The New Tax Rebellion Has Begun

So, how have you benefitted from the 67,500 word document known as the U.S. Tax Code? Probably not at all. In fact, just having a job and living here in the U.S. means that it has touched you in multiple negative ways although you may not have realized it. Do you think that the prices you pay for goods and services are not artificially inflated by that tax code? If so, you think wrong.

But there is good news coming from middle America. People everywhere are starting to wake up to the fact that our tax code is destructive to everyday taxpayers while only being beneficial to Congress and a few wealthy people who have enough money to make Congress listen to them. That's why the current rebellion is underway. If you wish to become one of the rebels, just go to the following website:

On-Line Tax Revolt

Here is what Micheal Reagan has to say:

Tea Party patriots, FairTaxers, Flat Taxers, and most Americans of every political persuasion understand that the federal tax system fuels unchecked government spending, hides the cost of government from the American taxpayer and has become corrupted into indecipherability by Congressional profits and power. Citizens are coming together from across the political spectrum and across the nation to wake Washington up to the voice of the American people. Citizens are rejecting the idea that huge government borrowing and debt has been secured by pledging the future earnings of generations of Americans not yet born.

That is where Obama, Pelosi and Reid made their mistake and where charlatans like Jim Webb and Mark Warner exposed themselves for what they really are: Socialists who think nothing of stealing the futures of our children and grandchildren.

I do not recall one single person during the last election cycle who said that they wanted to pass along trillions of dollars worth of debt to succeeding generations. But somewhere in there, the Dems have convinced themselves that this is what they heard.

This November, we need to send a message back to D.C. that our children and granchildren are worht fighting for, and if Congress won't fight for them, then we will replace our Representatives and Senators with people who will.

You can access the complete article on-line here:

The Next American Tax Rebbellion Has Begun
Michael Reagan
TownHall.com
March 1, 2010

AFL-CIO And Dems Push For A New Tax

Is anyone actually surprised by this? It seems that the only thing the Dems know is tax, tax and tax again. They have not had an original idea since Franklin Delano Roosevelt's disastrous New Deal policies that caused the Great Depression to last longer than it should have.

Raising taxes never helped an economy. No nation has ever taxed itself into prosperity although many have taxed themselves into poverty.

Here is the new tax the Dems want to impose on America:

The AFL-CIO, one of the Democratic Party’s most powerful allies, would like to assess a small tax — about a tenth of a percent — on every stock transaction.

Nevermind that your money is already double and triple taxed. This simply adds another tax that reduces the amount of money you have to spend on your family. Somewhere along the line, the Democrats got the idea that the working American is a limitless ATM from which the government can withdraw money anytime it wants. But those of us living out here in reality know the truth. Every dollar the government takes is one less dollar the taxpayer has to buy food and clothing for their children or to put towards their own retirement.

What will the ultimate effect of this be?

The AFL-CIO and some allied Democrats would like to cut down on the overall level of trading, or at least give the U.S. government a piece of the action, which would likely tamp down trading.

That's it. Reduce the activity in the marketplace and then take money for people earned it and then give that money to someone who did not earn it.

Typical leftists.

You can access the complete article on-line here:

AFL-CIO, Dems Push New Wall Street Tax
Alexander Bolton
The Hill
August 30, 2009

Some FairTax Food For Thought

We all know what income tax is as most of us actually pay it. We also know the headaches it causes and how easily the IRS can abuse it's power when investigating and auditing private citizens. But where did this monstrosity come from?

In The Federalist #21, Alexander Hamilton argued for the Federal Government to have the power to levy taxes.

To the People of the State of New York: HAVING in the three last numbers taken a summary review of the principal circumstances and events which have depicted the genius and fate of other confederate governments, I shall now proceed in the enumeration of the most important of those defects which have hitherto disappointed our hopes from the system established among ourselves. To form a safe and satisfactory judgment of the proper remedy, it is absolutely necessary that we should be well acquainted with the extent and malignity of the disease. . . . There is no method of steering clear of this inconvenience, but by authorizing the national government to raise its own revenues in its own way. Imposts, excises, and, in general, all duties upon articles of consumption, may be compared to a fluid, which will, in time, find its level with the means of paying them. The amount to be contributed by each citizen will in a degree be at his own option, and can be regulated by an attention to his resources. The rich may be extravagant, the poor can be frugal; and private oppression may always be avoided by a judicious selection of objects proper for such impositions. If inequalities should arise in some States from duties on particular objects, these will, in all probability, be counterbalanced by proportional inequalities in other States, from the duties on other objects. In the course of time and things, an equilibrium, as far as it is attainable in so complicated a subject, will be established everywhere. Or, if inequalities should still exist, they would neither be so great in their degree, so uniform in their operation, nor so odious in their appearance, as those which would necessarily spring from quotas, upon any scale that can possibly be devised. It is a signal advantage of taxes on articles of consumption, that they contain in their own nature a security against excess. They prescribe their own limit; which cannot be exceeded without defeating the end proposed, that is, an extension of the revenue.

But, neither Mr. Hamilton nor any of the Founding Fathers ever imagined the beast that would be created a little more than a century later.

Origins of the Income Tax The federal income tax was established in 1913. It actually required an amendment to the United States Constitution to make it legal. Why? Our Founding Fathers believed that taxing individuals on their private income was economic folly. They were right. The absence of an income tax, a tax on productivity, allowed our economy to grow and individuals to prosper for 124 years. The original income tax legislation affected only individuals earning $4,000 or more per year, at a time when the overwhelming majority of Americans earned far less. The 16th Amendment was eventually ratified and added to the Constitution, and a national income tax was born. That 16th Amendment was simply worded, the tax return consisted of only one page, and the entire tax code itself consisted of only 14 pages. No one could have imagined the vast impact it would have on the lives of their children, grandchildren, and future generations of Americans. Since then, the federal income tax system has become so complex that it requires tens of millions of Americans to seek professional help to comply with it, not to mention the enormous, expensive federal bureaucracy required to enforce and administer the tax. The Internal Revenue Service employs more investigative agents than the FBI and the CIA combined, and with 144,000 employees, employs more people than all but the 36 largest corporations in the United States. In addition to the $10 billion needed to operate the IRS, at least $265 billion (that is $900 for every man, woman, and child in this country) must be added to account for the cost of complying with the tax code. Massive amounts of our national wealth are consumed merely by measuring, tracking, sheltering, documenting, and filing our annual income.

There have been many efforts at tax reform over the past twenty years, but all of them failed to produce the desired results. Here are three end-goals that any tax reform plan must have in order to be viable:

1) The plan must remove from the IRS any power to intrude on the private lives of American citizens.
2) The plan must remove from the K Street lobbyists any power to influence Congressional votes.
3) The plan must not allow hidden taxes to be passed along to the consumer at any time.

There is only one tax reform plan that addresses all three of these end-goals:

THE FAIR TAX

What is the FairTax plan? The FairTax 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 replacement, and, through companion legislation, the repeal of the 16th Amendment. This nonpartisan legislation (HR 25/S 1025) 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. The IRS is disbanded and defunded. The FairTax taxes us only on what we choose to spend on new goods or services, not on what we earn. The FairTax is a fair, efficient, transparent, and intelligent solution to the frustration and inequity of our current tax system. Americans take home their whole paychecks. Not only do more Americans have jobs, but they also take home 100 percent of their paychecks (except where state income taxes apply). No federal income taxes or payroll taxes are withheld from paychecks, pensions, or Social Security checks. The prebate makes the FairTax progressive. To ensure no American pays tax on necessities, the FairTax Plan provides a prepaid, monthly rebate (prebate) for every registered household to cover the consumption tax spent on necessities up to the federal poverty level. This, along with several other features, is how the FairTax completely untaxes the poor, lowers the tax burden on most, while making the overall rate progressive. However, the FairTax is progressive based on lifestyle/spending choices, rather than simply punishing those taxpayers who are successful. Do you see how much freer life is with the FairTax instead of the income tax? No tax on used goods. The amount you pay to fund the government is totally visible. With the FairTax you are only taxed once on any good or service. If you choose to buy used goods − used car, used home, used appliances − you do not pay the FairTax. If, as a business owner or farmer, you buy something for strictly business purposes (not for personal consumption), you pay no consumption tax. The FairTax is charged just as state sales taxes are today. When you decide what to buy and how much to spend, you see exactly how much you are contributing to the government with each purchase. Retail prices no longer hide corporate taxes or their compliance costs, which drive up costs for those who can least afford to pay. Did you know that income taxes and the cost of complying with them currently make up 20 percent or more of all retail prices? It’s true. According to Dr. Dale Jorgenson of Harvard University, hidden income taxes are passed on to the consumer in the form of higher prices for everything you buy. If competition does not allow prices to rise, corporations lower labor costs, again hurting those who can least afford to lose their jobs. Finally, if prices are as high as competition allows and labor costs are as low as practical, profits/dividends to shareholders are driven down, thereby hurting retirement savings for moms-and-pops and pension funds invested in Corporate America. With the FairTax, the sham of corporate taxation ends, competition drives prices down, more people in America have jobs, and retirement/pension funds see improved performance. The income tax exports our jobs, rather than our products. The FairTax brings jobs home. Most importantly, the FairTax does not burden U.S. exports the way the current income tax system does. The FairTax removes the cost of corporate taxes and compliance costs from the cost of U.S. exports, putting U.S. exports on a level playing field with foreign competitors. Lower prices sharply increase demand for U.S. exports, thereby increasing job creation in U.S. manufacturing sectors. At home, imports are subject to the same FairTax rate as domestically produced goods. Not only does the FairTax put U.S. products sold here on the same tax footing as foreign imports, but the dramatic lowering of compliance costs in comparison to other countries’ value-added taxes also gives U.S. products a definitive pricing advantage which foreign tax systems cannot match. The FairTax strategy is revenue neutrality: Neither raise nor lower taxes so consumer costs remain stable. The FairTax pays for all current government operations, including Social Security and Medicare. Government revenues are more stable and predictable than with the federal income tax because consumption is a more constant revenue base than is income. If you were in a 23-percent income tax bracket, the federal government would take $23 out of your paycheck for every $100 you made. With the FairTax, if the federal government gets $23 out of every $100 spent in America, the same total revenue is delivered to the federal government. This is revenue neutrality. So, instead of paycheck-earning Americans paying 7.65 percent of their paychecks in Social Security/Medicare payroll taxes, plus an average of 18 percent of their paychecks in federal income tax, for a total of about 25.65 percent, consumers in America pay only $23 out of every $100. Or about 30 percent at the cash register when they elect to spend on new goods or services for their own personal consumption. And this tax is collected only on spending above the federal poverty level, providing important progressivity. Tax criminals don’t make criminals out of honest taxpayers. Today, the IRS will admit to 16 percent noncompliance with the code. FairTax.org will be generous and simply take the position that this is likely a conservative estimate of the underground economy. However, this does not take into account the criminal/drug/porn economy, which equally conservative estimates put at one trillion dollars of untaxed activity. The FairTax does tax this -- criminals love to flash that cash at retail -- while continuing to provide the federal penalties so effective in bringing such miscreants to justice. The substantial decrease in points of compliance -- from every wage earner, investor, and retiree, down to only retailers -- also allows enforcement to concentrate on following the money to criminal activity, rather than making potential criminals out of every taxpayer struggling to decipher the current code.

Can you decipher the current code? Find out! The following link goes to the Table of Contents of our current tax code (26 USC). Not the full code, just the Table of Contents:

Internal Revenue Code (26 USC) (Warning! If you are on a 56k modem, it would not be a good idea to click this link unless you plan on waiting a while just to view this Table of Contents!)

That's some list, is it not? 9,833 sections long! You could read the novel War And Peace by Leo Tolstoy before getting through 26 USC.

So, what should we do about it? There really is only one answer. Scrap the entire system and rebuild it from the ground up. I support the FairTax to replace our current tax system. You can get additional information, including research papers prepared by economists from the nation's leading colleges and universities, by visiting the following website:

Americans For Fair Taxation

Another Response To John Bowyer's Misinformed Criticism Of The FairTax

Looks like lots of people read John Bowyer's January 9, 2008 column where he sarcastically questions the FairTax. Over at TownHall, William Phelps has a response to Bowyer's questions. Here are some of the more pertinent ones:

Q: Are sales taxes, where they area currently in operation, simple and free from special interest lobbying? Since there are no exemptions and no tax shelters under the fair tax, there would be no work for the tax lobbyists in Washington who currently manipulate the income tax for the special interests. Because the fair tax includes the prebate reimbursing on the necessities of life, there is no need for exemptions. Fair tax is not based on any existing system, but was developed based on original research by leading institutions and economists on the charge to develop of the best tax system for the federal government.

Since the tax applies uniformly to all new goods and services a tax lobbyist would have to get Congress to consent to changing the tax on one single commodity, say lumber. However, in order to make up the shortfall, Congress would have to raise the tax on a comparable commodity, say plumbing supplies. Such a manipulation of the tax code could not be hidden and would immediately be seen by consumers (as the FairTax applies at the retail level where consumers pay the bill) and Congress would face major negative publicity as a result, not just from constituents, but from business leaders of other industries. That would be incredibly bad for re-election prospects.

Q: Isn't it that the rate is not really 23% but 30% at least, because it's tax inclusive? Bowyer doesn't understand that inclusive and exclusive ways of computing rates don't change the dollar amount of the tax. Either way the tax is the same $23 per $100. Computed the same inclusive way as the income tax, the fair tax is $100 -$23 = $77. Computed the exclusive way it is $23 divided by $77. =30%. If you computed the income tax on the exclusive basis, the 25% bracket would be the 33% bracket, or $25 divided by $75 =33%. Either way it is the same $25 tax per $100.

This just shows how desperate opponents of the FairTax are to find a flaw in the system. They parse words and play with numbers to make people think the FairTax is more than it really is. But as Phelps notes, it does not matter what rate you believe in, in real numbers, the tax on a $100 purchase will always be $23.

Q. How do we determine interest rate portion of the mortgage? Just as now, the market rate is the interest rate, but market interest rates will fall to the level of tax free bonds today which will make it easier for home buyers who will be paying the purchase price in pretax dollars, rather than after tax dollars under the income tax. The borrower and lender will continue to state the interest rates in the debt instruments, but this is irrelevant to how the home would be taxed. The fair tax applies to the purchase price of the home, if it is new.

This last question (as well as the question about used goods being taxed) is why I firmly believe that Bowyer never even read the FairTax Plan. Had he done so, these questions would have seemed stupid to him.

You can access the complete column on-line here:

A Fair Defense For The Fair Tax
William Phelps
TownHall.com
January 28, 2008

Herman Cain Supports The FairTax

Despite naysyers like Bruce Bartlett and Jerry Bowyer and others who throw uninformed criticism at the FairTax, the FairTax movement is growing. One day, the FairTax will be a reality and the United States will undergo a major economic boom as a result, regardless of how loudly people like Barlett and Bowyers yell or how many times they stamp their feet in protest.

The FairTax, unlike any other proposed tax reform plan, would address three end-goals:

1) The plan must remove from the IRS any power to intrude on the private lives of American citizens.
2) The plan must remove from the K Street lobbyists any power to influence Congressional votes.
3) The plan must not allow hidden taxes to be passed along to the consumer at any time.

Curiously, whenever anyone criticizes the FairTax and then is asked how these three end-goals are to be achieved through any other tax reform plan, they quickly become quiet, almost as if they are embarrassed for not having an answer.

In his January 17, 2008 column, Herman Cain looks at the FairTax movement with regards to the 2008 Presidential Primary:

Immediately after the Iowa Straw Poll last August, the noted and respected journalist George Will referred to the FairTax believers who supported Mike Huckabee as “those FairTax people.” He made it sound as if the people who helped Huckabee finish an unexpected second place among Republican presidential contenders were politically challenged, unfit to associate with the political elites. Jay Bookman, a columnist with the Atlanta Journal-Constitution, referred to the FairTax believers in his editorial on Dec. 23, 2007, as a “cult.” He called it “Huckabee’s Fantasy FairTax” as Huckabee was surging in the unreliable presidential polls leading up to the Iowa caucuses held on January 3.

And yet, neither Will nor Bookman has come up with an alternative proposal that addresses the three end-goals stated above.

Cain continues:

Because of George Will’s history of writing thoughtful and credible opinion articles, I am willing to give him the benefit of the doubt that his comment was just a slip of the tongue. This may have been motivated by his acquired skepticism of any dramatic changes being possible in the halls of Congress. Personally, I hope this was indeed the case, because I would miss George’s political insight if he were forced to take a Don Imus-like sabbatical. On the other hand, Bookman clearly displayed his ability for misinformation and factual inaccuracies, too many to spend valuable time and space refuting. Anyone familiar with the facts of the FairTax can peruse his attempted assassination of the FairTax for himself. One would also note that pure media bias could hardly be an excuse. If Huckabee’s success continues, the greater the attempts will be to derail him by the liberal opposition, the Republican establishment and, naturally, his Republican presidential rivals. The FairTax is the biggest cure for our tax code insanity on the political table. Mike Huckabee’s courageous embrace of the idea has heightened interest in it by many, and attracted contempt against it by many more. Since death to the FairTax has not been achieved swiftly by skepticism, denial or distortion, then we can expect repeated attempts to kill the FairTax by a thousand cuts. Fortunately, there are millions of believers in the FairTax, and they have been around much longer than the current presidential race. It is a legitimate movement in this country that is based on solid economics and analysis. The real cult consists of people who are skeptical of dramatic changes, and those who are content with allowing this country to drift into economic mediocrity.

No matter what you think about Mike Huckabee or his personal choices in life, he has brought the FairTax to national prominence. It may not be such a big player in this election, but in 2012, after millions more people have had the chance to read the real FairTax Plan rather than someone's misinformed criticism, the FairTax will loom large in the campaign.

You can access the complete column on-line here:

The Attempted Assassination Of The FairTax
Herman Cain
NorthStar Writers' Group via FairTax.org
January 17, 2008

Also, Professor Laurence J. Kotlikoff, Professor of Economics at Boston University, has this rebuttal to Bruce Bartlett's criticism of the FairTax:

Why the Fair Tax Will Work
Laurence J. Kotlikoff
FairTax.org
January 15, 2008

And here is a rebuttal to Jerry Bowyer's column criticizing the FairTax. It should be noted that had Mr. Bowyer actually read the FairTax Plan before commenting on it, he would have found the answers to the very questions he posed with such sarcasm.

The FairTax Crowd Answers Jerry Bowyer
Louis R. Woodhill
FairTax.org
January 14, 2008


Americans For Fair Taxation

A Hidden Tax On New Cars, NY Times Lies About Veterans And Great Britain Is "Mostly Free"

Remember the Energy Bill that Congress recently passed? Well, what is it going to achieve and what will it cost us? Will is even achieve its own stated goals of higher fuel efficieny standards and lower emissions? Not according to Investor's Business Daily:

The new energy law contains stiff new fuel-efficiency standards for U.S. automakers. But make no mistake: What you got from Congress was a big tax hike. Just ask General Motors Vice Chairman Bob Lutz. That's right. The CAFE standards embedded in the Energy Independence Act require fuel efficiency to jump to a fleet average 35 miles a gallon in 2020 from about 25 mpg now. That means you will soon be paying more — a lot more — to buy a car. Maybe this sounds reasonable. To many, these new rules are long overdue. They'll help us cut our reliance on foreign oil, they say, while reducing global warming. Who could disagree with such noble goals? The only problem is, based on what we know now, it'll cost automakers some $85 billion to comply. When all costs are factored in, other estimates put the total cost at about $18 billion a year. Fine, say the populist politicians. Stick it to the automakers. But do they really think Ford and GM will pick up the tab? Of course not. It'll be you, as GM's Lutz made clear in comments Sunday.

Absolutely correct. It will be the consumer who will have to pay the higher prices. And remember that higher prices always have a ripple effect throughout the economy. Higher prices on one commodity lead to higher prices on others. If transportation costs go up, so do the prices of transporting things like food which in turn drives food prices up.

The article goes on:

New fuel-efficiency standards are supposed to clean up the air by encouraging people to drive cleaner cars, saving four million barrels of imported oil a day. This, too, sounds great. But like so many things that sound good in theory, it suffers when translated into reality. In fact, the higher prices of cars will encourage consumers to keep their older, dirtier but cheaper vehicles for much longer. So the actual benefits will be less than forecast. History bears this out. In 1970, just before the first CAFE standards were imposed, the average car on the road was about 5 1/2 years old. By 2000, the average car was 9 years old — thanks to the higher costs of buying and operating new cars, a direct result of higher fuel efficiency and safety standards. That's not the only negative impact. One way manufacturers can more easily meet the tough new standards is by making smaller cars. That's why cars in Europe — cited by many fuel-efficiency proponents as a model for the U.S. — are so tiny. Smaller cars are cute and oh-so-European, we agree. But they're also quite dangerous. That's why cars are so big and heavy today: They have lots of safety equipment and padding that makes them much safer than the econo-boxes of the 1980s.

Of course, no one in the Democrat majority of Congress thought about any of this when they were voting to "stick it" to the automakers, but we've come to expect that from a party that embraces failed left-wing socialist policies.

Finally:

So this is what Congress in all its wisdom has brought us: A 21% tax hike on cars, coupled with an official policy that could kill as many Americans in one year as have been killed so far in five years of the Iraq War. Some energy policy. Yet on the stump, Hillary Clinton, Barack Obama and John McCain have all supported the new standards. In doing so, they punish a relatively small group of Americans — new-car drivers, auto industry workers and auto-industry shareholders — to benefit the rest of us. This is unfair. It's also bad economics, which is a typical outcome of congressional meddling. Through shortsighted, feel-good policies and excessive regulation, our government continues to drive up the prices of many things — oil, food, cars and homes among them. Then it blames others — stupid consumers, greedy businesses, shady foreign operators — for the bad results. It's time for some truth. The new CAFE standards, as Lutz suggests, amount to a tax — a rather narrow and inefficient one that will neither reduce our reliance on foreign oil nor curb global warming. It will, however, make us a lot less safe and well-off.

Another Central Planning Policy that will do nothing but make life hard on the average American while Congress enjoys lavish junkets and vacations at our expense.

You can access the complete article on-line here:

The Tax They Didn't Tell You About
Investor's Business Daily
January 14, 2008

---

The "Old Gray Lady" must be getting senile and hoping that the average reader is suffering from dementia as well, or at least a short memory. The New York Post exposes the Times for some shoddy journalism and blatent lies about America's military veterans:

Memo to New York Times Public Ed itor Clark Hoyt: Your urgent atten tion is needed on the slanderous 7,000-word front-page article published last Sunday about homicides allegedly committed by US veterans of the Iraq and Afghanistan campaigns. ... As our colleague Ralph Peters so adroitly demonstrated on these pages Tuesday, the article embraced the hoariest of overwrought clichés - the US combat vet as psychotic killer. But on what evidence? None at all. ... The article, said to be the first of several, reports that there have been 121 homicides involving active-duty or recently discharged Iraq/Afghan combat veterans.

But there is one problem. The author's of the Times article didn't really do any research nor did they crunch the numbers or do a proper analysis. Fortunately, the New York Post did:

As Peters noted, "to match the homicide rate of their [nonmilitary] peers, our troops would've had to come home and commit about 150 murders a year, for a total of 700 to 750 murders between 2003 and the end of 2007" - six times the number the Times cited. That estimate is borne out by University of Pennsylvania political scientist John DiIulio, who notes on the Weekly Standard's Web site that 749,932 veterans of Iraq and Afghanistan had been discharged by the end of 2007. Apply that to the 121 killings cited by the Times, and the homicide rate works out to 16.1 per 100,000 - over the entire six-year period. By way of imperfect comparison, the US Bureau of Justice Statistics' most recent numbers demonstrate that the same rate among males ages 18-24 was 26.5 - 65 percent higher - for a single year, 2005. It's not necessary to extrapolate that stat to understand that the Times has slandered some fine young Americans. For none of those numbers appeared among the 7,000 words the paper published. Which means that the numbingly long piece, while loaded with affecting details, contained nothing that would place these cases in any sort of meaningful context.

But then, what did you really expect from a rag that exposes classified programs so that the terrorists can learn what governments like the United States are doing to protect their citizens?

You can access the complete article on-line here:

The Killer Vet Lie
New York Post
January 17, 2008

---

And the Telegraph has an interesting piece about the high-tax policies of the British Government. It appears as though Great Britain is sliding down the ranks from a "free economy" to "mostly free economy." (Is that anything like Earth going from "harmless" to "mostly harmless?" according to the Encyclopaedia Galactica?)

Anyway, Ambrose Evans-Pritchard has this to say:

Britain has slipped out of the ranks of fully "free" countries in this year's Heritage Index of Economic Freedom, reflecting the sharp rise in the tax burden and ballooning state sector. ... The country has continued to slide down the league under Gordon Brown's economic management, falling from fifth to tenth place over the last two years. It has been overtaken by Canada, Chile, Switzerland, Australia, and the United States. Britain now scores below 80 points on a range of key indicators, dropping into the "mostly free" camp with Germany, Japan, Bahrain, Armenia and Trinidad. Two eurozone shockers are Italy (64), and Greece (80), now ranked lowered than most of the old Communist bloc. The ever harsher verdict on Britain comes as Mr Brown's tax and spend policies begin to reshape the basic structure of the UK plc, transforming it from one of Europe's leanest fiscal states to one of the most bloated. "Total government expenditures, including consumption and transfer payments, are very high. Government spending has been rising since the 1990s and in the most recent year equaled 44.7 percent of GDP," said the UK country report.

The Heritage Index defines economic freedom as "the absence of constraint on the production, distribution or consumption of goods and services beyond the extent necessary for citizens to protect and maintain liberty itself".

Many European states, most notably Germany, have been trimming down the government's involvement in private sector economy. Great Britain has been increasing it and now it is beginning to hurt.

No nation has ever taxed itself into prosperity, but many have taxed themselves into poverty. Einstein once remarked that the definition of insanity is doing the same thing over and over while expecting adifferent result. Levying high taxes on the means of production, even though leftists claim it is a good thing, has only led to economic slow-down. So, why do leftists continue to push for high taxes thinking it will help and economy grow?

You don't need to be Einstein to figure that one out.

You can access the complete article on-line here:

High-Tax Britain Booted From Club Of 'Free' Economies
Ambrose Evans-Pritchard, International Business Editor
The Telegraph
January 16, 2008

---

And this is why we don't trust polls:

Some FairTax Food For Thought

We all know what income tax is as most of us actually pay it. We also know the headaches it causes and how easily the IRS can abuse it's power when investigating and auditing private citizens. But where did this monstrosity come from?

In The Federalist #21, Alexander Hamilton argued for the Federal Government to have the power to levy taxes.

To the People of the State of New York:

HAVING in the three last numbers taken a summary review of the principal circumstances and events which have depicted the genius and fate of other confederate governments, I shall now proceed in the enumeration of the most important of those defects which have hitherto disappointed our hopes from the system established among ourselves. To form a safe and satisfactory judgment of the proper remedy, it is absolutely necessary that we should be well acquainted with the extent and malignity of the disease.

. . . There is no method of steering clear of this inconvenience, but by authorizing the national government to raise its own revenues in its own way. Imposts, excises, and, in general, all duties upon articles of consumption, may be compared to a fluid, which will, in time, find its level with the means of paying them. The amount to be contributed by each citizen will in a degree be at his own option, and can be regulated by an attention to his resources. The rich may be extravagant, the poor can be frugal; and private oppression may always be avoided by a judicious selection of objects proper for such impositions. If inequalities should arise in some States from duties on particular objects, these will, in all probability, be counterbalanced by proportional inequalities in other States, from the duties on other objects. In the course of time and things, an equilibrium, as far as it is attainable in so complicated a subject, will be established everywhere. Or, if inequalities should still exist, they would neither be so great in their degree, so uniform in their operation, nor so odious in their appearance, as those which would necessarily spring from quotas, upon any scale that can possibly be devised.

It is a signal advantage of taxes on articles of consumption, that they contain in their own nature a security against excess. They prescribe their own limit; which cannot be exceeded without defeating the end proposed, that is, an extension of the revenue.

But, neither Mr. Hamilton nor any of the Founding Fathers ever imagined the beast that would be created a little more than a century later.

Origins of the Income Tax

The federal income tax was established in 1913. It actually required an amendment to the United States Constitution to make it legal. Why? Our Founding Fathers believed that taxing individuals on their private income was economic folly. They were right. The absence of an income tax, a tax on productivity, allowed our economy to grow and individuals to prosper for 124 years.

The original income tax legislation affected only individuals earning $4,000 or more per year, at a time when the overwhelming majority of Americans earned far less. The 16th Amendment was eventually ratified and added to the Constitution, and a national income tax was born.

That 16th Amendment was simply worded, the tax return consisted of only one page, and the entire tax code itself consisted of only 14 pages. No one could have imagined the vast impact it would have on the lives of their children, grandchildren, and future generations of Americans.

Since then, the federal income tax system has become so complex that it requires tens of millions of Americans to seek professional help to comply with it, not to mention the enormous, expensive federal bureaucracy required to enforce and administer the tax. The Internal Revenue Service employs more investigative agents than the FBI and the CIA combined, and with 144,000 employees, employs more people than all but the 36 largest corporations in the United States.

In addition to the $10 billion needed to operate the IRS, at least $265 billion (that is $900 for every man, woman, and child in this country) must be added to account for the cost of complying with the tax code. Massive amounts of our national wealth are consumed merely by measuring, tracking, sheltering, documenting, and filing our annual income.

There have been many efforts at tax reform over the past twenty years, but all of them failed to produce the desired results. Here are three end-goals that any tax reform plan must have in order to be viable:

1) The plan must remove from the IRS any power to intrude on the private lives of American citizens.
2) The plan must remove from the K Street lobbyists any power to influence Congressional votes.
3) The plan must not allow hidden taxes to be passed along to the consumer at any time.

There is only one tax reform plan that addresses all three of these end-goals:

THE FAIR TAX

What is the FairTax plan?

The FairTax 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 replacement, and, through companion legislation, the repeal of the 16th Amendment. This nonpartisan legislation (HR 25/S 1025) 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. The IRS is disbanded and defunded. The FairTax taxes us only on what we choose to spend on new goods or services, not on what we earn. The FairTax is a fair, efficient, transparent, and intelligent solution to the frustration and inequity of our current tax system.

Americans take home their whole paychecks.

Not only do more Americans have jobs, but they also take home 100 percent of their paychecks (except where state income taxes apply). No federal income taxes or payroll taxes are withheld from paychecks, pensions, or Social Security checks.

The prebate makes the FairTax progressive.

To ensure no American pays tax on necessities, the FairTax Plan provides a prepaid, monthly rebate (prebate) for every registered household to cover the consumption tax spent on necessities up to the federal poverty level. This, along with several other features, is how the FairTax completely untaxes the poor, lowers the tax burden on most, while making the overall rate progressive. However, the FairTax is progressive based on lifestyle/spending choices, rather than simply punishing those taxpayers who are successful. Do you see how much freer life is with the FairTax instead of the income tax?

No tax on used goods. The amount you pay to fund the government is totally visible.

With the FairTax you are only taxed once on any good or service. If you choose to buy used goods − used car, used home, used appliances − you do not pay the FairTax. If, as a business owner or farmer, you buy something for strictly business purposes (not for personal consumption), you pay no consumption tax. The FairTax is charged just as state sales taxes are today. When you decide what to buy and how much to spend, you see exactly how much you are contributing to the government with each purchase.

Retail prices no longer hide corporate taxes or their compliance costs, which drive up costs for those who can least afford to pay.

Did you know that income taxes and the cost of complying with them currently make up 20 percent or more of all retail prices? It’s true. According to Dr. Dale Jorgenson of Harvard University, hidden income taxes are passed on to the consumer in the form of higher prices for everything you buy. If competition does not allow prices to rise, corporations lower labor costs, again hurting those who can least afford to lose their jobs. Finally, if prices are as high as competition allows and labor costs are as low as practical, profits/dividends to shareholders are driven down, thereby hurting retirement savings for moms-and-pops and pension funds invested in Corporate America. With the FairTax, the sham of corporate taxation ends, competition drives prices down, more people in America have jobs, and retirement/pension funds see improved performance.

The income tax exports our jobs, rather than our products. The FairTax brings jobs home.

Most importantly, the FairTax does not burden U.S. exports the way the current income tax system does. The FairTax removes the cost of corporate taxes and compliance costs from the cost of U.S. exports, putting U.S. exports on a level playing field with foreign competitors. Lower prices sharply increase demand for U.S. exports, thereby increasing job creation in U.S. manufacturing sectors. At home, imports are subject to the same FairTax rate as domestically produced goods. Not only does the FairTax put U.S. products sold here on the same tax footing as foreign imports, but the dramatic lowering of compliance costs in comparison to other countries’ value-added taxes also gives U.S. products a definitive pricing advantage which foreign tax systems cannot match.

The FairTax strategy is revenue neutrality: Neither raise nor lower taxes so consumer costs remain stable.

The FairTax pays for all current government operations, including Social Security and Medicare. Government revenues are more stable and predictable than with the federal income tax because consumption is a more constant revenue base than is income.

If you were in a 23-percent income tax bracket, the federal government would take $23 out of your paycheck for every $100 you made. With the FairTax, if the federal government gets $23 out of every $100 spent in America, the same total revenue is delivered to the federal government. This is revenue neutrality. So, instead of paycheck-earning Americans paying 7.65 percent of their paychecks in Social Security/Medicare payroll taxes, plus an average of 18 percent of their paychecks in federal income tax, for a total of about 25.65 percent, consumers in America pay only $23 out of every $100. Or about 30 percent at the cash register when they elect to spend on new goods or services for their own personal consumption. And this tax is collected only on spending above the federal poverty level, providing important progressivity.

Tax criminals don’t make criminals out of honest taxpayers.

Today, the IRS will admit to 16 percent noncompliance with the code. FairTax.org will be generous and simply take the position that this is likely a conservative estimate of the underground economy. However, this does not take into account the criminal/drug/porn economy, which equally conservative estimates put at one trillion dollars of untaxed activity. The FairTax does tax this -- criminals love to flash that cash at retail -- while continuing to provide the federal penalties so effective in bringing such miscreants to justice. The substantial decrease in points of compliance -- from every wage earner, investor, and retiree, down to only retailers -- also allows enforcement to concentrate on following the money to criminal activity, rather than making potential criminals out of every taxpayer struggling to decipher the current code.

Can you decipher the current code? Find out! The following link goes to the Table of Contents of our current tax code (26 USC). Not the full code, just the Table of Contents:

Internal Revenue Code (26 USC) (Warning! If you are on a 56k modem, it would not be a good idea to click this link unless you plan on waiting a while just to view this Table of Contents!)

That's some list, is it not? 9,833 sections long! You could read the novel War And Peace by Leo Tolstoy before getting through 26 USC.

So, what should we do about it? There really is only one answer. Scrap the entire system and rebuild it from the ground up. I support the FairTax to replace our current tax system. You can get additional information, including research papers prepared by economists from the nation's leading colleges and universities, by visiting the following website:

Americans For Fair Taxation

Clinton, Buffet Renew Support For The Tax That Is Killing Family Owned Businesses

Here's more of that leftist socialist spew from Hillary Clinton. Note the idiotic things she says about the Death Tax:

At a joint appearance with billionaire investor Warren Buffett, Clinton said the inheritance tax, due to be temporarily repealed in 2010, was a symbol of "what kind of society we are." "The estate tax has been historically part of our very fundamental belief that we should have a meritocracy, that we do not want a system -- where we expect people to make it on their own -- to be, over time, dominated by inherited wealth," she said. "That we do believe that people should have to get out there and make their way, to a great extent."

I don't think any politician has ever been so detached from reality.

The Inheritance Tax does not make us a "meritocracy." In fact, it destroys the concept of advancement by merit and replaces it with the concept of advancement by being super-rich already.

Everyone thinks that Wal-Mart and other super-corporations are crowding out the Mom & Pop stores and family farms. Wrong. The Death Tax is killing them. Here's how:

Suppose a man started his own small business back in the 50's or 60's. He bought property and built up his trade over the years. He bought a house and some land and paid it off over time. When he originally purchased his property, it was a total value of, say $50,000.

Then he dies in 2007 leaving his business and property to his family survivors. Today the business and property is worth over $5,000,000. If the Death Tax was 45%, then his survivors would owe $2,250,000 in taxes as a result. If he left only $20,000 in his bank account, his survisors would have to come up with $2,230,000 to pay off the tax or the government would come in and take everything leaving them with nothing.

What is the family going to do to raise $2,230,000? They sell the business and the property thereby leaving a hole in the local market for Wal-Mart or some other corporation to come in and fill.

I can easily believe that Hillary Clinton is incapable of grasping this concept, but Warren Buffet? I guess he likes the idea of mega-corporations taking over the small businesses of America.

The Death Tax must be done away with entirely and any politician who calls for its revival should be tarred and feathered.

You can access the complete article on-line here:

Clinton, Buffett Denounce Income Gap
Scott Lindlaw
Associated Press via GOPUSA
December 12, 2007

Pelosi Proposal Would Send American Economy Into A Depression

Nancy Pelosi seems to be getting desperate. The general view that the American public has of the current Democrat controlled Congress is that it is a do-nothing legislature completely impotent in it's own world. Thus, she came up with H.R. 6, the Renewable Fuels, Consumer Protection, and Energy Efficiency Act of 2007. This bill is supposed to take us towards greater energy independence and less reliance on fossil fuels. Unfortunately for Ms. Pelosi, she does not understand economics nor does she have a grasp of history.

The National Taxpayers Union breaks down the problems with H.R. 6 here:

Huge Tax Increases -- The House previously passed $14 billion in vengeful tax hikes on so-called "Big Oil." Though billed as a way to move us toward energy independence, similar taxes in the past have simply reduced domestic oil production and increased oil imports. Congress ought not to repeat those mistakes. Renewable Fuels Standard -- Forcing Americans to consume 36 billion gallons of heavily-subsidized ethanol and other alternative fuels will serve to dramatically raise fuel prices, taxes, and food costs for everyone. Renewable Portfolio Standard -- Requiring that 15 percent of all electricity be produced by alternative sources will likewise raise utility bills, causing harm to those Americans who can least afford the additional expense. Higher Corporate Average Fuel Economy (CAFE) Standards -- Though raising CAFE standards may appear productive at first blush, ultimately this policy would have little effect on total fuel consumption while creating vehicles that are more expensive and less safe. Price Gouging Language -- There is no evidence that price gouging has taken place, even after disasters like Hurricane Katrina. Congress ought not to interfere with the delicate balance of energy markets.

These five items are all in H.R. 6. This bill needs to be defeated, or, if passed, vetoed.

You can access the original article on-line here:

An Open Letter to Congress: Taxes, Regulations, And Subsidies Are NOT The Answer For Energy Security!
National Taxpayers Union
December 3, 2007

How Massachusetts Supports The Troops And Unfair Criticism Of The Fair Tax

We've already seen a few instances where the government of Massachusetts has been cracking down on displays that support the troops fighting the War on Terror. It gets even worse now. Massachusetts is now trying to eliminate U.S. flags and other diplays along the highways. According to the Boston Globe:

The crackdown comes a year after the state's last attempt to regulate the overhead displays. At the time, under pressure from military families and their advocates, highway officials said signs would be allowed if positioned behind fences, but now they are saying even these must go. "When the soldiers or their families hear about this, they're going to be up in arms," said James Wareing, the leader of a military support group who assembled and maintains the display dedicated to Jimenez, whose family lives in Lawrence. "It has nothing to do with safety. . . . Nothing has ever happened in six years." ... "I was told I could do that and they gave me their word and that was it," said Linda Noone, 49, of Reading, who put up a series of flags on an Interstate 93 overpass near the Wilmington border in 2005, a year after the death of her father, a Korean War vet.

What will they do next?

You can access the complete article on-line here:

Overpass Flags, Troop Tributes To Be Removed
Noah Bierman
The Boston Globe
December 4, 2007

---

You know, when people criticize the Fair Tax, it would be a good idea if they actually read the plan before commenting on it. I showed earlier how Bruce Bartlett got his criticism wrong in this blog post:

Bruce Bartlett Gets It Wrong
84rules
August 29, 2007

Now Rich Lowry is commenting on a Tax Plan for which he has obviously not even read the plan. Here is what Lowry wrote in the New York Post:

To avoid the risk of getting both a national sales tax and an income tax, FairTaxers would have to repeal the 16th Amendment. Good luck: Huckabee's magic wand will come in handy. Then, there's the sales-tax rate. FairTaxers say that a 23 percent rate would be enough to replace current revenues. What they're really talking about is a tax of 30 cents on every dollar - what most people would call a 30 percent rate. The government would pay the tax on all its purchases, a gimmick "done solely to make revenues under the FairTax seem larger than they really are," notes economist Bruce Bartlett. Budget trickery aside, the congressional Joint Committee on Taxation has estimated that the rate would have to go as high as 57 percent.

I will simply repeat what I wrote about Bartlett's misguided comments:

"This is a total misrepresentation of how the Fair Tax works and hence my conclusion that he never really researched it or he is deliberately giving false information.

What Bruce forgot (or neglected) to say was that the Fair Tax first strips away all Federal taxes that go into the price of a new consumer good at the retail level. Currently, 22% of what you pay at the retail level is taxes that have been passed on from supplier to producer to distributor to retailer to you.

Thus, under the Fair Tax, an item that costs $1 under the current tax system would be reduced in price by 22% (i.e. all of the taxes passed on to the consumer), that is, its real cost would be $.78. It is at this point where the Fair Tax is levied. A 23% tax rate would take to price of that product up to $.99. But to keep it simple, round that back up to $1."

As for the part about repealing the 16th Amendment, if Lowry and Bartlett had actually read and fully comprehended HR 25, they would have both seen that the bill includes a provision for a national referendum on repealing the 16th Amendment. But apparently, people like Lowry and Bartlett just don't want the facts to get in their way.

Lowry, Bartlett, et. al. would be better served if they would inform themselves rather than just listening to the blather of others without bothering to check out the validity of the blather. In each case here, Lowry and Bartlett both rewrote the Fair Tax Plan and then criticized their own rewrites.

Isn't that how libs do their reporting?

You can access Lowry's misguided and erroneous criticisms on-line here:

Huck's Sales Tax Lunacy
Rich Lowry
New York Post
December 4, 2007