As Federal Spending continues to skyrocket, and the deflation of the American Dollar worsens while the Federal Reserve keeps pumping fiat money into our weakened economy (while deceptively telling us we are in an economic recovery), we have come to the conclusion as Americans that something needs to be done about the madness. Taxation overburdens individuals, and businesses. The IRS has become the strong-arm of the federal government, being used to target Tea Party, and other, conservative opposition to the Obama administration. And, the IRS is being used to enforce the mandate that all Americans must purchase health insurance, or be fined.
Shutting down the IRS, which would restore the 4th Amendment of the Constitution to some semblance of a recognizable form (you know, that stuff about illegal search and seizure?), would be something all Americans could get on board with. The Fair Tax is a proposed national consumption tax that proponents state would put the IRS out of business. Advantages include a rate that is equitable across the board based on consumption rather than production or income, persons like Paris Hilton would pay into the tax system, and federal withholding and the Internal Revenue Service would become a thing of the past.
Opponents to the Fair Tax argue that a national sales tax would reduce consumer spending, the rate could still be easily manipulated by the federal government (and still target the successful segment of the population with a "luxury tax" provision), and the danger of an oppressive Value Added Tax (V.A.T.) may also be instituted, ultimately increasing our overall tax burden. Some have argued that a Fair Tax may reduce revenue, and place the operation of the national government in jeopardy, while others argue that a Flat Tax would be a better vehicle for making the taxation of the American People more fair and equitable.
Be it our current tax system with federal withholding and a progressive tax rate championed by historical figures like Karl Marx, The Fair Tax (national consumption tax), or The Flat Tax (an equal tax rate across the board), the reality is that all three are examples of "Direct Taxation*." The 16th Amendment to the United States Constitution allows the direct taxation of the American People, regardless of any census or enumeration. Prior to the 16th Amendment, taxation was accomplished in an indirect manner, taxing producers, imports and exports, and The States based on their population percentage of the overall national population. Under the former system, prior to the 16th Amendment, the federal government functioned in a satisfactory manner, accomplishing all of the constitutionally authorized functions it was tasked with. . . and the federal government accomplished its duties without a direct taxation against the people. Granted, there were other factors that also contributed to the practicability of our system prior to direct taxation. Federal Spending was lower than it is now, unconstitutional spending was minimal, and local governments handled the majority of local expenses (such as infrastructure, social welfare programs, education, and regulations regarding businesses).
The Fair Tax, or the Flat Tax, are both steps in the right direction, but neither of them offer the final solution for returning our government to a system that functions in a manner that is both a contributor to a prosperous economy, and in line with the original constitutional foundation of our American System. In addition to changing our tax system, we must reduce federal spending, return federal spending and federal activity within the limitations authorized by the United States Constitution, close the Federal Reserve, and repeal the 16th Amendment so that direct taxation of any kind by the federal government is a thing of the past.
The National Debt each year is exceeding 100% of Gross Domestic Product (GDP). Current Federal Spending is at 35% of GDP. Federal Spending around 1890, prior to the 16th Amendment, was below 3% of GDP. Federal Tax Revenue has exceeded $1 Trillion, yet we have a federal government complaining about a lack of revenue, and the federal deficit continues to increase at an alarming rate. In 2010 the federal government collected $2.2 trillion in total revenue, income tax being the largest single source for revenue. In 2013 the total income tax revenue by the federal government (this is not counting Social Insurance Taxes, Ad valorem Taxes, Fees and Charges, and Other Revenue) was $1.6 trillion. All other revenue in 2013 totaled $1.2 trillion. In 1993, and all years prior, total federal revenue was $1.2 trillion or lower. According to some research my friend Tim "Loki" Kerlin and I worked on prior to his death December 21, 2013, if we were to eliminate all unconstitutional spending by the federal government at this instance, our total federal spending level would drop below 5% of GDP, a level comparable to what it was a century ago. . . prior to the creation of the IRS, the ratification of the 16th Amendment (a ratification that remains in question based on evidence that not enough States actually ratified it), and prior to the creation of the Federal Reserve.
Tax reform through concepts like The Fair Tax, and the Flat Tax, are definitely steps in the right direction, but without reducing the federal government to only constitutionally authorized spending, those ideas are only band-aids on a gaping wound. However, if we address the root of the problem, out of control federal spending that completely disregards the United States Constitution, we can eliminate direct taxation completely, repeal the 16th Amendment, shut down the Federal Reserve, stop the process of our government printing fiat money, and reap the benefits of an invigorated free market as well as a federal government that operates within its constitutional limitations.
-- Political Pistachio Conservative News and Commentary
* Direct Taxation - A government levy on the income, property, or wealth of people or companies. A direct tax is borne entirely by the entity that pays it, and cannot be passed on to another entity. (From the Glossary in "The Basic Constitution: An Examination of the Principles and Philosophies of the United States Constitution."
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