By Publius Huldah
Do you remember the public discussions which went on for years about the proposed equal rights amendment to our federal Constitution? That’s how it’s supposed to be before an amendment is ratified: The People get an opportunity to hear the arguments, discuss it among themselves and their state legislators, and reject amendments which are bad.
What if someone found a way to circumvent this pesky public discussion, and get an amendment ratified before The People found about it? And even before the state legislators who ratified it found out what they had done? And what if this amendment delegated massive new taxing powers to Congress?
Such a scheme has been developed by Compact for America (CFA). They present their already prepared compact legislation to state legislators as a “balanced budget amendment”; and urge them to get it passed by their state legislature.
The provisions which authorize Congress to impose the new taxes, and which provide for pre-ratification of the new taxes amendment, are buried in some 15 pages of single-spaced excruciatingly convoluted and boring writing. Rare is the legislator who has the time to wade through the verbiage and figure out what it says. 1
Once three fourths of the States have passed CFA’s compact legislation, the new taxes amendment is thereby ratified.
So that’s how an amendment to our Constitution which delegates massive new taxing powers to Congress can be ratified before The People know what has been done to them; and before the state legislators who did it find out what they have done to the American People. 2
The scheme was passed several years ago by state legislators in Alaska, Georgia, Mississippi, and North Dakota; was passed this year by Arizona Legislators as HB 2226 and signed by the Governor of Arizona on March 30, 2017; 2 and is now pending in Missouri as SB 13, in Oklahoma as HB 1434, and in Texas as SB 959. Arkansas rejected it a week or so ago.
Let’s look at the particulars of the compact legislation using the Arizona Bill as the example.
HB 2226 does nothing to control federal spending or “balance the budget”
Section 1 of the Compact [page 2, line 16 of the pdf edition] allows Congress to spend as much as they take from us in taxes or add to the national debt! But that’s what Congress has been doing!
Sections 2 & 3 [page 2, lines 20-37] permit Congress to raise the debt whenever 26 States agree.
Section 4 [page 2, lines 38 et seq.] is a joke: Who believes Congress will impeach a President for refusing to “impound” an appropriation made by Congress?
CFA’s BBA is an actually a grant of MASSIVE new taxing powers to Congress.
The true purpose of the compact legislation is hidden behind promises such as, “cutting federal spending”, “balancing the budget”, and “scaring Congress”. The true purpose of the Compact is to delegate to Congress MASSIVE NEW TAXING POWERS. Specifically, it authorizes Congress to impose a national sales tax and a national value added tax (VAT).
This is where the grant to Congress of the new taxing powers is set forth:
Section 5 [page 3, lines 4-6] permits Congress, by a 2/3 vote of each House, to impose a new or increased “general revenue tax”.
Section 6 [page 3, lines 24-26] defines “general revenue tax” as “any income tax, sales tax, or value-added tax levied by the government of the United States…”
There it is! All Congress needs to impose a national sales tax and/or a national VAT tax (in addition to the income tax) is a 2/3 vote in each House!
Section 5 also permits Congress, by a simple majority of each House, to impose a “new end user sales tax” which would replace the federal income tax. But nothing requires Congress to impose a “new end user sales tax” to replace the income tax.
It will be up to Congress to decide whether to impose a new national sales tax and/or VAT tax on top of the existing income tax (if they get 2/3 vote of each House); or whether to impose a new end user sales tax to replace the income tax (if they get only a simple majority in each House).
So! CFA’s version of a BBA is not about “balancing the budget”, or “scaring Congress”, or “reducing federal spending”. It’s about giving the federal government massive new taxing powers!
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.”
When State Legislatures pass compact legislation such as HB 2226, they are actually pre-ratifying the new Amendment to the US Constitution which grants these massive new taxing powers to Congress.
Please note: When State Legislatures pass bills like HB 2226, they are RIGHT THEN AND THERE RATIFYING THE AMENDMENT. I’ll show you:
HB 2226 says in Article IV, Section 7 (e) of the Compact [page 6, line 43, et seq.]:
“When any Article of this Compact prospectively ratifying the Balanced Budget Amendment is effective in any Member State, notice of the same shall be given together with a statement declaring such ratification and further requesting cooperation in ensuring that the official record confirms and reflects the effective corresponding amendment to the Constitution of the United States…” [boldface mine]
Article IX, Section 1, of the Compact [page 11, line 41 et seq.] says:
“Each Member State, by and through its respective Legislature [passage of HB 2226], hereby adopts and ratifies the Balanced Budget Amendment.”
There it is: When State legislatures pass bills like HB 2226, they are thereby ratifying an amendment to the US Constitution which delegates massive new taxing powers to Congress.
When 38 States have passed legislation like HB 2226 – and when Congress approves it, 3 our Constitution is thereby AMENDED and Congress now has constitutional authority to impose a new national sales tax and a national VAT tax – even while keeping and increasing the income tax.
The provisions of the compact which deal with a convention – Articles V through VIII – are a smokescreen which obscures from state legislators the fact that when they pass legislation like HB 2226, they are pre-ratifying the amendment to our federal Constitution.
The convention is a formality – a free trip at taxpayers’ expense.
What’s the Solution?
Don’t feed the beast by giving it massive new taxing powers. The solution is to downsize the federal government to its enumerated powers.
Our Constitution already limits federal spending to the enumerated powers – learn what those powers are, and enforce the Constitution we already have.
And use your heads! You who foolishly believe that a BBA [whether CFA’s version or another version] will force Congress to reduce spending, know this: a BBA is a mandate for Congress to increase taxes, among other horrors.
1 Legislators don’t read the bills they vote on. That’s why they have bill summaries. The Compact legislation filed in Arizona has two bill summaries: HERE and HERE. Can you find where Arizona Legislators were informed they would be pre-ratifying a new taxes amendment to the US Constitution if they passed the compact legislation?
2 Arizona Republican Legislators were warned over & over & over again; the Governor of Arizona was also warned. But they ignored the warnings, and are without excuse.
3 Pursuant to Article I, §10, last clause, US Constitution, CFA’s Compact is not effective unless Congress approves it. Will Congress approve a Compact Amendment which delegates massive new taxing powers to them?
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
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.
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.
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
By Publius Huldah
The gap between what this BBA pretends to do – and what it actually does – is enormous. It has nothing to do with “balancing the budget” – it is about slipping in a new national sales tax or value-added tax in addition to the existing federal income tax.
We have become so shallow that we look no further than a name – if it sounds good, we are all for it. We hear, “balanced budget amendment”, and think, “I have to balance my budget; they should have to balance theirs.” So we don’t read the amendment, we just assume they will have to balance theirs the same way we balance ours – by cutting spending.
But that is not what the BBA does. In effect, it redefines “balancing the budget” to mean spending no more than your income plus the additional debt you incur to finance your spending. To illustrate: If your income is $100,000 a year; but you spend $175,000 a year, you “balance” your budget by borrowing the additional $75,000. See?
Under the BBA, Congress may continue to spend whatever it likes and incur as much new debt as it pleases – as long as 26 States agree. And since the States have become major consumers of federal funding, who doubts that they can’t continue to be bought? Federal grants make up almost 35% of the States’ annual budgets! The States are addicted to federal funds – who thinks they won’t agree to get more money?
The BBA enshrines Debt as a permanent feature of our Country; gives it constitutional approval; does nothing to reduce spending or “balance the budget”; authorizes a new national tax; and wipes out the “enumerated powers” limitation on the federal government.
Let’s look at the BBA, section by section, using plain and honest English. And then let’s look at how our Framers wrote our Constitution to strictly control federal spending.
Compact for America’s BBA
Section 1 says the federal government may not spend more than they take from you in taxes or add to the national debt. [Yes, you read that right.]
Section 2 accepts debt as a permanent feature of our Country – the “Authorized Debt”. This is the maximum amount of debt the federal government may incur at any given point in time.
- Initially, when the Amendment is ratified, the “authorized debt” may not be more than 105% of the then existing national debt. So! If the national debt is $20 trillion when the Amendment is ratified, the federal government may not initially add more than 105% of $20 trillion [or $1 trillion] to the national debt.
- After that initial addition to the national debt, the “authorized debt” may not be increased unless it is approved by State Legislatures as provided in Section 3.
Section 3 says whenever Congress wants, it may increase the national debt if 26 of the State Legislatures agree. [Yes, you read that right.]
Section 4 says whenever the national debt exceeds 98% of “the debt limit set by Section 2”, the President shall “impound” sufficient expenditures so that the national debt won’t exceed the “authorized debt”. And if the President doesn’t do this, Congress may impeach him!
This is a hoot, Folks! I’ll show you:
- No debt limit is set by Section 2! The national debt can be increased at any time if Congress gets 26 State Legislatures to agree. Can 26 States be bought?
- Section 6 defines “impoundment” as “a proposal not to spend all or part of a sum of money appropriated by Congress”. Who believes Congress will impeach the President 2 for failing to “impound” an appropriation made by Congress?
Section 5 says any new or increased federal “general revenue tax” must be approved by 2/3 of the members of both houses of Congress.
Now pay attention, because this is a monstrous trick to be played on you: Section 6 defines “general revenue tax” as “any income tax, sales tax, or value-added tax” levied by the federal government.
And when you read the first sentence of Section 5 with the definition of “general revenue tax” in place of “general revenue tax”, you see that it says:
“No bill that provides for a new or increased income tax, sales tax, or value-added tax shall become law unless approved by a two-thirds roll call vote…”
Do you see? This permits Congress to impose a national sales tax or value added tax in addition to the income tax, 3 if 2/3 of both houses agree. [Yes, you read that right.]
But the trickery of the drafters of this evil piece of work is even worse. Section 5 also says that any bill for a new sales tax which would replace the federal income tax need only be approved by a simple majority of the members of both houses.
This makes most readers believe that the income tax would be replaced by a sales tax.
But the Amendment does not require Congress to introduce a sales tax to replace the income tax. [Remember, that sales tax requires only a simple majority to get passed.]
Whereas it authorizes Congress to impose a sales tax or value-added tax in addition to the income tax! [This sales tax requires a 2/3 majority to get passed.]
Do you see? Are they tricky or what!
And which option will Congress choose?
Section 6 sets forth the definitions for the amendment. As you see, you must always read the definitions and apply them to the text.
Section 7 says the Amendment is “self-enforcing”. Rubbish! No Constitution or amendment is “self-enforcing”. There is only one way to enforce our Constitution: WE THE PEOPLE, who are “the natural guardians of the Constitution” (Federalist No. 16, next to last para), enforce it by learning it and by throwing out politicians who ignore it. And we must always be on guard against the wolves who seek to destroy it.
Nick Dranias, on the Board of Directors for the Compact for America , is a constitutional lawyer. History professor, Kevin R. C. Gutzman, on the Advisory Council, is a lawyer. Other prominent lawyers and a 5th Circuit Court Judge, are on the Council. They all know what their BBA really does. For a chilling disclosure of who some of these people are on the Council, see investigative journalist Kelleigh Nelson’s paper on News With Views.
How Does Our Constitution Control Federal Spending?
Our Constitution lists – itemizes – every power WE THE PEOPLE delegated to the federal government when we ratified the Constitution. These are the “enumerated powers”. Article I, §8 lists most of the powers delegated to Congress for the Country at large: 4
- immigration office (Art. I, §8, cl.4)
- mint (Art. I, §8, cl. 5)
- a few criminal laws (e.g., Art. I, §8, cl. 6)
- post offices & post roads (Art. I, §8, cl. 7)
- patent & copyright office (Art. I, §8, cl. 8)
- federal courts (Art. I, §8, cl. 9)
- military and citizen militia (Art. I, §8, cls. 11-16)
Various other Articles, sections, and clauses list additional objects of Congress’ spending, such as payment of the salaries of persons on the civil list (Art. I, §6, cl.1; Art. II, §1, next to last clause; and Art. III, §1).
Do you get the idea? The Constitution lists what Congress is permitted to spend money on. Its spending is limited to the enumerated powers, and the salaries of those on the civil list. If you will go thru our Constitution and highlight every power delegated to Congress and the President, you will see ALL the objects on which Congress has constitutional authority to appropriate funds. THAT is ALL – ALL – they may lawfully spend money on.
We have a debt of $17+ trillion (plus unfunded liabilities) because WE ignored our Constitution for 100 years; and Congress spent money on objects outside the scope of the enumerated powers.
This one page chart depicts the Constitution We established, and most of what Congress may lawfully spend money on. Is it not a thing of beauty? Do you want it back? Then Restore it!
Understand this: All versions of a BBA eliminate the enumerated powers limitations on the federal government. Under all versions, the Constitution is “fundamentally changed” to permit the federal government to do anything they want and to spend money on anything they please.
Amendments are a tricky business. And tricksters abound in our Land.
1 Compact for America is also trying to use the “compact of the states” provision & is calling for an Art. V convention. Red Flag, Folks! But for now, let’s look just at their dishonest BBA.
2 Congress always had authority to impeach and remove a President for usurpations of power – see this short Primer.
3 Section 5 also says Congress may reduce or eliminate existing income tax exemptions, deductions, or credits by a simple majority vote.
4 This paper lists all the powers delegated to Congress by our Constitution. You can learn them!
Postscript added Feb. 13, 2014:
Nick Dranias and others at Compact for America are posting here & there insisting that their BBA does not impose a new tax, because Congress already has authority to impose a sales tax or VAT tax. They say Art. I, Sec. 8, cl. 1, authorizes Congress to impose “imposts”, and that an “impost” is any kind of tax.
We must go by the original intent of “impost”. Ten or so of The Federalist Papers discuss “imposts”, and they are a tax on imports. That is quite clear. It is easy to find these Papers. The edition of The Federalist I use has a search function: just type in imposts and the list of Papers will come right up and you can read them all.
Webster’s 1828 dictionary also defines “imposts” as a tax on imports: http://1828.mshaffer.com/d/word/impost
“1. 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.”
So a national sales tax is most manifestly NOT an “impost”! And yes, Dranias’ BBA imposes a new national sales or VAT tax.