JAMES PLAIR: 21ST CENTURY TAXATION – TIME FOR A CHANGE
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 be permitted, to be free. Thomas Jefferson, letter to John Wayles Epps, June 24, 1813.
To take from one, because it is thought his own industry and that of his fathers has acquired too much, in order to spare to others, who, or whose fathers, have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, the guarantee to everyone the free exercise of his industry and the fruits acquired by it. Thomas Jefferson, letter to Joseph Milligan, April 6, 1816.
There must have been a real and pressing reason why the writers of the Constitution prohibited an individual personal income tax under Article I, Section 8, Clause 1. And there was! Many of the patriots had come over from England and other European countries, or were mostly second-generation citizens, where the ruling government was in the hands of kings, emperors, and other despots. They knew first hand how these sovereigns over-taxed their “subjects” to the extent that the “common folk” were kept in virtual poverty. In the Declaration of Independence it is written about the many abuses and usurpations of the present King of England, George III, followed by these words: “For imposing taxes on us without our Consent”. Unless you were a member of the gentry, those who had nobility and titles, you had no say in how you were governed. It is doubtful that even the “chosen” had much to say as well. They, the elite, went along with the excesses of their sovereign in order to retain their exalted positions. In fact, they were expected to do the actual taxation of their subjects and share most of what they collected with the king or emperor.
If there is a valid reason and purpose for imposing a federal income tax on the earnings of the workers of this Nation, then there must be an equally valid and properly proposed and ratified amendment to the Constitution. In such an amendment to Clause 1, Section 8 of Article I, it should be spelled out exactly how this tax will be executed. Under the present federal income tax system it is neither honest nor fair to those it tax. The Internal Revenue Service has been given powers way beyond what the Constitution intended the federal government to have. The code is so gross (over 70,000 pages) that not even IRS agents can adequately advise citizens on any tax questions that are ask of them. Therefore, assuming that a case can be made for a federal income tax, the first order of business would be to scrap the present code and present to the people a new method of taxation. It is essential that you, as a voting citizens and taxpayer, to remind your representatives that you expect them to reform the current system. This is a big task as taxation gives those we send to congress the power that too many seek.
There is currently one proposal that has been in committee of both houses of Congress since 1999. In the House it is H.R. 25, The Fair Tax Act of 2009. There is also a companion bill in the Senate as S. 296. A full copy of the House Bill can be found at:
http://thomas.loc.gov/cgi-bin/query/z?c111:H.R.25
This site is Thomas - Library of Congress Legislation Research Tool and one may download the full text of H.R. 25.
Exactly what is the FairTax?
Briefly, the FairTax Act of 2009 (with only 79 pages) is a comprehensive proposal that replaces all federal income and payroll based taxes with an integrated approach including:
* A progressive national retail sales tax.
* A prebate to ensure no American pays federal taxes on spending up to the
the poverty level.
- Dollar-for-dollar federal revenue neutrality.
- * Repeal of the 16th Amendment through companion legislation.
Space does not permit a through discussion of the Fair Tax, but complete information may be found at:
In addition, I recommend reading the following book on the Fair Tax, which can in found in most libraries or from your local bookstore or on-line book outlets:
THE FAIRTAX BOOK, by Neal Boortz and Congressman John Lender. THE FAIRTAX: THE TRUTH, also by Boortz & Lender.
THE FAIRTAX SOLUTION, by Ken Hoagland
Originally I leaned towards the FLAT TAX Plan proposed by Steve Forbes, but after studying the Fair Tax Plan, the Flat Tax Plan was only a partial solution to the current system and still under the IRS. It did not eliminate the IRS, which is reason enough the Fair Tax Act of 2009 should be implemented as our federal tax system in the 21st Century!
In February of 2009, the Senate and House passed the most expensive legislation in the history of this Nation, which was President Obama’s economic stimulus package to “save” the economy from a catastrophe. Whether this package will work or not will not be known for two to five years. The Fair Tax Act would have been the best stimulus and it would not have cost the taxpayer one red cent.
Here are 10 facts why the Fair Tax Plan would have stimulated the economy quickly and without the spending of over a trillion dollars (including interest):
1. The Fair Tax will create jobs where the current system destroys jobs. By stripping out hidden federal income taxes and compliances costs, the Fair Tax makes U.S. goods more competitive overseas and more affordable at home, thereby sharply increasing job creation while sharply reducing our balance of payments deficit.
2. The Fair Tax gives wage earners their whole paycheck. No Federal withholding! What you earn, you get.
3. The Fair Tax eliminates Social Security withholding; the most regressive tax of all, while ensuring the system fulfills its promise to one generation without being a terrible burden on the next.
4. The Fair Tax eliminates the corporate taxes and cost of compliance hidden in both wholesale and retail prices.
5. The Fair Tax dramatically lowers the effective tax rates for lower and middle incomes; a rebate ends taxes up to the poverty level.
6. The Fair Tax allows families to save more and faster for home ownership, education, and retirement.
7. The Fair tax allows homeowners to pay their entire house payment with pretax dollars, a great improvement over the current home interest deduction.
8. The Fair Tax frees up time wasted on filling out cumbersome and inscrutable IRS forms throughout the economy to the tune of $250 billion or more (about three percent of GDP),
9. The Fair Tax raises the same amount of revenue for the federal government and is revenue neutral.
10. The Fair Tax ABOLISHES THE IRS!
Either the Flat Tax or the Fair Tax would require, I believe, a Constitutional amendment to rescind Amendment XVI, which changed Clause 1, Section 8 of Article I of the Constitution. The amendment should be written in a clear text so there will be no need for any misinterpretation of the taxable powers of the congress. A definite tax rate should be set, such as 17% under a Flat Tax, and 23% under the Fair Tax and no increase should be allowed except in a time of national emergency (such as an armed conflict), and that it would take a 2/3 majority vote by Congress to approve any increase, and then for no longer than a twelve month period.
Remember the words of Thomas Jefferson at the beginning of this article:
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 be permitted, to be free.
James B. Plair, Lt. Col. (USAR-Ret.)
Author of A Study of the United States Constitution
and the Federalist Papers
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