Publius-Huldah's Blog

Understanding the Constitution

The Plot to Impose a National Sales Tax or Value Added Tax

By Publius Huldah

A devilish plot is afoot to impose new national taxes on the American People. It is a masterful piece of trickery because the authorization for the new national taxes is buried within Compact for America’s version of a balanced budget amendment to the US Constitution.

Furthermore, the balanced budget amendment does nothing to control federal spending; and transforms our Constitution from one of limited and defined powers to one of general and unlimited powers. 1

Yet this monstrosity is pending in Michigan as SB 306 2 and in North Carolina as HB 366. 3 Legislators in four States, Alaska, Georgia, Mississippi and North Dakota, have already passed it.

Let’s look at Sections 1-6 of Compact for America’s balanced budget amendment:

It does Nothing to Control Federal Spending

Section 1 allows Congress to spend as much as they take from us in taxes and add to the national debt. That’s a good idea?

Sections 2 and 3 permit Congress to raise the debt whenever 26 States agree.  States are addicted to federal funds. Will 25 States agree not to take more federal funds?

Section 4 is a joke:  Who believes Congress will impeach a President for refusing to “impound” an appropriation made by Congress? Congress won’t even impeach a President for Treason.

How Authorization for the New Taxes is Hidden

Section 5 says:

“No bill that provides for a new or increased general revenue tax shall become law unless approved by a two-thirds roll call vote of the whole number of each House of Congress….” [italics mine]

What is a “general revenue tax”? Section 6 defines it:

“…’general revenue tax’ means any income tax, sales tax, or value-added tax levied by the government of the United States…” [italics mine]

Now go back to Section 5 and substitute the definition of “general revenue tax” for that term:

“No bill that provides for a new or increased income tax, sales tax, or value-added tax levied by the government of the United States shall become law unless approved by a two-thirds roll call vote of the whole number of each House of Congress….”

There it is: All that’s needed is approval of two-thirds of the members of each House and a new national sales tax and/or value added tax is imposed on us. And they can increase it, along with increasing the income tax, whenever they get two-thirds of the members to vote for it.

Section 5 also permits Congress to make laws to impose a new “end user sales tax” 4 which would replace the income tax – this “end user sales tax” is passed by a simple majority of both houses.

So! Compact for America’s balanced budget amendment provides two options to Congress:

· Two-thirds of the members of both Houses can impose a new sales tax and/or value-added tax in addition to the income tax; or

· A simple majority of both Houses can impose “a new end user sales tax” which replaces the income tax.

Which option will Congress choose?

Our Constitution Doesn’t Now Authorize a National Sales Tax or Value-added Tax

Article I, §8, clause 1 says:

“The Congress shall have Power to lay and collect Taxes, Duties, Imposts and Excises…”

Principles of Compact for America say this clause already authorizes a national sales tax or value added tax. Board Vice-President Chip DeMoss said on Feb. 12, 2014:

“a national sales tax would be an “impost” (defined as a tax or similar compulsory payment) that is authorized under Article I, Section 8, Clause 1…” [see comments and scroll down after comment 19 till you see Chip DeMoss’ name].

We may not properly use DeMoss’ redefinition of “impost”!

We must use the definition of “impost” our Framers used: The Federalist Papers say an “impost” is a tax or duty on imports. Type imposts in the search box [at the link] and the Papers discussing imposts will come up. See for yourself that an “impost” is a tax or duty on imports.

Webster’s 1828 Dictionary defines “impost” as:

“…Any tax or tribute imposed by authority; particularly, a duty or tax laid by government on goods imported, and paid or secured by the importer at the time of importation. Imposts are also called customs.”

Do you see?

National sales taxes and value-added taxes are also not “excise” taxes. Excise taxes are a tax on a unit of goods – such as the infamous whiskey excise tax of 1791 which led to the Whiskey Rebellion. 5 It imposed a flat tax per gallon. The tax was payable for domestic whiskey at the distillery (§17 of the Act) and the casks were numbered and marked to show the tax had been paid (§19 of the Act).

“Taxes” at Art. I, §8, clause 1 refers to the apportioned direct tax provided for at Art. I, §2, clause 3 of our Constitution.

Our Framers were specific about the kinds of taxes Congress is permitted to impose. Congress does not have the power to impose any kind of tax it wants. Our Framers limited Congress’ taxing power to:

· the apportioned direct taxes at Art. I, §2, clause 3;

· the duties or imposts on imports at Art. I, §8, clause 1; and

· the excises at Art. I, §8, clause 1.

A sales tax is none of the above. A sales tax is a percentage of the retail price of goods. A value-added tax is a “turbo-charged national sales tax on goods and services that is applied at each stage of production, not merely on retail transactions” and raises a “gusher of revenue for spendthrift governments worldwide”.

We have never had a national sales tax or value added tax in this Country. Why? Because they are not authorized by the Constitution.

We were manipulated into supporting the 16th Amendment. We were told the income tax would “soak the rich” – and the envious drooled at the prospect.

And so again today, statists are seeking to trick us into supporting a national sales tax or a value added tax: first, by concealing it within the verbiage of the bill; 6 and then, once the trickery was exposed, by claiming the Constitution already authorizes these new types of taxes.

There is a Better Way: Downsize the Federal Government!

Our Constitution limits federal spending to the enumerated powers. The list of objects on which Congress may lawfully spend money is a short list. See the list HERE.

Most of what the federal government does today is unconstitutional as outside the scope of the powers delegated by the Constitution. Let’s cut federal spending by downsizing the federal government to its enumerated powers and constitutional limits.

Endnotes:

1 Congress’ spending is limited by the enumerated powers: If an object is on the list of enumerated powers (e.g., the patent & copyright office authorized by Art. I, §8, cl. 8), Congress may lawfully spend money on it. That’s how our Constitution already controls federal spending.

All versions of a balanced budget amendment change the constitutional standard for spending FROM whether an object is on the list of enumerated powers TO a limit on total spending where Congress may spend money on whatever they or the President put in the budget. This is what transforms our Constitution FROM one of enumerated powers only TO one of general and unlimited powers. And that is the true purpose of a balanced budget amendment. It has nothing to do with limiting federal spending – the pretended spending limits are fictitious since they may be waived whenever the feds [and 26 of the States] want to waive them.

2 Leon Drolet’s article of July 10, 2015, and Sam Easter’s article of July 8, 2015, about SB 306 pending in Michigan don’t mention the new national taxes.

3 Matthew Burns’ article about the hearing on HB 366 before N. Carolina’s House Judiciary Committee (which passed HB 366) doesn’t mention the new national taxes. Burns quotes the Bill’s sponsor, Rep. Chris Millis, as saying the problem is “Washington is unwilling or unable to limit itself.” So the solution is to massively increase Congress’ taxing powers?

4 “End user sales tax” is not defined in the balanced budget amendment.

5 Apparently, the practice of tarring & feathering “revenuers” began with the Whiskey Excise Tax.

6 The trickery was exposed over a year ago HERE. Since then, Compact for America has claimed the Constitution already authorizes the new taxes. Are we too gullible to be free? PH

August 26, 2015

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August 26, 2015 - Posted by | Amendments to the Constitution, Balanced Budget Amendment, Chip DeMoss, Compact for America, enumerated powers | , , , , , , , , , , , , , , , , ,

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  1. […] 2 Compact for America’s (CFA) version of a BBA permits spending limits to be waived whenever Congress and 26 States agree. CFA’s version also authorizes Congress to impose a national sales tax and a national value added tax in addition to keeping the income tax! See THIS Paper. […]

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  5. Ms P. H.,

    How are you……….. love your blog. Keep it coming.

    I have a question. In the case of the Ky, Co. Clerk, how does the supremacy clause relate to her decision to not issue licenses?

    Thanks,

    Mike Stovall

    ________________________________

    Like

    Comment by mike stovall | September 4, 2015 | Reply

    • Hi Mike
      Let me say that is a great question, and I look forward to PH’s answer.

      My guess is that the Federal Government can have no legitimate supremacy in areas where they have no legitimate exercise of power in the first place…ie outside the enumerated powers.

      Again…good question.
      God bless
      MCE

      “The powers delegated by the proposed Constitution to the federal government are few and defined. Those which are to remain in the State governments are numerous and indefinite. The former will be exercised principally on external objects, as war, peace, negotiation, and foreign commerce; with which last the power of taxation will, for the most part, be connected. The powers reserved to the several States will extend to all the objects which, in the ordinary course of affairs, concern the lives, liberties, and properties of the people…” –James Madison, Chief Architect of the Constitution, Federalist No. 45

      Like

      Comment by M. Craig Elachie | September 4, 2015 | Reply

      • Right! All True.

        Like

        Comment by Publius Huldah | September 5, 2015 | Reply

    • Hi, Mike! Nice to hear from you!

      Article VI, clause 2 says:

      “This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land…” [emphasis added]

      That tells us:

      1. Only THREE things are eligible to comprise the “supreme Law of the Land”: The Constitution, Acts of Congress, and Treaties. Supreme Court opinions are not included! Supreme Court opinions aren’t even “law” [contrary to what lawyers were told in law school] – they are merely opinions on the law suits or proceedings before them.

      2. Furthermore, Acts of Congress must be made pursuant to Authority granted to Congress by the Constitution before they qualify as part of the “supreme Law”. If Acts of Congress are not authorized by the Constitution, the acts are mere usurpations and must be treated as such. See: https://publiushuldah.wordpress.com/2011/04/17/nullification-smacking-down-those-who-smack-down-the-constitution/

      3. Treaties must likewise be made under the Authority of the United States before they qualify as part of the “supreme Law”. From where do the President and the Senate obtain their Authority? From the Constitution. The Constitution must specifically authorize the national government to act in an area before they may lawfully make a Treaty addressing the object. The national government may not circumvent the limitations imposed by the enumerated powers to do by Treaty what they may not lawfully do pursuant to the enumerated powers. E.g., our Constitution does not delegate to the national government authority to restrict our arms, ammunition, regulate firearms dealers, do background checks, etc. The national government may not lawfully circumvent this restriction by means of a Treaty wherein the signatory governments agree to disarm their Citizens or Subjects. https://publiushuldah.wordpress.com/category/treaty-making-powers-of-the-united-states/

      The Supreme Court’s decision in the homosexual marriage cases was a grotesque usurpation of powers not delegated. https://publiushuldah.wordpress.com/2015/05/11/searching-for-marriage-in-the-fourteenth-amendment/ And the opinion of these FIVE morally degenerate lawyers is not “law” in any sense of the word.

      So Kim Davis is a Heroine of the Republic for standing up to Tyranny.

      Like

      Comment by Publius Huldah | September 5, 2015 | Reply

      • Hi PH

        Great response…and BTW: your exegesis of Article VI clause 2 is a GREAT illustration of an honest handling of a written text. Thanks. Funny that it is just such honest handling of communication that has become anathema in our day….

        In our day, honesty has been challenged, so now we must make a conscious choice between these two approaches. Suffice to say that nations rise or fall on just such choices.

        God bless
        MCE

        “Do not separate text from historical background. If you do, you will have perverted and subverted the Constitution, which can only end in a distorted, bastardized form of illegitimate government.” –James Madison

        “I entirely concur in the propriety of resorting to the sense in which the Constitution was accepted and ratified by the nation. In that sense alone it is the legitimate Constitution. And if that is not the guide in expounding it, there may be no security for a consistent and stable, more than for a faithful exercise of its powers. If the meaning of the text be sought in the changeable meaning of the words composing it, it is evident that the shape and attributes of the Government must partake of the changes to which the words and phrases of all living languages are constantly subject. What a metamorphosis would be produced in the code of law if all its ancient phraseology were to be taken in its modern sense. And that the language of our Constitution is already undergoing interpretations unknown to its founder, will I believe appear to all unbiassed Enquirers into the history of its origin and adoption.” ~James Madison, letter to Henry Lee, 1824

        “On every question of construction, carry ourselves back to the time when the Constitution was adopted, recollect the spirit manifested in the debates and instead of trying what meaning may be squeezed out of the text or invented against it, conform to the probable one in which it was passed.” ~Thomas Jefferson

        “To say that the intention of the instrument must prevail; that this intention must be collected from its words; that its words are to be understood in that sense in which they are generally used by those for whom the instrument was intended; that its provisions are neither to be restricted into insignificance nor extended to objects not comprehended in them nor contemplated by its framers, is to repeat what has been already said more at large, and is all that can be necessary.” ~Chief Justice John Marshall in Chief Justice John Marshall in Ogden v. Ogden v. Saunders, 6 L. Ed. 606, 647 (1827).
        \
        “The first and governing maxim in the interpretation of a statute is to discover the meaning of those who made it.” ~James Wilson, Of the Study of Law in the United States, 1790

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        Comment by M. Craig Elachie | September 5, 2015 | Reply

        • My Papa and Ayn Rand taught me how to read analytically; and I practiced it while studying Philosophy as an undergrad – I made Charts of the various philosophers’ systems. I used the huge sheets of computer paper they used in those days and put on one page a chart of the entire system. Then I photographed the chart in my mind and it stayed for many years.

          I am STUNNED to see how HATED Truth tellers are. It is a good thing I have no feelings!

          But I do appreciate warm fuzzies – so thank you.

          Like

          Comment by Publius Huldah | September 5, 2015 | Reply

          • Hi PH
            Re: Warm fuzzies

            You are welcome in that regard of course, but that said, I have come to believe that a core problems we have in our nation revolve around the interpretative principles….

            So, for the benefit of all, I try to point them out when it is not too much off subject. Rarely do I have a good example to point to, as in this case.

            Thanks
            God bless
            MCE

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            Comment by M. Craig Elachie | September 5, 2015

          • Americans are not concerned with arriving at “Truth”. That concept is meaningless to them. All they care about is getting the result they want. I learned my first year in law school some 45 or so years ago – the law professors said this w/o seeming to disagree with it – that judges decide what result they want and then write an opinion to justify the result they want. This IS what goes on. Litigation attorneys all know it. They seem proud of it – proud that the legal system spits on Principles – proud of this abuse of power. It doesn’t seem to bother people!

            The only “interpretation” which goes on is interpreting words to mean what you need them to mean to get the result you want in the case before you. And I never see any sense of shame. Or disapproval of this. The homosexuals think it is wonderful that 5 lawyers on SCOTUS defined “liberty” to include the meaning, “homosexual marriage is a liberty right under Sec. 1 of the 14th Amendment”.

            My mentor was a litigation atty who started litigating cases in 1960. He said that at that time, it didn’t matter who you were, who your client was – or who the opposing counsel or his client were: If you were right on the facts and the Law, you won. But by 1970 – he said THAT WAS ALL GONE. By the early 1970’s, males judges solicited sexual favors from young female lawyers who appeared in their courts – this happened to every reasonably attractive young female attorney I ever knew. I found VERY few honest judges – though there were some. And we were so grateful for them.

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            Comment by Publius Huldah | September 5, 2015

          • Good morning PH

            Re: Americans are not concerned with arriving at “Truth”. That concept is meaningless to them. All they care about is getting the result they want.”

            My friend, I could not agree more…and of course, since truth is nothing short of our thinking corresponding with reality, that means we have problems at extraordinarily deep levels, epistemology, etc. problems that now manifest in a literal, not metaphorical, “nation madness.” There is apt reason we get the feeling that we are dealing with people from another dimension.

            Of course, we all reason deductively based on common experience, but great numbers do so beginning with an erroneous major premise, requiring a constant frenzy of adjustment, a constant explaining away of the contradiction error produces, all in order to protect the erroneous premise at all cost…

            ….THAT is precisely the observation of 20th century philosopher Mortimer Adler:

            “Here lies what for me is the remarkable difference between the faults I have found in modern philosophy and the faults I found in the tradition of Aristotelian and Thomistic thought. The errors and deficiencies in this or that modern philosopher’s thought arise either from his misunderstanding or, worse, his total ignorance of insights and distinctions indispensible to getting at the truth—insights and distinctions that were so fruitful in the works of Aristotle or Aquinas, but which modern philosophers have either ignored or, misunderstanding them, have dismissed. In addition, the errors in the thought of this or that modern philosopher cannot be corrected by appealing to his own most fundamental principles, as in the case with Aristotle or Aquinas. On the contrary, it is usually his principle—his points of departure─that embody the little errors in the beginning which, as Aristotle and Aquinas so well knew, have such serious consequences in the end.” –Mortimer Adler, A Second Look in the Rearview Mirror, 1992.

            We are now in the time of the “serious consequences” he mentioned as our society now literally oozes this kind of aberrant thinking in ALL professions, not just law…and in fact we TEACH it to our kids as the correct way to think of things.ell

            Talked to a guy just a few days ago who insisted the law of non contradiction was no longer valid. Of course, he had to use it in order to argue against it (grin).

            There is a bit of good news for us in all this. There is historical precedent. Its the sort of thing happens to nations at certain points. We can learn from history if we will. Unfortunately, the very problem we are discussing leads vast numbers of people to believe history no longer applies to them, which is why most nations do not survive the malady.

            On the positive side we can trust that this madness only goes so deep. Fact is a liar always knows when they are lying. They know!

            God bless
            MCE

            “If the foundations are destroyed, What can the righteous do?” Psalm 11:3

            Like

            Comment by M. Craig Elachie | September 7, 2015

  6. One big problem with all three of the tax plans currently being touted, the Fair, Flat, and Progressive Tax is none of them help control the insatiable appetite of the Leviathan otherwise known as the federal government.​

    The original intent was for the federal government to be funded primarily by tariffs, which would for the most part be sufficient if Congress spent on enumerated powers only. Congress was only supposed to directly tax citizens in times of emergencies to cover what the tariffs could not. But it was up to the individual states to determine the best way of raising the required sum to which they were responsible for. Thus setting up a check and balance where the states would have an interest in why that money was being collected and where it was was being spent. As James Madison wrote in Federalist #51, “Ambition must be made to counteract ambition.”

    As it is now with the Progressive, and would be under the Fair and Flat, the Congress has a permanent internal direct tax on the people while still being able to increase the national debt unproportionality. Without the taxes reflecting the debt, the Congress escapes accountability for spending us into oblivion because it doesn’t directly effect ‘We the People’ for us to care. And in bypassing the states in the collection of those taxes, the feds are able to continue bribing the states into being accomplices to their usurpation of powers… with our own money!

    ​It seems to me that if we are to have any meaningful tax reform, we must return to the one originally designed for a limited government of enumerated powers only. John William Kurowski has written a well detailed paper here that should be considered.

    http://usafoundingfathers.blogspot.com/2006/03/founding-fathers-original-tax-plan.html

    Like

    Comment by Blue Tail Gadfly | August 29, 2015 | Reply

    • Welcome, my dear Friend! I have discussed this issue with Steve Eldridge. He too agrees that we should return the federal government to its enumerated powers. HOWEVER, we must start from where we are. The federal gov’t has turned millions of Americans into dependents – the promises made to those who are dependent on social Security and Medicare must be kept. Those and other such programs must be dismantled in an orderly fashion. It would take some time to dismantle all of the unconstitutional federal agencies and transfer the functions back to the States and The People. And during the interim, the feds need some funding.
      I hope Steve will come back here. – I’ll email him.
      He is my adopted Brother.

      Like

      Comment by Publius Huldah | August 30, 2015 | Reply

      • Hi PH

        I forget to check the box to be notified of new comments.

        I don’t disagree on the need to phase out the unconstitutional agencies and programs that many people are dependent upon and would be devastated if suddenly removed.

        Someone has to pay for our debt and obligations, and in a representative government such as ours it is ultimately the responsibility of its citizens. The sad fact is: because of our massive debt that ‘We the People’ have allowed for generations, and continue to allow, it is unlikely that this generation will ever see a day when they are no longer directly taxed by the federal government.

        With our current 18 Trillion debt, which is still skyrocketing exponentially, and using the Fair Share Tax formula, Tennessee’s share with 9 U.S. Reps (9/435) is roughly 360 Billion dollars. California with 53 Delegates is 2.34 Trillion. The way it is now and with the other tax proposals, if Tennessee managed to pay off their share of the national debt, they would continue paying for the other states as well.

        Unfortunately that is all a moot point unless Americans pull their heads out of their posterior and begin holding their representatives’ feet to the Constitution. Too many believe the false notion that a Constitution can and should be self-enforcing, and that a government will automatically obey it without any oversight by its rightful masters. A belief which has been propagated on the right by the stooges of COS, a belief which also runs contrary to the principles of self-government in a republic.

        ~BTG

        Like

        Comment by Blue Tail Gadfly | September 3, 2015 | Reply

        • Blue Tail, every word you write is a light in the vast darkness which surrounds us.

          I know little about economics, management, and such – but can think conceptually. It occurs to me that we could lawfully and morally repudiate that portion of our national debt which is “owed” to the federal reserve banks. If it is true that with the Federal Reserve Act of 1913, our Congress granted to private banks the monopoly power to create credit out thin air – and that we are being charged interest on this credit, then we should repudiate that part of the debt. Whom can we ask about this, if you know?

          If that is True – and I have no independent knowledge of this issue – then one marvels at the wickedness of men who could approve such a system. The Federal Reserve Act of 1913 was absolutely necessary to fund the regulatory welfare State Americans clamored for. To establish such a state, a government needs an unlimited supply of credit – and THAT is what they got from the Federal Reserve Act of 1913.

          And if it is True, then it isn’t so bizarre that some envision the American economy being transformed into one based on transfers of “carbon credits” – or some such. Forget actual production of things People want and need! Let’s just transfer “carbon credits”. Some of us will get to sell them! Who creates them? What are they? Why do some get to sell them; and others must buy them?

          Obviously, Americans have gone stark raving mad.

          Like

          Comment by Publius Huldah | September 3, 2015 | Reply

  7. Can the national sale tax, and any taxes proposed for the use of the www. The citizens that pay taxes are already paying too much in taxes, and all our gov. does is spend wastefully, and borrow too much, and won’t make a budget to bring down our national debt…

    Like

    Comment by Burton Pauly | August 27, 2015 | Reply

  8. Superb legal analysis, as usual – even as a lawyer, I cannot improve on Publius’s work.

    While a national retail sales tax (NRST) may have superficial charm for the unsophisticated, it just won’t work – the tax rate would be obnoxiously high to replace our current tax revenues.

    Indeed, the verbiage of the (un)balanced budget amendment (BBA) explicitly push for a NRST. A national blowhard for the BBA is also head of a group called FairTax Patriots who told me that the FairTax is next right after BBA.

    The Fair Tax® (FT) is a Progressive Scam – we need a 10% “Tithe” Tax!

    I am a retired lifetime tax consulting professional (JD, LLM in Taxation, CPA, co-author of a 3 volume tax treatise, lecturer), with no financial stake in ANY tax system. This only a brief summary – for supporting details, call Stephen C. Eldridge tel. 423-532-7337. Website: http://sceldridge.wix.com/sceldridge

    FT trumpets that it is MORE Progressive (more welfare) – see http://bit.ly/1uym1pB

    Of prime importance, the Prebate is NOT a real refund of FT paid, as it appears to be. It is a $600B NEW ENTITLEMENT, which would have all Americans receiving a substantial monthly federal check – a very bad idea for those of us who are not Socialists. It is financially and politically unwise to create yet another huge entitlement that will only increase in the future.

    FT (Prebate) would have the poor make no contribution to the federal budget, pay nothing even for their personal SS/Medicare benefits, AND give them a large tax welfare check. FT (Prebate) extends tax welfare to the non-working poor – and also takes the next Progressive Cloward-Piven step towards giving SS/Medicare to all regardless of work, by removing the tax “penalty” for reporting SS Wages, thereby “inviting” the fraudulent reporting of SS Wages (as also noted by other authors).

    The Prebate is apparently calculated to merely repay the poor for any FT they pay, but actually would pay them far MORE than any FT they might pay, by “assuming” the poor spend more than the underlying HHS Poverty Guidelines and also by “assuming” they will pay FT on all of their purchases, (but they WON’T) – see http://bit.ly/1xBkWLZ (6/1//15)

    Some FT’ers today still market the original FT lie that we would get a large raise from the elimination of the Income Tax AND with FT, prices would remain the same as today’s – but that just cannot be true. FT is merely supposed to change the method of paying the same total dollars of tax we pay today, so that if you get a big raise, prices must go up by the same total dollar amount (except for a minor amount for savings in compliance costs) . Retail prices would rise by nearly the full 30%. Even the AFFT, and an economist it engaged, admits that prices would rise substantially, but prices would rise even higher than they admit – see http://bit.ly/1ELKVqb

    FT results in a 40-70% in-your-face sales tax that would spark a taxpayer revolt destroying our retail-sales-sensitive economy. That 40% is the sum of 30% (not 23%) FT, plus (e.g.) 10% S/L sales tax. That 70% is the increased rate needed at a sample 30% FT evasion rate (the FT incredibly assumes zero evasion, zero intentional reduction in spending and zero migration from new to used goods).

    On top of that 40-70% tax, FT also hides another appx. 15+% in taxes (but FT’ers deceptively say “the FT is fully transparent – just look at your receipt and you will see all of the FT you will pay”). 1) FT’s 30% rate is really 42+%; the 12+% is hidden by having fed + S/L govts pay FT (which is likely unconstitutional) – ultimately, they must get that money from you. 2) The fed budget will rise for a) higher SS benefits for large SS & federal pension COLA’s caused by FT’s nearly 30% price increase, and for b) fraudulent new SS benefits “invited” by FT’s removal of the “tax penalty” for reporting SS Wages (as noted by other independent authors ). Used property is advertised as exempt from FT, but that may be a cruel hoax, because of the practical difficulty of establishing that the buyer has met the requirements that FT was paid AND that none of 3 listed credits against the FT were claimed.

    FT’s new IRS (i.e., STAA) may well be far more invasive than today’s IRS – the buyer is liable to pay FT and receive/show a receipt – STAA may well audit consumers – see Sec 101(d). Also we may well have to file an “Annual FT Summary”. See Myth that the FT “Abolishes the IRS” at bit.ly/1xqIOTQ

    As also noted by Cato Institute (see http://bit.ly/1vNxnq3 ), FT leaves us more vulnerable to winding up with both a NEW Income Tax and FT. Congress would surely repeal FT’s laughable Sunset Clause and (with the 16th Amendment surely still firmly in place)would use the excuse of the large revenue shortfall from evasion/avoidance, to enact a new Income Tax which I believe is Congress’ true ultimate objective – i.e., to be able to grab even more of our money to redistribute to those who will vote for them and contribute to their campaigns.

    Seniors would start to pay for SS/Medicare again and some would pay a 2nd-3rd tax on their earnings. Many middle class seniors would pay more FT than they would have paid in Income Tax and many would lose purchasing power because of 1) the nearly 30% price increase, and 2) the higher S/L & federal taxes required because they must pay FT and can only get those funds from us, and 3) higher federal taxes due to nearly 30% higher SS & federal pension COLA’s and fraudulent SS benefits.

    FT promises grand economic benefits which are all entirely unpredictable – mere Hype & Change. FT employs marketing hype and hyperbole, making countless undeliverable claims.

    We need a Flat Income Tax; No Deductions, No Exemptions, No Credits and a 10% rate, with business income taxed only once on a very simple basis – See H.R. 1040 (which has been included in Paul Ryan’s new budget), but with changes as noted here – IRS is neutered, 1 page tax filing, everyone pays, more evolutionary. Let your representatives in Congress know that this is what you want. See http://bit.ly/1Awaxs7

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    Comment by Stephen C. Eldridge | August 27, 2015 | Reply

    • See, Douglas? Stephen is the expert on all the various tax proposals being pushed here and there. Which is why I asked him to comment.

      Like

      Comment by Publius Huldah | August 27, 2015 | Reply

    • You said; “We need a Flat Income Tax; No Deductions, No Exemptions, No Credits and a 10% rate, with business income taxed only once on a very simple basis – “. Please define ‘income’.

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      Comment by Douglas R. Smith | August 27, 2015 | Reply

      • Criminal tax defense was not my area, but long ago, one or two criminal tax defense lawyers told me that at the time the 16th amendment was ratified, “income” did not include wages or payment for work done. If you mow my lawn, and I pay you the going rate, you have had no “income” – you and I had an exchange of services for $.
        But I haven’t seen the evidence. And I don’t know when the feds redefined “income” to include payment for work done.
        I don’t think Steve did criminal tax defense either, but he may know the answer.
        As you probably know, law is so complicated these days, that lawyers have to specialize in one or two areas.

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        Comment by Publius Huldah | August 27, 2015 | Reply

        • Excellent analogy. I use it myself, but I carry it one step further. Let’s say that you ask me to mow your lawn for $100. I contact Bob and ask him if he will mow your lawn for $50. He mows your lawn and you pay me the $100. I, in turn, pay Bob $50. The $50 I have left is, by def. of the U.S. Supreme Court, ‘income’. While Bob was mowing your lawn I was in my backyard watching a football game. Bob was exchanging his labor, his time of life for $50. I was acting as a business and had no personal time involved in the mowing of your lawn. Therefore, I must pay a tax on my $50 and Bob is exempt due to Art. I, Sec. 2, Claus 3 of the United States Constitution. If I were supervising Bob to make sure he did a good job then I would be able to claim an exemption on a portion (or all) of the $50 and pay a small tax or no tax because my time of life was also involved.

          Congress cannot define ‘income’ as stated in the 16th Amendment, nor can the IRS, only the United States Supreme Court can define ‘income’. Income, according to the U.S. Supreme Court is “profit and gain severed from capital”. The 16th Amendment did not create a new tax or do away with the apportionment of direct taxes per Art. I, Sec. 2, Claus 3. It (the 16th) only took ‘income’ out from under the constrains at Art. I, Sec. 2, Claus 3 and placed in under Art. I, Sec. 8, Claus 1 where it belonged as an ‘excise tax’. The 16th Amendment has virtually the same wording and meaning as the Corporate Income Tax Act of 1909. It is a tax on the ‘gross income’ of corporations and other business entities not on the private exchange of money for services. So says the United States Supreme Court.

          PH, it is not a question of criminality or Constitutionality, but one of ignorance by the American people. I find that the United States Constitution is very specific as to the enumerated powers of Congress, as you do, and I also find that the Internal Revenue Code is well within these Constitutional constraints. If you like I can take the time to address this issue using the IRC only at a later date. For now, I would like to address Stephen C. Eldridge’s ‘Flat Income Tax’.

          Mr. Eldridge does not elaborate on the ‘Flat Income Tax’ proposed in his culminating paragraph, but does expand in some detail on other sales taxes and flat taxes in numerous other paragraphs. I asked for the def. of ‘Income’ in the Flat Income Tax’. In looking at his stated credentials as a ‘life time tax consulting professional’ I gathered that he prepared tax statements for private people and businesses alike. And with that I am presuming, since he personally did not reply, that his Flat Income Tax would encompass, not only a 10% tax on over 33.5 trillion dollars of gross income of corporate businesses within the United States, but also the $50,502 median household ‘income’ of over 114 million families in the U.S. per year.

          As we can see by moving the decimal point to the left one digit, a revenue of over 3.35 trillion dollars would be generated from businesses. That is a considerable amount but only just over half of the 6.2 trillion dollar U.S. budget for 2015. Now, if we include 10 % of the median household ‘income’ which amounts to 575 billion dollars ($50,502 x 114 million housholds x 10%) we still come up $2.28 trillion short. But wait a minute. In the first paragraph you and I believe that the household income from 114 million families was an exchange of ‘services for $’. Now, we cannot include 575 billion dollars of household ‘income’ because that is in violation of Art. I, Sec. 2, Claus 3 of the United States Constitution, so we are now short 2.85 trillion dollars. Looks as if we need to downsize the Federal Government by around 46% because it will be a cold…cold….cold day in hell before you-PH- would allow a Constitutional Amendment to amend Art. I, Sec. 2, Claus 3 and abolish apportionment of direct taxes. Am I right?

          Back to the ol’ single tax, where all taxes are eliminated and there are no exemptions and a single tax is put in their place. If this requires a Constitutional Amendment of Art. I, Sec. 8, Claus 1 so be it. Incidentally, I co-authored with a gentleman by the name of Walter Huss, the 2 ½ % single tax for Oregon in the mid 1990’s. I think I know a little bit of what I’m talking about.

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          Comment by Douglas R. Smith | August 28, 2015 | Reply

          • 1. In your first para, you give an analogy which purports to illustrate a difference between “income” and “wages”. I have not personally researched this – so have no independent knowledge of the definition of “income” current at the time the 16th Amendment was drafted and ratified.

            2. The Supreme Court does NOT have the power to define words in the Constitution. The Supreme Court is as much subject to the Constitution as the other two branches of the national government. The task of the Supreme Court is to apply the definition of “income” as understood at the time of the drafting & ratification of the 16th Amendment.

            3. You are quite mistaken in asserting that the 16th Amendment did not create a new tax. Our Framers would be horrified at your statement that our Constitution authorized the federal government to impose a tax on the “incomes” of the American People.

            The income tax is an “excise tax”? Rubbish! Only in an Orwellian world where words mean whatever the statists want them to mean.

            The Corporate Income Tax you mentioned would also be unconstitutional as a tax NOT AUTHORIZED by our Constitution.

            So tell me the Truth: Are you with the Compact for America People? I can smell a big government person a mile away. And I know the techniques of manipulation.

            Like

            Comment by Publius Huldah | August 29, 2015

          • Answer to your comment labeled #1.

            Here are some quick facts for your perusal. Cut and paste in the URL if a ‘control click’ does not direct you.
            http://www.constitutionalincome.com/ten-key-facts.html
            Here is an in-depth look at the events leading up to the 16th Amendment.
            http://newswithviews.com/money/money4.htm

            I worked for a company called Uniforce for over 2 years. They are in all the major cities in the 50 states. They hired me out for $27 an hour and paid me $17 an hour. The $10 difference is ‘income’ from wages for Uniforce. This is the wages referred to in the IRC. I claimed exempt on my W2 (or is it W4? It’s been so long) and they did not withhold any Federal or state taxes. They knew the law and so does the IRS. Income in the IRC still means the same today as it did when the 16th was ratified.

            Answer to your comment labeled #2

            You are right. My bad. I’ll correct my master copy to reflect the difference . Thanks.

            Answer to your comments labeled #3

            First comment answered.

            I cannot find where I said that our Constitution authorized the imposition of a tax on the ‘income’ of the American People. See my response to #1 above.

            Second comment answered.

            I am only repeating (not quoting verbatim) what the U. S. Supreme Court is saying in cases brought before it right after the ratification of the 16th.

            Third comment answered.

            The Corporate Income Tax Act of 1909 was an Act of Congress. An Act of Congress not dealing in whole or part with the enumerated powers given the Federal Government by the Constitution only has effect within the Territories in which it has plenary jurisdiction under Art. 1, Sec. 8, Claus 17 of the U.S. Constitution. I went 4 rounds with the Selective Service Administration and the United States Department of Justice (threatened w/$200,000 fine and 5 years in prison) over the meaning of the term ‘United States’ in the Military Selective Service Act (an Act of Congress) when my son turned 18. I did not have to require my son to register with the SSA. I quote them verbatim; “Ok, you don’t have to have your son register, but he will not be entitled to receive any benefits from the Federal Government”. Did they just say OK to appease me because I wasn’t worth their trouble or did they know the law?

            Fourth comment answered.

            I’m a 69 year old man that has no affiliation with any governments whether they be city, county, state or federal. I have had judges literally run out of the courtroom when I entered. The NCIC computers in police cruisers would flash the warning ‘DO NOT STOP, DO NOT DETAIN, CONSIDERED DANGEROUS’ when my name was entered. Not because I would physically cause them injury, but because I knew just a little bit more than the average American.

            Those in government that know the law and allow it to be perverted or pervert it for their own benefits are criminals and should be prosecuted to the full extent of the Law. If two or more people conspire to deprive a citizen of his/her Constitutional privileges and immunities they are levying war against the citizen and for that matter all citizens. See Black’s Law Dictionary, 4th Ed., page 1052. “Treason against the United States, shall consist only in levying War…” see Art. III, Sec. 3 of the United States Constitution.

            Those that are ignorant of the Law and do only what they are told and thereby prevent the execution of a public law should have a choice of undergoing extensive instruction (at their expense) in the Laws pertinent to their employment, U.S. History and the U.S. Constitution or resign.

            The city in which l live will not do business with me unless it is of a criminal nature. I obey all laws whether I think them unjust or not and therefore, stay out of the criminal justice system (corrupt criminal justice system I might add). I am not against government only those in government who pervert the law. Call me one of those right wing, religious (I believe in God) nuts and conspiracy theorists wackos if you want, but I firmly believe that certain powerful people over the last 100 years or so have purposely manipulated the educational systems in this country. Their goal is to deprive the American people of the Constitution and their heritage. ‘Keep them ignorant of the truth, facts and Law and we can cram tons of horsecrap down their throats any time we want’ would be/is their motto.

            In order to save my wife the mental strain of not knowing if I was lying dead in a ditch somewhere 15 minutes after leaving the house I gave it up. Now I just try to educate a few people in as inconspicuous a way as possible by commenting on a few posts. For your information I have never heard of the Compact for America.

            You asked for the truth and you got it. I don’t have the time or energy to fight with you. If you don’t want me to comment on your topics of discussion just say so and you and your readers will never hear from me again.

            Like

            Comment by Douglas R. Smith | August 29, 2015

          • I work to help restore our Constitutional Republic. It is not about me – it’s not about you. But you are making it about you and your ego. You are highly opinionated. Some of what you say is not correct. You must ask yourself if you really have a reasonable basis for considering yourself an expert on this issue. Lay ego aside. We are drowning in misinformation: some of it put out by progressives/marxists. Some of it put out by ignorant people on our side who think they are experts on matters of which they know very little. And Oh! do they pontificate.

            Like

            Comment by Publius Huldah | August 30, 2015

  9. We, here in Oregon, understand the pitfalls of a sales tax. First, the State has to wait until an item in commerce is sold to the end consumer before it gets any money. Second, the business that sells the item has all the paperwork to contend with. Third, there are too many exemptions and therefore the sales tax must be higher than it would normally need to be . There’s more pitfalls but I’m sure that you’re getting the idea. Through the Initiative Petition and Referendum Process here in Oregon certain individuals keep trying to get a sales tax passed, but the People won’t have it because we have a good example just to our north.

    If my memory serves me correctly an ad valorum tax is very labor intensive and requires mountains of paperwork. Some countries in Europe have ad valorum taxes and from the horror stories I have read we don’t need one on a National or State level.

    Why not eliminate all taxes currently in force and have just one single tax. Some call it a consumption tax, some a flat tax. I call it simply a ‘single tax’. Contrary to popular believe the concept of a ‘single tax’ is not new. It’s been around since the mid to later parts of the 19th century, which is well over a 100 years. A reason it has been kept hidden or quiet until recently may be that it destroys the power structure of governments. Only by 2/3 majority vote of the people can a rate be changed and then only for a specified period of time. Governments must come crying with hat in hand to the people, which is the way it should be.

    The way a single tax works is simple. Businesses, whether corporate or otherwise, are in business to make money. If they don’t make money they are out of business. So they pass all costs (including taxes) of doing business on to the next business or the end consumer. If a small percentage of each transaction of business is added to the sale price after the business secures its profit margin, then the business only has to keep records of its gross sales for a given time period. Considerable monies can be saved on the administrative side of the ledger and added to the production side, making the product cheaper.

    Let’s say that it’s a 5% ‘single tax’ with 3% to the state and 2% to the Federal government. If corporation A sells an item, any item, to corporation B, then corporation A has included within the sales price the 5% and on a monthly or quarterly basis it sends a check for 5% of its gross revenues to the State Treasury. The State in turn, sends a check to the Federal Treasury for its share. The people as end consumers pay the retail price and the retailer sends a check etc., etc. There would be no exemptions on commodities sold whether it be food stuffs, medicine, etc. This way the rate can remain small. The way I look at it is that we are all in this together and each should pay a fair share of the costs.

    The Constitution at Art. I, Sec. 2, Clause 3 calls for an apportionment of direct taxes. So your labor, your time spend to secure your life, cannot be taxed under this system(or any tax system in place today). However, your gains from the labor of others will be taxable. The sale of items such as homes and automobiles that have a mortgage or loan from a bank still attached to them will be subject also. Personal items owned solely by you would not be subject to a ‘single tax’ unless you wish to volunteer. Oh, and by the way, the Federal and State governments cannot deficient spend and We the People must demand open book policies. Can you say ‘Good Bye, Federal Reserve’? The United States Treasury Department prints the money now. To be able to pay my debts per constitutional requirements would certainly be an added blessing to a ‘single tax’ system. Keep it simply simple (KISS).

    Note: The ‘single tax’ was presented as a Constitutional Amendment to the Oregon Constitution through the Initiative Petition and Referendum Act in the mid 1990’s. A Federal Constitutional Amendment would be necessary to implement it on a National Level. Perhaps, we can amend the existing 16th to provide for these provisions. Constructive critiques welcome.

    Like

    Comment by Douglas R. Smith | August 26, 2015 | Reply

    • My suggestion is that we return the federal gov’t to its enumerated powers – then it would require very little money. And I remember when my State government was very small. Just a few buildings in the capitol City.
      My Friend, Stephen Eldridge, is an expert on this issue. I am going to ask him to comment here.

      Like

      Comment by Publius Huldah | August 27, 2015 | Reply

  10. Great article!! I could not agree with you more.

    Like

    Comment by Bill Fisher | August 26, 2015 | Reply

  11. Hi PH

    Back in 2011 Judge Robert Bork wrote a masterful piece titled “Turning to the Constitution in Times of Stress.”
    http://www.washingtontimes.com/news/2011/jun/14/turning-to-constitution-in-times-of-stress/

    He began this way:

    “The essence of conservativism is fidelity to the reality principle. Not for us, we pride ourselves, the utopian vaporings of the left. In times of stress, however, the temptation for conservatives is to reach for bromides to palliate their sufferings.”

    What a masterful observation…and one of those bromides was the BBA, of which Bork observed:

    “One hears much these days from Glenn Beck-style conservatives about returning to the original Constitution as a cure for Obama-inflicted miseries. We also hear pleas for a Balanced Budget Amendment to save us from fiscal disaster…these proposals share one characteristic: They would push serious issues of national security and domestic policy into courts and thus relieve Congress of any responsibility for taking necessary but unpopular action.

    “The Balanced Budget Amendment would, it is hoped, direct public fury at spending cuts away from congressmen to robed bureaucrats who need not stand for election…”

    Indeed…as you have noted.

    Now…as to solutions–how about these:

    NC Senator Jesse Helms told of a company that tried an interesting idea. Instead of paying their employees by check, they set up pay windows. The first window paid in full in cash, BUT, then at the second window took back the taxes, SS, etc…

    …they had to shut it down to prevent riots.

    Some years ago a guy from Texas was the House Majority Leader, Dick Armey advocated something quite similar. He pushed a flat tax. During a radio interview a caller asked him “So, everyone would just have 15% (or so) held out of their check?”

    Armey’s response was classic: “Oh no, that only hides it and makes it painless. I want every family to sit at their kitchen table and write out a check to the government every month just like they pay their rent or house note or pay for their car. THEN, when people see just how much it actually is, that it is equivalent to another car or house note,etc., THEN there will be real tax reform.”

    Amen to that…

    Actually, there is an easier way to start…as suggested by Madison:

    “If this spirit shall ever be so far debased, as to tolerate a law not obligatory on the legislature, as well as on the people, the people will be prepared to tolerate any thing but liberty. –James Madison, Federalist 57 February 19, 1788

    Lets start by making all the laws applicable to all the people without exception, legislature, unions, etc…a great way to change hearts and minds.

    God bless
    MCE

    Like

    Comment by M. Craig Elachie | August 26, 2015 | Reply


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