“It’s time to scrap the IRS and create an equitable tax system”

The non-partisan article (written by yours truly) explained how income and property taxes were illogical, unfair and prone to chaos and corruption. My revolutionary thesis proposed replacing invasive taxes with a simple excise or national sales tax.
In retrospect, anytime we grant government the power to tax income or property, individual freedom becomes a temporary illusion. Such intrusive taxes should not exist in a country that professes “liberty and justice for all.” With these tools in place, the State can slowly tax its way to absolute power. Once deprived of civil rights, our children and grandchildren might one day find themselves shackled under a new mode of serfdom and subject to the tyrannical whims of an elite oligarchy.
Can any government be trusted with direct taxing power? History says absolutely not! That is why our Founding Fathers, in their profound wisdom, drafted a Constitution that originally prohibited non-uniform, capitation (or head) taxes.

Karl Marx and the Income Tax
The graduated income tax was first promoted by Karl Marx in his Communist Manifesto of 1848. For those unfamiliar with political history, Marx was opposed to freedom and democracy. According to his Communist creed, the Sate would become supreme and citizens would become dependent upon the State for all their needs. Under Marx’s peculiar vision, traditional concepts such as private property and economic freedom were considered obstacles to the creation of a supreme State. For Communism to succeed such basic rights would have to come to an end.
In pursuance of his objective, Marx introduced the idea of the graduated income tax as a major plank in his manifesto. Like a choker chain, an income tax would enable the State to thoroughly manage and control it’s subjects while robbing them of the fruit of their labor.
He also proposed a central banking monopoly as another major plank for establishing Communist power.
Karl Marx was clearly a man without a soul. His Communist caste system has been tried and failed. His propositions are diametrically opposed to the American way of life. That is why a lot of brave Americans have spilled blood and died to stop the specter of communism, yet it continues to linger somehow, like a ghost in the attic.
It was during the administration of Woodrow Wilson, who was surrounded by Marxist advisors such as Edward Mandel House, that two of the major planks of the Communist Manifesto were railroaded into law. The Federal Reserve Act created a central banking monopoly and the 16th Amendment authorized an income tax. This diabolical combination has drastically altered the meaning and spirit of our U.S. Constitution. The moment these planks became law is when “We the People” began to lose control over our destiny.
Today, after millions of bankruptcies, home foreclosures, bank takeovers and corporate crashes, all due to a spendthrift government, Marx’s socialist vision seems to be creeping into reality. But it is not too late to reverse the direction. We still have a chance to preserve our American legacy by demanding reform of our national tax code.

“Vigilance is the price of liberty!”
We owe it to our children and grandchildren to take immediate action. In order to preserve liberty and save the economy we must first establish a single tax that will satisfy all the elements of thrift, efficiency, simplicity, uniformity and fairness. The only way to do that is to replace Marx’s income tax with a national sales or excise tax.
A sales tax is the only tax that is fair and uniform because everyone pays the same percentage. With a national sales tax you can determine how much tax you pay by the way you spend your money. If you decide to save or invest your money, you would pay no tax at all. And in spite of the false claims of Marxism, a sales tax is not regressive but progressive because wealthier citizens who spend the most will be taxed the most. To make it even more progressive, luxuries and vices could be taxed at a higher rate than basic necessities such as food and medicine…which could be tax free. And sales taxes are easiest to compute and collect. So all the positive elements mentioned before are therefore satisfied. You simply can’t do that with an income tax or a property tax. It’s mathematically impossible.

Economic Results
The elimination of the income tax would create the biggest stimulus in U.S. history. It would supercharge the purchasing power of millions of workers. Imagine taking home your gross paycheck free of deductions. Such a big raise would quickly translate into a greater demand for products and greater savings. Multiply that times every worker in America and the economy would go… BOOM!
By eliminating payroll taxes, millions of American businesses would be free from non-productive paperwork and unnecessary accounting costs. The elimination of payroll taxes would lower the price of American products at home and overseas and enable us to better compete in foreign markets. The resulting drop in prices will most likely absorb and neutralize the initial impact of a national sales tax.
Abolishing Marx’s income tax would also enable our government to excuse thousands of IRS bureaucrats, engaged in non-productive arithmetic. Their Gestapo days of terrorizing hard working Americans would come to an end. And due to the increased business activity sparked by abolishing income taxes, the government would actually reap more revenue from the sales tax. The combination of less bureaucracy and more revenue should enable them to balance the federal budget and pay down the national debt.
Replacing the income tax with a sales tax right now would send positive shockwaves across the marketplaces of America. It would make life much easier for everyone including our government. It’s a win/win proposition.
After my article appeared, numerous phone calls came in from readers supporting my thesis. One kind gentleman sent a letter to the editor to nominate me for U.S. President. I must admit, it was good for my spirit and ego. There were also suggestions to organize a political action committee, but I had no free time to become politically active again. My intent was to introduce the idea in the hope that someone with political muscle might read it and take it to heart.

Birth of the Fair Tax Movement
Today it appears the idea has caught on in a big way. In 1995 a group of Houston businessmen, led by Leo E. Linbeck, Jr., spent millions of dollars to conduct academic research on the subject. Their positive findings compelled them to launch the Fair Tax movement.
I was unaware of this until I started following Mike Huckabee’s campaign for President. Apparently the Fair Tax movement made great progress in Iowa during the Presidential primary. Huckabee learned about the Fair Tax movement while campaigning in Iowa and he immediately adopted the plan. In his recent book, “Do The Right Thing,” he attributes his success in Iowa to his position on the Fair Tax Plan and gives it some of the credit for his amazing second place finish behind John McCain.
And now a bill to enact the Fair Tax into law is pending before Congress. It is gradually attracting co-sponsors from both sides of the aisle. And Missouri, the “Show Me State,” has become the first test case. They recently replaced their state income tax with the Fair Tax.
I’m very excited by all this. Could it be possible that my letter to the editor, published here in Little Rock, was the tiny spark that ignited the Fair Tax movement? I certainly like to think so. One should never underestimate the power of the pen. It can sometimes alter the course of history.
http://www.FairTax.org
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Someone WAY at the top of the blog says that the Fair Tax is a less visible tax than the current system. Please look into what an embedded tax is, and realize that since the Fair Tax is collected at purchase… it’s on your receipt. If you can hold onto a receipt, then you can see how much tax you pay with the Fair Tax.

Vance saying that the Fair Tax should be thrown out on the second line because the Fair Tax isn’t about saving us tax dollars is absurd. First, he must have missed the part in the book about the Trillions (with a T) of dollars that will pour into our economy with the implementation of the Fair Tax. Second, I guarantee you that if Vance wanted to throw out the Fair Tax just because it didn’t save us tax dollars; he never got past a page of Nietzsche.

From the economic perspective of the employer it matters not one whit whether the dollars he expends to purchase manhours of labor go to his employees or to the government – but most entrepreneurs I know would rather leave the money on a bus than remit it to Uncle Sam, philosophically speaking.

“Vince, Yes, I did say withholding for SS and Medicare will go directly into people’s pockets rather than going directly to Uncle Sam.

This is true. With the FairTax it goes directly from employers hands to employees hands. With Income tax it goes directly from your employers hands to Uncle Sam’s. ”

And Mikey says;

“I don’t see payroll taxes as a sales tax on labor, increasing the costs to the employer. Rather, they are a burden born entirely
by the sellers of labor.The fact that the taxes
are collected and remitted to the gov. on behalf of the workers, by the firm, is what misleads some people.But there is no difference to the economy
if workers were responsible for paying.
If Say’s Law is valid for labor,an income tax on wage earners should not cause unemployment.”

How do we reconcile the two statements?

Once he understands what that means, he’ll understand how this tax is revenue neutral, extracting the same amound from private spending, without any “grace period” for tax-payers (they just shift the tax load towards the final good sellers).

Well who cares. You are still hallucinating that I’m Vince and that your numbers actually mean something, even when law of supply and demand – as well as income tax statistics deny everything you say. Your statements are outside of the science of economics and well within psychopathology. Get help, ok?

I wonder how Vince knew Sasha was a Slavonic male name?

Just having fun with you Sasha.

Any tax at all is a transfer of wealth from a productive person to a parasite. I could only advocate a reduction in parasitic taxing and spending; the precise form of it seems of small consequence to me. (I hope that doesn’t offend anyone here).

A payroll tax or any other tax results in an increase in consumption; parasites always only consume; they never invest. Therefore, it strikes me taxation always tends to diminish economic progress by diminishing capital investment and productivity and so move us in the direction of poverty and starvation. Whether we keep ourselves busily employed during that process isn’t as interesting to me as avoiding the theft and the waste of wealth and prosperity that we labor for in the first place.

The point of my posts here is just to analyze how the economy actually adjusts to an introduction of a new general sales tax. When I first read Rothbard’s discussion of it, i was fascinated and enthralled to find that a detailed analysis of a general sales tax did not render an intuitive conclusion: i.e. a sales tax is simply a tax on factor income. I always love that sort of thing.

But what i also later found pretty exciting was to find that i think i have improved on Rothbard’s analysis. That sounds kind of arrogant, but that is why i put it out here in case someone either thinks 1. I haven’t added anything to what he said, or 2. i’m just wrong, 3. We’re both wrong or 4. Eureka! I’ve provided a new and additional insight.

If the FairTax were to go into affect, you are correct. Savings prior to the FairTax is with after tax dollars, which is a crime in itself. If Vince Sasha is reading this I want to make it clear what I just said. I didn’t say the FairTax was a crime, I said it is a crime that our current savings is with after tax dollars. If you spend those dollars on anything other than education, they will be taxed again. I could care less about my savings, it’s the future savings that my children will accumulate that concerns me more. With the FairTax, their savings will be with before tax dollars, if they allow their interest to accumulate; their savings will grow at a much faster rate than with our current tax system.

Here goes the mathematician again. Let’s assume you have a $50,000 annual income and you save 10% of your net earnings each year for 10 years. Let’s further assume, you allowed the interest to compound. Let’s see what your balance would be under each method of taxation. This is going to be a tough one for Sasha Vince to follow, but here goes. I will compound the interest yearly rather than daily so they might be able to follow along.

Let’s first look at what you would have at the end of 10 years with our income tax system. Let’s use an average case scenario of someone in the 15% tax bracket. After withholdings for income taxes, S.S. and Medicare, they could save $3867.50 of their $5000. Remember saving with our income tax system is with after tax dollars. One year’s interest would be $193.37. Next year you deposit another $3867.50 into your account and by the end of the second year it has accumulated to $8327.74. If you want to check my figures for the remaining 8 years you will find out at the end of 10 years you will have accumulated $51,077.16. But remember, if the savings wasn’t in either a tax deferred account such as an annuity or a tax free bond account, you will pay income taxes on the interest even though it was left to accumulate.

Now let’s look at the accumulation after 10 years with the FairTax. Since it is before tax savings you are able to deposit the full $5000 each year. At the end of year one, you will have $5250; at the end of two years you will have $10762.50 and at the end of 10 years you will have accumulated $66,033.93. Yes, if you go and spend the whole accumulation on a new car and 23% will go to Uncle Sam. Oh I forgot according to Sasha Vince it wouldn’t be 23 of your savings; it would be 30% of the car dealerships revenue.

PS
Outside of your Ghetto, where females are named Shaquonda, Anaconda, Fanta, Misha, Kasha… – Sasha is actually Slavonic male name, etymologically derived from Alexander (like Bill is from William, Dick from Richard).

PPS
Is there some kind of moderation on this blog, to sweep-off Fred’s garbage? Jeffrey?

Now I know he, she has gone looney . I think you are reversing the role of the taxing methods here.

Gee Vince how did you know sasha was a man. Sasha is usually a woman’s name.