to support a tax increase that would actually affect them directly.

The other elephant in the room is the Fed. Right now, the federal government finances itself almost as much with money printed by the Fed as it does with tax revenues. This is all p*ssing in the wind if our monetary policy is not addressed. Fair Tax/Income Tax/Flat Tax won’t matter much if dollars are worthless. And inflation is the most regressive tax there is…

iwasbornwithit on June 13, 2013 at 11:42 AM

Three points of order:

- A switch to a consumption tax scheme isn’t going to make the IRS (or a similar federal organization) go away. After all, the IRS predates the income tax by 60 years.
- If you think the IRS (or its successor) isn’t going to be involved in the lives of private citizens if the sole federal funding is consumption taxes, think again. All those rummage sales, just as an example, won’t be ignored.
- Unless the concept of a “pre-bate” is to be the mother of all welfare programs, the IRS (or its successor) is going to need to know about every dollar you make.

Steve Eggleston on June 13, 2013 at 11:31 AM

Steve, I strongly encourage you to actually read the Fair Tax Book, or at least read the synopsis on their website.

–The IRS may not go away completely. But it’s function and power will be significantly curtailed. Rummage sales will not be in their purview. Used, or previously taxed, merchandise is not subject to taxation a second time around.

–Pre-bate amounts are the same regardless of your income. No one will pay tax for purchases made with income below the poverty level, whatever that is set as. The IRS will have no reason to know how much money you make.

Next time you make an argument, please arm yourself with the facts.

NOMOBO on June 13, 2013 at 11:45 AM

“Flat” or “Fair” works for me!!

Khun Joe on June 13, 2013 at 11:46 AM

This TX. resident would love to wake up one morning to discover there are only 49 states.

And no other flag raised above the Lone Star Flag. Pity secession is even being considered as a possibility, but if there in no other way…

hawkeye54 on June 13, 2013 at 11:52 AM

Picture the country as it might be had we all rallied behind him.

Sad that he wasn’t really prepared for the onslaught he faced in getting him out of the race. His own party was quite worthless in the matter. And, I suspect leadership was glad to see him quit.

hawkeye54 on June 13, 2013 at 11:55 AM

All good points but the Fair Tax is still vastly superior for a number of reasons. The inconvenience imposed on rummage sales notwithstanding, it would get the government out of the lives of most citizens.

Our system of taxation by income tax is abhorrent in and of itself, but certainly replacing it with a Fair Tax does not solve the root cause of the problem which is unconstitutional government spending. However, I think more people would have “skin in the game” with a Fair Tax and be far less likely to support a tax increase that would actually affect them directly.

The other elephant in the room is the Fed. Right now, the federal government finances itself almost as much with money printed by the Fed as it does with tax revenues. This is all p*ssing in the wind if our monetary policy is not addressed. Fair Tax/Income Tax/Flat Tax won’t matter much if dollars are worthless. And inflation is the most regressive tax there is…

iwasbornwithit on June 13, 2013 at 11:42 AM

Honestly, since the federal government is going to know about every dollar I make regardless of whether it taxes a percentage of that dollar or not, I’d rather keep them out of the business of taxing commerce (and thus also knowing every non-black-market dollar generated there) and have them take a flat percentage of what I make, preferably by a series of checks I have to cut to them.

The “pre-bate”, whether it is capped by the amount of money one makes or not, serves to keep people out of the net game of funding government. If memory serves, the last couple of “Fair”Tax proposals had roughly the same percentage of people not having a net tax liability as the current system.

The true problem is government is too fscking (to use the TEMS spelling) big, no matter how it’s funded.

Steve Eggleston on June 13, 2013 at 11:56 AM

Steve, I strongly encourage you to actually read the Fair Tax Book, or at least read the synopsis on their website.

–The IRS may not go away completely. But it’s function and power will be significantly curtailed. Rummage sales will not be in their purview. Used, or previously taxed, merchandise is not subject to taxation a second time around.

–Pre-bate amounts are the same regardless of your income. No one will pay tax for purchases made with income below the poverty level, whatever that is set as. The IRS will have no reason to know how much money you make.

Next time you make an argument, please arm yourself with the facts.

NOMOBO on June 13, 2013 at 11:45 AM

The problem is, I did. Thanks for admitting the “pre-bate” is the mother of all welfare programs.

Steve Eggleston on June 13, 2013 at 11:57 AM

“Flat” or “Fair” works for me!!

Khun Joe on June 13, 2013 at 11:46 AM

Flat= income tax with all it’s vagueries and opportunities for corruption. It is no different that the current system, except for the math. The math has little to do with the current problems with the taxation system.

Fair= consumption tax with all it’s benefits. It is not corruptable because it is controlled only by how much each individual spends. If I want to live at the poverty level, I pay no tax. If I want to live beyond my means, I pay excessive tax. It takes micromanagement control away from the government while adequately funding their necessary functions.

How could “either one” work for you?

NOMOBO on June 13, 2013 at 12:01 PM

Herman Cain was doing okay, until the Chicago smear machine came out with 999 bimbos.

kirkill on June 13, 2013 at 12:01 PM

Steve Eggleston on June 13, 2013 at 11:57 AM

How is nobody paying taxes on income below the poverty level “the mother of all welfare programs”? I think you simply choose to not understand the concept of equity in the Fair Tax system.

NOMOBO on June 13, 2013 at 12:03 PM

The problem with the national sales tax is that you are dealing with a duplicitous Democrat party. They will attempt to take it in two steps.
1) implement the national sales tax
2) eliminate income tax.

Well, they’ll do the first gladly. When the second step comes up, they’ll suddenly discover something else that needs to be done (“I hear my mom calling me home for dinner”).

We’ll end up with BOTH.

kurtzz3 on June 13, 2013 at 11:08 AM

Exactly, and this is precisely what happened in Kanada.

slickwillie2001 on June 13, 2013 at 12:04 PM

I’m highly sure that the IRS was monitoring the Romney campaign and reporting all activities to the Obama administration. The Romney campaign was required to keep track of all financial activity and I’m certain that Obama was abusing the Romney campaign’s due diligence for his own personal corrupt advantage.

Kingfisher on June 13, 2013 at 10:56 AM

Maybe it’s time to make the office of President a one-term position so that an incumbent can’t abuse their resources against an opponent. After all, we are the rulers and the president is just a temporary administrator–to stem the cries of those complainging about “lame duck” presidents.

Nutstuyu on June 13, 2013 at 12:09 PM

I would love to see a 2-3% National sales tax on everything and the elimination of the IRS and US Tax Code, but it is never going to happen. The Pols are deathly afraid of the results of that kind of tax and subsequent elimination of the IRS and the American tax laws. Tax loop holes are a gigantic part of the business of Politicians. It is their main tool to reward/punish people.

Johnnyreb on June 13, 2013 at 11:12 AM

Which makes you wonder why some genius doesn’t come up with a way to initiate constitutional amendments from the people–instead of having to start in Congress.

Nutstuyu on June 13, 2013 at 12:11 PM

Kill the Beast(IRS)!

Flat or Fair

End the power of corrupt political overlords.

D-fusit on June 13, 2013 at 12:13 PM

How is nobody paying taxes on income below the poverty level “the mother of all welfare programs”? I think you simply choose to not understand the concept of equity in the Fair Tax system.

NOMOBO on June 13, 2013 at 12:03 PM

The “pre-bate” is a transfer of wealth from those who consume to those who don’t, not limited by either the amount spent on taxable items or, in its current version, the income earned. Hence, it is a welfare program.

Steve Eggleston on June 13, 2013 at 12:17 PM

Ed, repeal of the 16th Amendment is unnecessary. It simply says Congress has the power to tax incomes; it does not say it must use this power. Congress also has the power constitutionally to grant letters of marquis and reprisal, but you don’t see them doing that.

radjah shelduck on June 13, 2013 at 12:20 PM

We’ll end up with BOTH.

kurtzz3 on June 13, 2013 at 11:08 AM

Not if you do it right:

Amendment I – Restrictions on Tax Powers of Congress

Section 1. Congress shall make no law laying or collecting taxes upon incomes, gifts, or estates, or upon aggregate consumption or expenditures; but Congress shall have power to levy a uniform tax on the sale of goods or services.
Section 2. Any imposition of or increase in a tax, duty, impost or excise shall require the approval of three-fifths of the House of Representatives and three-fifths of the Senate, and shall separately be presented to the President of the United States.
Section 3. This article shall be effective five years from the date of its ratification, at which time the sixteenth Article of amendment is repealed.

Section 1 of this amendment would disallow federal income, gift, estate, and consumption taxes. It would explicitly permit a national sales tax, an idea which has been proposed in the United States as the FairTax. Section 2 would require a supermajority of three-fifths of both houses of Congress for any new tax or tax increase. Section 3 repeals the Sixteenth Amendment, and delays the implementation of the whole amendment for five years after it is ratified, to give Congress time to dismantle the IRS.

I sent this text to my Congressman with the simple line: It’s time. Anybody want to join me?

Odysseus on June 13, 2013 at 12:38 PM

Ed, repeal of the 16th Amendment is unnecessary. It simply says Congress has the power to tax incomes; it does not say it must use this power. Congress also has the power constitutionally to grant letters of marquis and reprisal, but you don’t see them doing that.

radjah shelduck on June 13, 2013 at 12:20 PM

The primary reason you don’t see Congress granting letters of marque and reprisal is, unlike implementing its power to tax income, it represents a ceding of federal government power. Also, the US is about the only country that hasn’t ceded its power to issue such letters through treaty (specifically, the Paris Declaration Respecting Martime Law of 1856).

Steve Eggleston on June 13, 2013 at 12:39 PM

Steve Eggleston on June 13, 2013 at 12:39 PM

You wouldn’t happen to be an accountant, would you? ;)

iwasbornwithit on June 13, 2013 at 12:43 PM

Which makes you wonder why some genius doesn’t come up with a way to initiate constitutional amendments from the people–instead of having to start in Congress.

Nutstuyu on June 13, 2013 at 12:11 PM

Get 2/3rds of the states to call for a Constitutional Convention (and then be prepared to be bitterly disappointed at the the amendments that come out of said convention).

Steve Eggleston on June 13, 2013 at 12:46 PM

You wouldn’t happen to be an accountant, would you? ;)

iwasbornwithit on June 13, 2013 at 12:43 PM

Not quite, though my dad was an auditor. I would do my income taxes completely unaided, but my handwriting sucks and I don’t have a typewriter.

Steve Eggleston on June 13, 2013 at 12:48 PM

Get 2/3rds of the states to call for a Constitutional Convention (and then be prepared to be bitterly disappointed at the the amendments that come out of said convention).

Steve Eggleston on June 13, 2013 at 12:46 PM

No second amendment and the welfare state enshrined forever.

Odysseus on June 13, 2013 at 12:49 PM

Why are they still being funded…?

Seven Percent Solution on June 13, 2013 at 12:53 PM

The “pre-bate” is a transfer of wealth from those who consume to those who don’t, not limited by either the amount spent on taxable items or, in its current version, the income earned. Hence, it is a welfare program.

Steve Eggleston on June 13, 2013 at 12:17 PM

Ah, but those people consuming more would be choosing to have their wealth transferred to those who are poorer or more thrifty. Wouldn’t you much rather have the “welfare” system in the hands of the people who are really providing the “welfare” instead of the government pukes who simply lift it out of your pocket? And if you choose to not participate in funding this “welfare” system as you call it, then live as close to the poverty line as you can.

Under just about any circumstance, I would rather have the distribution of my money put in my hands, not the government’s.

Again, Steve, please consider the equity that the Fair Tax brings to the taxation system.

NOMOBO on June 13, 2013 at 12:57 PM

Get 2/3rds of the states to call for a Constitutional Convention (and then be prepared to be bitterly disappointed at the the amendments that come out of said convention).

Steve Eggleston on June 13, 2013 at 12:46 PM

The main problem with that is that you cannot control what is done in one.

SpudmanWP on June 13, 2013 at 12:58 PM

btw, the main complaints about a flat tax like 999 is that increases the amount of collected tax from our poor & lower-middle class.

In the 999 plan it is about 15% in total.

That is the reason why I support the Fair Tax as opposed to the Flat Tax.

Besides, it would create a de-facto National ID which I am okay with.

SpudmanWP on June 13, 2013 at 1:01 PM

Pre-bate amounts are the same regardless of your income. No one will pay tax for purchases made with income below the poverty level, whatever that is set as. The IRS will have no reason to know how much money you make.

NOMOBO on June 13, 2013 at 11:45 AM

Actually Steve has a point. I used their handy calculator on their site a couple of years ago and my “pre-bate” was about $2200, I believe. Here’s the thing, My monthly expenses are around $1800-$2000, in which about $600 is for gas (long commute to work). If FairTax were to pass, why in the world would I have to work if the government is just going to hand me $2200 a month just for being here? Without the gas expense of a long commute, my monthly expenses would drop to about $1200-$1500. I could make a profit off the government by doing nothing. That’s not right.

Conservative Independent on June 13, 2013 at 1:02 PM

No second amendment and the welfare state enshrined forever.

Odysseus on June 13, 2013 at 12:49 PM

That would be the best-case scenario.

Back towrd the topic at hand, in order of preference, how to fund the federal government (because not funding it at all, as temporarily-satisfying as it may be, isn’t an option):

- Poll/head tax (i.e., you live here, you pay $X). No, it is not unconstitutional; the 24th Amendment merely says that failure to pay any tax and specifically a poll tax may not disenfranchise a person from a election for federal office.

- Flat income tax with no deductions (i.e., X% of every dollar, from the first to the last).

- Consumption tax with no rebates/prebates.

- Flat income tax with deductions (the fewer and more-broad, the better).

- Consumption tax with rebates/prebates.

- Way at the bottom, the current mess.

Steve Eggleston on June 13, 2013 at 1:02 PM

Actually Steve has a point. I used their handy calculator on their site a couple of years ago and my “pre-bate” was about $2200, I believe. Here’s the thing, My monthly expenses are around $1800-$2000, in which about $600 is for gas (long commute to work). If FairTax were to pass, why in the world would I have to work if the government is just going to hand me $2200 a month just for being here? Without the gas expense of a long commute, my monthly expenses would drop to about $1200-$1500. I could make a profit off the government by doing nothing. That’s not right.

Conservative Independent on June 13, 2013 at 1:02 PM

You did the math wrong…

For a single person, the pre-bate is $220 a month, not $2200.

http://www.fairtax.org/site/PageServer?pagename=FAQs#3

SpudmanWP on June 13, 2013 at 1:08 PM

I support the Fair Tax or similar national sales tax and hope we can get it done in the next few elections, at the latest, but frankly I think the IRS needs to be abolished right now, before the next election, so that we can have a fair election without IRS suppression and corruption. And what’s more, I think that after the IRS has been abolished then we need to have call a special election because the IRS activities invalidated the ’12 election and our present government is illegitimate.

FloatingRock on June 13, 2013 at 1:09 PM

Conservative Independent on June 13, 2013 at 1:02 PM

I assume that you eat, occasionally buy clothes to wear, even buy toothpaste. But if you enjoy a life below the poverty line and can pocket the difference, then more power to you. Just keep repeating to yourself–”I beat my head against the wall because it feels so good when I stop”.

NOMOBO on June 13, 2013 at 1:10 PM

–Pre-bate amounts are the same regardless of your income. No one will pay tax for purchases made with income below the poverty level, whatever that is set as. The IRS will have no reason to know how much money you make.

Next time you make an argument, please arm yourself with the facts.

NOMOBO on June 13, 2013 at 11:45 AM

How are they going to know if you are below the poverty level in order to receive your pre-bate then?

Somebody’s gonna have to see your income if there is going to be an income-based separation of taxation.

Pattosensei on June 13, 2013 at 1:11 PM

Because the ’12 election was a con job and the present government is illegitimate, if they impose amnesty then amnesty is also illegitimate and we need to overturn it after the revolution.

FloatingRock on June 13, 2013 at 1:13 PM

SpudmanWP on June 13, 2013 at 1:08 PM

Thanks for the correction! I still prefer a flat income tax, but now I can set aside that issue I had with FairTax.

Conservative Independent on June 13, 2013 at 1:15 PM

How are they going to know if you are below the poverty level in order to receive your pre-bate then?

Somebody’s gonna have to see your income if there is going to be an income-based separation of taxation.

Pattosensei on June 13, 2013 at 1:11 PM

The “Fair” part of the Fair Tax is that every citizen (calculated as a family) of the US will get the pre-bate if they wish, no income declaration required.

Details Here

SpudmanWP on June 13, 2013 at 1:17 PM

I prefer a sales tax regime like we have up here in Washington State in which food is exempt at the register and no rebate check from the government is necessary. Why condition people to expect rebate checks from the government? Just don’t collect sales tax on qualified food items. I haven’t read anything on the Fair Tax for years but when last I did, this was my biggest problem with it.

FloatingRock on June 13, 2013 at 1:21 PM

I am open to either a flat or fair tax, with some caveats:

I think the fair tax would require a constitutional amendment because it is not a tax on income. The same applies to a VAT or national sales tax. (Excise taxes apply to specific goods or services, not across-the-board, unlike a sales tax or VAT.)

What do you do about people with Roth IRAs? I think there has to be a system where retirees cashing in their Roth investments receive a tax credit to offset the income taxes they already paid.

Rich H on June 13, 2013 at 1:21 PM

Besides the obvious abolition of the IRS that the Fair Tax would bring, there are some other benefits that would boost the US economy.

1. The tax is not applied to exports. This would bring manufacturing jobs back to the US as the cost of exported good would drop considerably.

2. No more need to keep investment funds outside the US in Tax Shelters. The added funds would help to spur growth in the US.

3. Stock Market activity would grow as the profits would no longer be taxed.

SpudmanWP on June 13, 2013 at 1:23 PM

The “Fair” part of the Fair Tax is that every citizen (calculated as a family) of the US will get the pre-bate if they wish, no income declaration required.

Details Here

SpudmanWP on June 13, 2013 at 1:17 PM

I don’t have time to go into details at the moment, but I can see all kinds of problems with that.

Pattosensei on June 13, 2013 at 1:25 PM

How are they going to know if you are below the poverty level in order to receive your pre-bate then?

Somebody’s gonna have to see your income if there is going to be an income-based separation of taxation.

Pattosensei on June 13, 2013 at 1:11 PM

EVERYBODY gets a prebate based on number of dependents, NOT based on income. It’s the amount of tax money that would be collected on expenditures funded by an amount up to the poverty line. So, say the government put the poverty line at $2000 per month, you would have in the prebate enough money to pay the sales tax on $2000 per month. This is regardless if you make $0 income or $1B income.

The government would have no reason to know how much income you make.

NOMOBO on June 13, 2013 at 1:28 PM

I prefer a sales tax regime like we have up here in Washington State in which food is exempt at the register and no rebate check from the government is necessary. Why condition people to expect rebate checks from the government? Just don’t collect sales tax on qualified food items. I haven’t read anything on the Fair Tax for years but when last I did, this was my biggest problem with it.

FloatingRock on June 13, 2013 at 1:21 PM

The designers of the Fair Tax were trying to assuage the fears of people who object to a Flat Tax on the basis that it would collect a large amount of tax from the lower and middle class. Exempting food from taxation in a Flat [sales] Tax systems would not help much as food is a relatively small portion of your monthly goods purchases.

SpudmanWP on June 13, 2013 at 1:30 PM

SpudmanWP on June 13, 2013 at 1:30 PM

I don’t support the Fair Tax then, I support a national sales tax similar to what we have up here in Washington State that doesn’t require any interaction with the government on my part.

FloatingRock on June 13, 2013 at 1:34 PM

If they change the Fair Tax to be more like what we have in Washington State then I’ll support it.

FloatingRock on June 13, 2013 at 1:36 PM

I think these organizations should get the big retailers where the LIVs shop (Walmart, K-Mart, Target) to start printing on receipts the amount the customer paid to cover the company’s income taxes and regulatory compliance costs.

This would achieve two things:

1) Give the LIVs pause to think about what it means when they vote for people who want to tax and regulate those big, evil corporations.

2) Soften the ground for the Fair Tax, since it lets people know they’re already paying it.

Odysseus on June 13, 2013 at 10:56 AM

The LIV’s won’t read the receipt to see that info to begin with. They already get phone bills and more that detail the crazy taxes included in what they’re paying – hell, most non-LIV’s couldn’t begin to tell you how much they’re paying on that stuff, and they *care* already.

You want to soften the ground for tax reform, pass something to eliminate tax withholding from people’s paychecks now, and require them to send in a check to the IRS monthly for their taxes, just like they do every other bill. *That* will get people’s attention as to how much they’re paying.

Midas on June 13, 2013 at 1:41 PM

‘pre-bate’? Seriously?

ffs, I thought we wanted the government *out* of the equation.

Midas on June 13, 2013 at 1:43 PM

If they change the Fair Tax to be more like what we have in Washington State then I’ll support it.

FloatingRock on June 13, 2013 at 1:36 PM

So you support increased taxed on lower and middle classes?

btw, I have no problem with a Flat Tax either. I think people care more about something that they are invested in and for those who pay little or no taxes, I think they are apathetic for this reason.

SpudmanWP on June 13, 2013 at 1:46 PM

EVERYBODY gets a prebate based on number of dependents, NOT based on income. It’s the amount of tax money that would be collected on expenditures funded by an amount up to the poverty line. So, say the government put the poverty line at $2000 per month, you would have in the prebate enough money to pay the sales tax on $2000 per month. This is regardless if you make $0 income or $1B income.

The government would have no reason to know how much income you make.

NOMOBO on June 13, 2013 at 1:28 PM

Seems rather inefficient, but I see the point. Not the best but better than what we got. Of course the problem is that the cost of living in the US is not flat. Your $2,000 would go much farther in WV than NYC.

The designers of the Fair Tax were trying to assuage the fears of people who object to a Flat Tax on the basis that it would collect a large amount of tax from the lower and middle class. Exempting food from taxation in a Flat [sales] Tax systems would not help much as food is a relatively small portion of your monthly goods purchases.

SpudmanWP on June 13, 2013 at 1:30 PM

If you have the staples (food, shelter, clothing, hygiene products) what more do you need? Personally, I would rather their be a government store that distributes low-quality staples instead. Anything else consumed anywhere else should be taxed equally.

Pattosensei on June 13, 2013 at 1:49 PM

So you support increased taxed on lower and middle classes?

btw, I have no problem with a Flat Tax either. I think people care more about something that they are invested in and for those who pay little or no taxes, I think they are apathetic for this reason.

SpudmanWP on June 13, 2013 at 1:46 PM

I support equal treatment under the law. I support that in a free country everyone is subject to the same laws and the same taxes, like we have up here in Washington State and it works great. I also don’t support the Flat Tax because it still requires a government entity with gestapo-like powers monitor to monitor and control everyone’s private affairs.

Neither the Flat Tax or the Fair Tax gets the government out of our private lives where it doesn’t belong. I think they were both probably designed by elites who don’t like our present tax regime but still want to control us all from Washington DC.

FloatingRock on June 13, 2013 at 1:57 PM

The Washington State tax regime, along with Tim Eyman’s restrictions, are vastly superior and more consistent with American values than either the Fair or Flat Tax.

FloatingRock on June 13, 2013 at 2:00 PM

So a Flat Sales Tax rather than a Flat Income Tax.

Again, I’m fine with this for the above reasons I stated.

SpudmanWP on June 13, 2013 at 2:03 PM

Pre-bate amounts are the same regardless of your income. No one will pay tax for purchases made with income below the poverty level, whatever that is set as. The IRS will have no reason to know how much money you make.

NOMOBO on June 13, 2013 at 11:45 AM

If they don’t know how much you make, how do they know you make more than the poverty level?

alwaysfiredup on June 13, 2013 at 2:13 PM

Pre-bate amounts are the same regardless of your income. No one will pay tax for purchases made with income below the poverty level, whatever that is set as. The IRS will have no reason to know how much money you make.

NOMOBO on June 13, 2013 at 11:45 AM

And accustoming everybody to monthly bennie checks from the government seems like a great way to breed dependency.

alwaysfiredup on June 13, 2013 at 2:16 PM

So you support increased taxed on lower and middle classes?

SpudmanWP on June 13, 2013 at 1:46 PM

Yes. They are not presently paying their fair share.

The question is how much they should pay and whether the new system sets that too high, too low or about right.

alwaysfiredup on June 13, 2013 at 2:17 PM

If they don’t know how much you make, how do they know you make more than the poverty level?

alwaysfiredup on June 13, 2013 at 2:13 PM

IT DOES NOT MATTER WHAT YOUR INCOME IS, YOU GET THE SAME AMOUNT FOR THE PRE-BATE EACH AND EVERY MONTH! How many ways do I need to say this? So maybe if I put it in all caps you will understand better. The poverty line that the government sets only determines how much pre-bate EVERYONE receives, regardless of income.

The government will not need to know how much your income is, because they will not be taxing income they will be taxing outgo. They will not even need to know how much you spend because you will simply be paying the tax at each purchase.

NOMOBO on June 13, 2013 at 2:30 PM

And accustoming everybody to monthly bennie checks from the government seems like a great way to breed dependency.

alwaysfiredup on June 13, 2013 at 2:16 PM

It is NOT a “bennie” check. It is more like an upfront refund for taxes paid.

NOMOBO on June 13, 2013 at 2:32 PM

The Poverty calculations would most likely use other data like from the Census.

SpudmanWP on June 13, 2013 at 2:43 PM

However, the payoff would be that the federal government would no longer need to know all of your income and financial transactions

Yeah, I think that is not correct.

The payoff would be that the IRS would require a comprehensive list of everything you own, accurately updated on an annual basis. So that they can audit your possessions to determine if you have failed to pay your fair share.

I would rather have an income tax than that.

Troll Feeder on June 13, 2013 at 3:01 PM

Troll Feeder on June 13, 2013 at 3:01 PM

Pay attention! Under the Fair Tax individual taxpayers will have NO contact with the IRS, and the IRS will have no contact with individual taxpayers. It makes NO difference what you own, you have paid taxes at the point of purchase. If you haven’t paid at the point of purchase it’s not your problem–it’s the seller’s problem for not collecting the sales tax

This, in practice, will be no different than a seller collecting State Sales Taxes. Does your State Franchise Tax Board require a comprehensive list of everything you own? Of course not, but they do perform equalization audits on sellers occasionally.

Sellers will be more apt to comply because they actually get a cut of the taxes that they collect to pay them for the trouble of collecting. It will not be worth their while to cheat, the penalty:benefit ration will be way too high.

Thanks for playing. Try again soon.

NOMOBO on June 13, 2013 at 3:19 PM

The payoff would be that the IRS would require a comprehensive list of everything you own, accurately updated on an annual basis. So that they can audit your possessions to determine if you have failed to pay your fair share.

Troll Feeder on June 13, 2013 at 3:01 PM

No basis in reality as state sales tax does not work this way and they would be managing the program in each state.

SpudmanWP on June 13, 2013 at 3:19 PM

Ugh, not more pushes for a sales tax. Sales tax is worse than income tax. Think about it: For income tax I could tell you exactly how much I paid last year for both Federal and State. I can’t give more than a vague guesstimate as to what I paid in State sales tax. Sales tax is nothing but a way to fleece tax payers more by constantly taking small amounts invisibly so they don’t know to complain.

What I’d much rather see is the individual income tax repealed and replaced with an equivalent income tax on State revenues. This would have the following benefits:
-IRS would only need to be big enough to handle 50 taxees.
-Eliminate federal filing expenses for individuals and companies
-Reduce the amount of information the government collects on everybody.
-Most of the compliance infrastructure is already built
-Revenue streams from the taxation will be more predictable
-Individuals and corporations will have a better idea of what the total cost of government is when they are paying a combined bill
-It will be a first step in reversing the loss of state power caused by the 17th amendment. This will be necessary if we are to ever reduce federal power.

For those who live outside of a state (eg, ex-pats), they would have to either be subject to taxation from their prior state or declare themselves citizens of a state.

StargazerA5 on June 13, 2013 at 3:57 PM

That plan would require the states to increase revenues by raising income or sales tax. You just traded one master for another.

SpudmanWP on June 13, 2013 at 4:00 PM

StargazerA5 on June 13, 2013 at 3:57 PM

So, conceivably, each state will have to collect several times more tax revenue than they do now. Most states collect tax on income, sales, and property. Are you suggesting that it just become a system in which states become the federal income tax collectors, so I would send my federal taxes to the state? I don’t see where this would be an advantage.

NOMOBO on June 13, 2013 at 4:08 PM

There are lots of problems with taxing the States directly.

1. A corporation that moves it’s HQ to a state that does not have any Income tax but has a sales tax. The corp could buy items from states that have no sales tax in order to avoid all taxes entirely.

2. What happens with Internet sales?

3. Due to vast increases in already high-tax areas, lots of people will move thereby reducing the overall Federal revenues.

SpudmanWP on June 13, 2013 at 4:29 PM

SpudmanWP: You already pay taxes to states, so they are already ‘your master’ by your definition. By this you have one fewer masters. In addition, if the burden becomes too onerous, you can change states fairly easily. Changing the federal government that is your ‘master’ currently is much harder.

As for corporations moving, high tax states are struggling with that already. I agree this would exasperate the problem, but that may also force them to address the issues already existing in their tax code.

As for individuals moving, that’s happening already. Fundamentally though, that would boost the revenues of the lower tax rate states as they would have more people (eg. more people=more demand for housing=higher property values=higher real estate tax revenues.) As the lower tax rate states had increased revenues, the Federal government taxing this added revenue would increase it’s revenue to compensate for what was lost from the high tax state.

I’m very opposed to taxing internet sales (I dislike sales taxes in general), but this plan would probably force a standard to be applied that would allow cross-state taxing. On the other hand, I’ve come to the unpleasant conclusion that fighting this is a losing battle at this point. Therefore I don’t see that as a major penalty for this.

NOMOBO: Your state taxes would be higher, yes. Tax money has to be collected regardless of who is collecting it. On the other hand, you would only have to follow one set of tax rules, your state’s, instead of both your state’s and the federal government’s. The advantage is significantly reduced compliance costs. Even with a federal sales tax, you have the compliance cost of having to estimate the tax (or in some cases both federal and state sales taxes) and determine if you can afford the total price as most times the sales tax is not included in the sticker price.

StargazerA5 on June 13, 2013 at 6:40 PM

I also don’t see how a flat tax would drastically reduce the size of the IRS…you still have many of the same issues regarding deductions, credits, exemptions, etc. There would be less tax brackets, obviously, but I don’t know that the number of tax brackets explains the size of the IRS.

I will go further to say that the IRS, under the existing system, should be drastically reduced, but it isn’t so I have no faith that the flat tax would embolden politicians to drastically reduce the size of the IRS.

iwasbornwithit on June 13, 2013 at 11:21 AM

With a flat tax, there would be no deductions, no exemptions (other than the first $20K of income), no credits and no tax brackets. Everyone pays the same FLAT RATE on their income over the base amount – from whatever source.

Solaratov on June 13, 2013 at 8:01 PM

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