Every week we receive more bad news about the American economy. Last week was no exception.
The Fed began monetizing the national debt while China's GDP for the third quarter expanded 9 percent from the previous quarter, Dagong (the Chinese quasi-government ratings agency) downgraded the credit rating of the United States and billionaire George Soros expanded his global economic war-lording by opening an office in Hong Kong – advancing his goal of assuring China as the new leader of the new world order.
If America ever needed economic stability, it is now. And that is why I'm espousing that we advance on our new representatives to address the one issue that can stabilize and rebuild our economy: tax reform (or, even better, replacement).
I've demonstrated in the last several articles how the feds' string of deficits, debts and entitlement obligations will lead to America's economic collapse within one decade, unless of course the present Washington regime thrusts upon our backs such loads of taxation, the likes of which Americans have never experienced.
The Heritage Foundation figured that even President Obama's 2011 budget calls for $2 trillion in higher taxes over 10 years – and that's after accounting for his $154 billion additional tax revenue from allowing Bush tax cuts to expire for families making more than $250,000 a year. And what will 2012, 2013, 2014 and 2015 have in store for our taxes? More of the same!
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Remember, not too long ago, President Obama himself was cornered about prospective taxes and what it will cost to cover Obamacare alone, and it took him 17 minutes, 14 seconds to give a single answer. And his final concluding remarks were: "Boy, that was a long answer. I'm sorry, but I hope everybody – but I hope I answered her question."
The fact is, and Obama knows it all too well, that even if Washington makes extreme spending cuts, the only way the feds can pay for rapidly escalating national deficits, debts, entitlements and their extravagant expenditures is literally to double your taxes over the next decade. That is one big reason I believe that we not only need massive reductions in federal spending but a simultaneous major reformation to our tax system.
What we need now more than ever is a flat or FairTax.
Why?
First, because the IRS is an unconstitutional system that is totally overreaching and overpowering for a republic like ours, as well as a bureaucratic nightmare for anyone caught in its auditing web. It has no check and balances – it can't be held accountable to we the people.
Second, as it stands, the present tax code penalizes productivity and cripples entrepreneurs and our capitalistic economy. As the Heritage Foundation reports, the top 10 percent of income earners pay 70 percent of all income taxes, while more than a third of all U.S. households pay no income taxes at all – and 47 percent paying no federal taxes.
Source: Heritage.org |
Third, it's time we had a system through which people didn't have to figure out ways to cheat to save their money. As my friend Mike Huckabee says:
The FairTax is a completely transparent tax system. It doesn't increase taxes. It's revenue neutral. But here's what it will do. It will bring business back to the United States that is leaving our shores because our tax laws make it impossible for an American-based business to compete … the fair tax was designed by economists from Harvard and Stanford and some of the leading think tanks across the country. …
That's another huge plus about a FairTax: It will bring back to the U.S. economy trillions of dollars hiding in offshore accounts. With the FairTax, these people can bring their money back to invest here, which would give a huge boost to our economy. It's the biggest stimulation package there is. With the FairTax, the harder you work and the more money you make, the better off you and our economy will be. You pay taxes only when you buy something, which means you can control how much you're taxed, and you're never penalized inequitably for working hard. As the Fair ax website says, "Think of it as the world's biggest economic jumper cables!"
The FairTax will not only collect taxes from the 47 percent of citizens who pay no federal taxes but reduce taxes and be more equitable for all the rest of us. It will instantly stabilize and start rebuilding our economy. It will also do away with the present tax code and at very least drastically minimize the power, bureaucracy and over-lording of the IRS, as it replaces not just reforms the present taxation system.
The truth is that the IRS is still the No. 1 enemy of your pocketbook. Who doesn't fear an IRS audit? It's the only federal agency before which you are considered guilty until proven innocent. It can't be overhauled or even reformed (Congress' attempts have failed). The best answer is to abolish the IRS, sweep away the present tax code, (all 66,000 plus pages) and implement a flat or FairTax that lives up to its name – a simple consumptive-based tax system in which equity rules and from which no one can dodge or evade their dues. As Mike Huckabee says, "Wouldn't it be nice if April 15 were just another sunny spring day?"
The Internal Revenue Service wasn't started until nearly a hundred years after the Revolutionary War in 1862 as the Bureau of Internal Revenue. Its creation coincided with the creation of the income tax, which it was designed to collect. Both were the work of President Lincoln and Congress, which saw them as necessary to pay for Civil War expenses.
It is interesting to note, however, that the income tax law was revoked 10 years later, revived in 1894 and then ruled by the Supreme Court as unconstitutional in 1895. Yet in 1913 it became law through the 16th Amendment – just 100 years ago. Ever since then, the income tax has deprived families of their rightful earnings, restricted our liberties and deprived our economy of money that could be invested in productive enterprises.
And for those naysayers who say the IRS is too big to fail or be overturned, think again about the power of the people in this last election cycle and this one fact: It won't be the first time a Goliath has fallen.
In short, the FairTax does away with all taxes and puts in their place a single consumptive (fair) tax, which is the closest, practical, modern proposal to the taxation system favored by America's founders. They did not penalize productivity through taxes the way we do today. They had no Internal Revenue Service. They believed in minimal taxation.
- They did not pay income taxes, which were prohibited by the Constitution;
- They did not pay export taxes, which were also prohibited by the Constitution;
- But they did tax imports. The founders believed in free trade within our own borders and a system of tariffs on imported goods.
The majority of founders were opposed to domestic taxes. They regarded high taxes and aggressive tax collectors as tyrannical and always to be guarded against. Patrick Henry warned:
Excisemen may come in multitudes; for the limitation of their numbers no man knows. They may, unless the general government be restrained by a bill of rights, or some similar restriction, go into your cellars and rooms, and search, ransack, and measure, everything you eat, drink, and wear." [Was that a prophetic statement?]
Our founders fought for a far less oppressive system than in Britain. And though some taxes were levied on early Americans for some consumptives, the burden of taxation was laid largely upon tariffs (imports) for the first roughly 150 years of our republic until the inception of the income tax in 1913. For them the yoke of taxes remained upon foreigners, not American citizens. As Jefferson shared with Gouverneur Morris in 1793, "It must be observed that our revenues are raised almost wholly on imported goods."
The debt and taxation chaos we face today was a matter of profound concern to all our founders. Most felt that no taxes should be perpetual, rather temporary, because of the temptation to abuse that taxation power. Thomas Jefferson spoke for most when he said, "Taxes should be continued by annual or biennial reenactments, because a constant hold, by the nation, of the strings of the public purse is a salutary restraint from which an honest government ought not wish, nor a corrupt one to be permitted, to be free."
If the Founding Fathers were alive today, I truly believe they would support the FairTax. As James Madison said, "Taxes on consumption are always least burdensome, because they are least felt, and are borne too by those who are both willing and able to pay them; that of all taxes on consumption, those on foreign commerce are most compatible with the genius and policy of free
States."
That's a system that makes sense to me. It is a system designed to preserve individual liberty and encourage productivity (through no income taxes and no discouragement of domestic production) while choosing to keep taxes as painless as possible (by taxing foreign imports). And it wouldn't require an organization the size of the Internal Revenue Service to run it.
That is why I say that all of Congress needs to answer today the question Thomas Jefferson asked at the dawn of our republic: "Would it not be better to simplify the system of taxation rather than to spread it over such a variety of subjects and pass through so many new hands?"
We don't need more tax reform – at least as it has been minimally defined in the past. What we need is a tax revolution! And the FairTax will provide it. If we all jump on the FairTax band wagon and demand our representatives implement such a taxation system, we can economically restore our nation and make the financially impossible become possible again.
I believe the new majority in Congress should take up a tax replacement system just as the last majority took up Obamacare. Obamacare will take billions of dollars from taxpayers while the FairTax would put billions back in their pockets.
Friends, we must keep fighting. We've changed the tides in Washington. Now we must crash the waves of reform upon its powers. Educate yourself about the FairTax by going to FairTax.org. If others are not familiar with it, introduce the FairTax to various political groups in your area, including one of the 2,800 tea-party gatherings across the country. And also call the president and your representatives and convey to them your passion on the issue. (The phone number for representatives and senators is 202-224-3121, and the president's is 202-456-1414.)
Benjamin Franklin once said, "In this world nothing can be said to be certain, except death and taxes." It's high time we changed that saying to read, "In this world nothing can be said to be certain, except death and a FairTax."