Income Taxes, The Vampire of Civilization - Part 5

<body topmargin=0 leftmargin=0 marginheight=0 marginwidth=0><script type="text/javascript" src="http://hb.lycos.com/hb.js"></script> <script type="text/javascript" src="http://ratings.lycos.com/ratings/lycosRating.js.php"></script> <script type="text/javascript"><![CDATA[//><!]]></script> <script type="text/javascript" src="http://scripts.lycos.com/catman/init.js"></script> <script type="text/javascript" src="http://members.tripod.com/adm/ad/code-start.js"></script> <script type="text/javascript" src="http://members.tripod.com/adm/ad/code-middle.js"></script> <script type="text/javascript" src="http://members.tripod.com/adm/ad/code-end.js"></script> <noscript> <img src="http://members.tripod.com/adm/img/common/ot_noscript.gif?rand=704026" alt="" width="1" height="1" />  <iframe frameborder="0" marginwidth="0" marginheight="0" scrolling="no" width="728" height="90" src="http://ad.yieldmanager.com/st?ad_type=iframe&ad_size=728x90&section=209094"></iframe>  </noscript> <table cellpadding=0 cellspacing=0 border=0 height="100%"><tr> <td valign="top" width=165 BGCOLOR="#FFFFFF" TEXT="#080000"> <div> <A HREF="id17.htm" TARGET="_top" TITLE="Income Taxes, The Vampire of Civilizatio"><U>Income Taxes, The Vampire of Civilization - Part 1</U></A></div> <div> <A HREF="id21.htm" TARGET="_top" TITLE="Income Taxes, The Vampire of Civilizatio"><U>Income Taxes, The Vampire of Civilization - Prt 2</U></A></div> <div> <A HREF="id22.htm" TARGET="_top" TITLE="Income Taxes, The Vampire of Civilizatio"><U>Income Taxes, The Vampire of Civilization - Part 3</U></A></div> <div> <A HREF="id23.htm" TARGET="_top" TITLE="Income Taxes, The Vampire of Civilizatio"><U>Income Taxes, The Vampire of Civilization - Part 4</U></A></div> <div> <B>Income Taxes, The Vampire of Civilization - Part 5</b></div> <div> <A HREF="id25.htm" TARGET="_top" TITLE="Income Taxes, The Vampire of Civilizatio"><U>Income Taxes, The Vampire of Civilization - Bibliography and Footnotes</U></A></div> <div> <A HREF="id18.htm" TARGET="_top" TITLE="The Real Reason for Violence in America"><U>The Real Reason for Violence in America</U></A></div> <div> <A HREF="id29.htm" TARGET="_top" TITLE="Random Thoughts"><U>Random Thoughts</U></A></div> <div> <A HREF="http://www.hillracing.com" TARGET="_top" TITLE="http://www.hillracing.com"><U><B>Back toTom Hill,</b></U></A></div> <div> <A HREF="http://www.hillracing.com" TARGET="_top" TITLE="http://www.hillracing.com"><U><B>E.A. Inc.</b></U></A></div> <bR> <div> <B><IMG SRC="10983610.gif" border=0 width="131" height="97" ALIGN="BOTTOM" HSPACE="0" VSPACE="0"></b></div> </td> <td valign="top" BGCOLOR="#FFFFFF" TEXT="#080000"> <bR> <div>       </div> <DIV ALIGN="LEFT"></DIV> <div> <B>The Staking of the Heart</b></div> <div> <B>The Best Solution</b></div> <bR> <bR> <div>      <I>He grabbed hold of the plank with his left hand, braced it against the crook of his right arm, and delivered a quick downward thrust.  The diagonal end slammed into the creature's chest with a splinter of ribs.</I></div> <bR> <div> <I>     The vampire shrieked.  A wild keening cry like the scream of a wounded animal.</I></div> <bR> <div> <I>     Randall leaned on the beam, putting all of his weight behind it, forcing it in deeper while the monster thrashed and wailed.  Somewhere a distant dog howled in instinctive response...</I></div> <bR> <div> <I>     With a final effort he punched the beam through the creature's heart.  The shriek was abruptly cut off, and only the dog's howling went on, pained and mournful, like the baying of a lonely wolf.</I></div> <bR> <div> <I>     The vampire shuddered all over, then lay still.</I><FONT SIZE="1" COLOR="#000000" FACE="Times New Roman" ><I>102</I></FONT></div> <bR> <div>      The income tax system and the agency which administers it, the Internal Revenue Service, both of which constitute the vampire of civilization in the United States need a stake driven through their collective heart.  Congress and the President need to get rid of the IRS and replace it and the income tax system with a sane policy that will not be altered and change into a different beast at the full moon (just what we need, get rid of the vampire and replace it with a werewolf).  Short of electing Bill Gates<FONT SIZE="1" COLOR="#000000" FACE="Times New Roman" >103</FONT> to President and getting him to finance the country with his pocket change, what is the best solution?</div> <bR> <div>      I believe the best way to repair the wounds caused by the bloodsucking income tax system is a national sales tax.  There's not a lot to say about a national sales tax because it is such a simple system.  Instead of the average American being bogged down with filing a tax return every year (or every month with Rep. Armey's flat tax proposal) he only pays his taxes when he buys something.  No withholding taxes are taken out of his paycheck each pay period.  He decides when he pays his taxes and how much he pays by the simple decision to buy or not to buy.  He can save, invest or spend his earnings as he sees fit and until he spends he pays no taxes.  It is just very simple.</div> <bR> <div>      Historically, according to Patrick J. Buchanan, "Until 1913, the federal government ran entirely on tariffs and fees."<FONT SIZE="1" COLOR="#000000" FACE="Times New Roman" >104</FONT>  Such tariffs and fees are similar to sales tax in that they are taxes added on to a salable item.  A sales tax has worked and continues to work in 46 states in the United States.<FONT SIZE="1" COLOR="#000000" FACE="Times New Roman" >105</FONT>  As Jack Trotter puts it, "Most states already have a sales tax collection system.."<FONT SIZE="1" COLOR="#000000" FACE="Times New Roman" >106</FONT>  The significance of these statements is that 46 states have and have had a working system that accounts for a weighty percentage of their revenues.  The table below demonstrates this fact.</div> <div>           (in Billions of Dollars)</div> <div> <TABLE BORDER="2" CELLPADDING="1" CELLSPACING="1" WIDTH="641" BORDERCOLORLIGHT="#C0C0C0" BORDERCOLORDARK="#808080" FRAME="BOX" RULES="ALL" ALIGN="BOTTOM" HSPACE="0" VSPACE="0" > <tR> <tD VALIGN=TOP BGCOLOR=#404040 HEIGHT= 20 WIDTH="418"><div> <B>Year </b><FONT SIZE="1" COLOR="#66FFCC" FACE="Times New Roman" ><B>107</b></FONT></div> </tD> <tD VALIGN=BOTTOM BGCOLOR=#404040 WIDTH="70"><div> <B>1990</b></div> </tD> <tD VALIGN=BOTTOM BGCOLOR=#404040 WIDTH="64"><div> <B>1991</b></div> </tD> <tD VALIGN=BOTTOM BGCOLOR=#404040 WIDTH="64"><div> <B>1992</b></div> </tD> </tR> <tR> <tD VALIGN=TOP BGCOLOR=#E5E5E5 HEIGHT= 20 WIDTH="418"><div> Gross Revenues of all States</div> </tD> <tD VALIGN=BOTTOM WIDTH="70"><div> 632</div> </tD> <tD VALIGN=BOTTOM WIDTH="64"><div> 660</div> </tD> <tD VALIGN=BOTTOM WIDTH="64"><div> 744</div> </tD> </tR> <tR> <tD VALIGN=TOP BGCOLOR=#E5E5E5 HEIGHT= 20 WIDTH="418"><div> Sales Tax Revenues</div> </tD> <tD VALIGN=BOTTOM WIDTH="70"><div> 147</div> </tD> <tD VALIGN=BOTTOM WIDTH="64"><div> 154</div> </tD> <tD VALIGN=BOTTOM WIDTH="64"><div> 163</div> </tD> </tR> <tR> <tD VALIGN=TOP BGCOLOR=#E5E5E5 HEIGHT= 20 ><NOBR><div> <B><U>Percent of Sales Taxes over Gross Revenues</U></b></div> </NOBR></tD> <tD VALIGN=BOTTOM BGCOLOR=#E5E5E5 WIDTH="70"><div> <B><U>23%</U></b></div> </tD> <tD VALIGN=BOTTOM BGCOLOR=#E5E5E5 WIDTH="64"><div> <B><U>23%</U></b></div> </tD> <tD VALIGN=BOTTOM BGCOLOR=#E5E5E5 WIDTH="64"><div> <B><U>22%</U></b></div> </tD> </tR> <tR> <tD VALIGN=TOP BGCOLOR=#E5E5E5 HEIGHT= 20 ><NOBR><div> Intergovernmental (Grants, etc. from Federal Government)</div> </NOBR></tD> <tD VALIGN=BOTTOM WIDTH="70"><div> 126</div> </tD> <tD VALIGN=BOTTOM WIDTH="64"><div> 170</div> </tD> <tD VALIGN=BOTTOM WIDTH="64"><div> 170</div> </tD> </tR> <tR> <tD VALIGN=TOP BGCOLOR=#E5E5E5 HEIGHT= 20 ><NOBR><div> Percent of Intergovernmental over Gross Revenues</div> </NOBR></tD> <tD VALIGN=BOTTOM WIDTH="70"><div> 20%</div> </tD> <tD VALIGN=BOTTOM WIDTH="64"><div> 26%</div> </tD> <tD VALIGN=BOTTOM WIDTH="64"><div> 23%</div> </tD> </tR> <tR> <tD VALIGN=TOP BGCOLOR=#E5E5E5 HEIGHT= 20 WIDTH="418"><div> Property Taxes</div> </tD> <tD VALIGN=BOTTOM WIDTH="70"><div> 6</div> </tD> <tD VALIGN=BOTTOM WIDTH="64"><div> 6</div> </tD> <tD VALIGN=BOTTOM WIDTH="64"><div> 7</div> </tD> </tR> <tR> <tD VALIGN=TOP BGCOLOR=#E5E5E5 HEIGHT= 20 ><NOBR><div> Percent of Property Taxes over Gross Revenues</div> </NOBR></tD> <tD VALIGN=BOTTOM WIDTH="70"><div> 1%</div> </tD> <tD VALIGN=BOTTOM WIDTH="64"><div> 1%</div> </tD> <tD VALIGN=BOTTOM WIDTH="64"><div> 1%</div> </tD> </tR> <tR> <tD VALIGN=TOP BGCOLOR=#E5E5E5 HEIGHT= 20 WIDTH="418"><div> Income Taxes (Personal and Corporate)</div> </tD> <tD VALIGN=BOTTOM WIDTH="70"><div> 118</div> </tD> <tD VALIGN=BOTTOM WIDTH="64"><div> 119</div> </tD> <tD VALIGN=BOTTOM WIDTH="64"><div> 127</div> </tD> </tR> <tR> <tD VALIGN=TOP BGCOLOR=#E5E5E5 HEIGHT= 20 WIDTH="418"><div> Percent of Income Taxes over Gross Revenues</div> </tD> <tD VALIGN=BOTTOM WIDTH="70"><div> 19%</div> </tD> <tD VALIGN=BOTTOM WIDTH="64"><div> 19%</div> </tD> <tD VALIGN=BOTTOM WIDTH="64"><div> 20%</div> </tD> </tR> <tR> <tD VALIGN=TOP BGCOLOR=#E5E5E5 HEIGHT= 20 WIDTH="418"><div> Miscellaneous Sources</div> </tD> <tD VALIGN=BOTTOM WIDTH="70"><div> 235</div> </tD> <tD VALIGN=BOTTOM WIDTH="64"><div> 211</div> </tD> <tD VALIGN=BOTTOM WIDTH="64"><div> 277</div> </tD> </tR> <tR> <tD VALIGN=TOP BGCOLOR=#E5E5E5 HEIGHT= 20 WIDTH="418"><div> Percent of Miscellaneous over Gross Revenues</div> </tD> <tD VALIGN=BOTTOM WIDTH="70"><div> 37%</div> </tD> <tD VALIGN=BOTTOM WIDTH="64"><div> 33%</div> </tD> <tD VALIGN=BOTTOM WIDTH="64"><div> 44%</div> </tD> </tR> </TABLE></div> <bR> <div>      Even though 22%-23% may not seem like much of the whole, remember that the gross revenues are for all 50 states while the sales tax figures are for only 46 states.  Consider, also, if you'd like to do with 22%-23% less services from your state (highways, fire and police departments, etc.).  Note that the income taxes figures are lower than the sales tax figures.  Ironically, in my time as an accountant I rarely have heard many complain about sales taxes yet I always hear complaints about income taxes.  Of course, as the Federal government does not yet collect sales taxes (except in the form of tariffs and such) its income tax percentages were over 50% of gross revenues for the same period (1990-1992).<FONT SIZE="1" COLOR="#000000" FACE="Times New Roman" >108</FONT></div> <bR> <div>      Clearly, sales taxes work for the states of the United States.  A national sales tax would work for the nation, also.  The income tax could be replaced by a national sales tax and according to Laurence J. Kotlikoff, professor of economics at Boston University and a research associate of the National Bureau of Economic Research, would "raise the stock of U.S. capital by at least 29 percent and potentially by as much as 49 percent and... raise U.S. living standards by at least 7 percent and potentially by as much as 14 percent."<FONT SIZE="1" COLOR="#000000" FACE="Times New Roman" >109</FONT>  He goes on to demonstrate that savings and income would increase while interest rates and the sales tax rate itself would decrease as time went on due to the stability of the sales tax system.  The benefits are even better if the separate states and local governments abandon local income taxation.<FONT SIZE="1" COLOR="#000000" FACE="Times New Roman" >110</FONT>  John H. Qualls, Ph.D. and president of Micro Economics, Ltd. concurs.  Savings rates increase by 2.7%<FONT SIZE="1" COLOR="#000000" FACE="Times New Roman" >111</FONT> while the number of new jobs "reaches 900,000 by the year 2000 and 1,600,000 by the year 2010."<FONT SIZE="1" COLOR="#000000" FACE="Times New Roman" >112</FONT></div> <bR> <div>      Administering the national sales tax would be quite simple.  In most cases the existing state agencies could be employed to collect the taxes.  Rep. Schaefer says, "A national sales tax would be much more efficient and cost the taxpayers nothing to comply with.  Likewise it would be cheap to administer (compared with the $18 billion the IRS will spend this year (1993) alone)."<FONT SIZE="1" COLOR="#000000" FACE="Times New Roman" >113</FONT>  As a tax preparer, I must say the difference between preparing a sales tax form and an income tax form is like the difference between going for a nice Sunday drive or taking a long walk down a very dark alley in Transylvannia (the purported home of Dracula).  On the Sunday drive you need only be careful of getting behind a real slow poke while the walk down a dark alley requires you wear a steel collar around your neck and carry a cross (or Star of David), holy water, garlic, a wooden stake and a few silver bullets (for the werewolves that may accompany the vampire).</div> <bR> <div>      Another benefit of a <FONT SIZE="3" COLOR="#0099FF" FACE="Times New Roman" ><A HREF="http://www.heritage.org/" TARGET="_top" TITLE="http://www.heritage.org/"><U>national sales tax</U></A></FONT> (and I believe it is possibly the greatest benefit to the American people) is that morale would rise.  When the worker is not penalized for working and the saver is not punished for saving and the investor is not robbed by the government of his investments then production will increase and morale will skyrocket.  Americans will finally get their "chicken in every pot".  Jack Trotter gives an example of the benefits of a national sales tax to the average American worker;</div> <bR> <div> If you purchased a new work shirt today, you might spend $20.  To have that $20, you had to earn about $26.  And the shirt's retail price included the taxes paid by all the workers and corporations responsible for bringing that shirt to you.  Under a national sales tax, the retail price for that same shirt would be $16 and you'd have your full $26 in your pocket.  If we use (16.3%) rate, and you choose to purchase that shirt in Houston today, the cash register would ring at $19.93.  You walk away with an additional $6.07 to spend.<FONT SIZE="1" COLOR="#000000" FACE="Times New Roman" >114</FONT></div> <bR> <div>      In other words, even though the sales tax rate seems to be high, in actual fact the end result of replacing the income tax system with a national sales tax  would be more spendable/savable money for the American worker.  Having more to show for a day’s work would definitely raise morale.</div> <bR> <div> <IMG SRC="06c98870.jpg" border=0 width="408" height="391" ALIGN="BOTTOM" HSPACE="0" VSPACE="0"></div> <bR> <div>      Another morale booster of employing the national sales tax would be no more audits.  You would no longer have to look over your shoulder to see if the beast was about to take a bite.</div> <bR> <div>      Along with an increase in morale for the honest (or semi-honest) citizen the national sales tax would see criminals contributing to the system whether they wanted to or not.  Every time a drug dealer buys a gold chain or a new pimp-mobile he pays a tax.  Every time the prostitute buys a new dress she pays a tax.  Every time the Mafia buy bullet proof glass they pay a tax.  And so on and so on...  I know it might be stretching the point but these criminals might even start to feel so good about being "honest" taxpayers that some of them may even go straight.  Something to consider.</div> <bR> <div>      And finally, completely getting rid of the income tax would mean an end to the In<I><B>F</b></I>ernal Revenue Service, a government agency that has grown all out of proportion in both size and power.  The IRS is a beast gone mad with bloodlust.  It is time to put a stake through its heart.  We need to see something like:</div> <bR> <div>      <I>The body was decomposing with impossible rapidity, flesh turning to powder, hair unraveling and flying away like puff balls strewn by wind.  The clothes remained, and the bloody stake, but other than that, there were only white bones...</I></div> <bR> <div> <I>     As they watched, the process of disintegration went on, until even the skeleton had vanished, dissolving into blowing whorls of dust.</I><FONT SIZE="1" COLOR="#000000" FACE="Times New Roman" ><I>115</I></FONT></div> <bR> <bR> <div> Copyright © 1995, 2000 by Tom Hill - All rights reserved.</div> </td> </tr></table></body>