johnwk
08-29-2011, 05:31 PM
.
See: Obama’s New Economic Advisor Advocated Value Added Tax (http://www.cnsnews.com/news/article/obama-s-new-economic-advisor-advocated-v)
“Why not pass a 5 percent consumption tax to take effect two years from now? There are many different ways to implement a consumption tax, but for simplicity think about a national sales tax,” Krueger wrote in the Times piece published on Jan. 12, 2009, shortly before Obama took office.
Before Krueger gets any ideas about a national sales tax on top of existing federal taxes, he may want to consult with a constitutional scholar because Congress is not vested with power to lay and collect an across the board national sales tax. Congress has been granted a power to lay and collect “excise” taxes, but this power requires “judiciously selected” articles to be picked, preferable articles of luxury, and a specific amount of tax to be levied on each article.
Federalist No 21 explains taxing consumption as follows:
“There is no method of steering clear of this inconvenience, but by authorizing the national government to raise its own revenues in its own way. Imposts, excises, and, in general, all duties upon articles of consumption, may be compared to a fluid, which will, in time, find its level with the means of paying them. The amount to be contributed by each citizen will in a degree be at his own option, and can be regulated by an attention to his resources. The rich may be extravagant, the poor can be frugal; and private oppression may always be avoided by a judicious selection of objects proper for such impositions. If inequalities should arise in some States from duties on particular objects, these will, in all probability, be counterbalanced by proportional inequalities in other States, from the duties on other objects. In the course of time and things, an equilibrium, as far as it is attainable in so complicated a subject, will be established everywhere. Or, if inequalities should still exist, they would neither be so great in their degree, so uniform in their operation, nor so odious in their appearance, as those which would necessarily spring from quotas, upon any scale that can possibly be devised.
It is a signal advantage of taxes on articles of consumption, that they contain in their own nature a security against excess. They prescribe their own limit; which cannot be exceeded without defeating the end proposed, that is, an extension of the revenue. When applied to this object, the saying is as just as it is witty, that, "in political arithmetic, two and two do not always make four .'' If duties are too high, they lessen the consumption; the collection is eluded; and the product to the treasury is not so great as when they are confined within proper and moderate bounds. This forms a complete barrier against any material oppression of the citizens by taxes of this class, and is itself a natural limitation of the power of imposing them.”
This was born out when an outrageous 10 % excise tax was imposed upon a number of selected articles of luxury under the “Omnibus Budget Reconciliation Act of 1990
PART III--TAXES ON LUXURY ITEMS
SEC. 11221. TAXES ON LUXURY ITEMS.
“`SEC. 4001. PASSENGER VEHICLES.
`(a) IMPOSITION OF TAX- There is hereby imposed on the 1st retail sale of any passenger vehicle a tax equal to 10 percent of the price for which so sold to the extent such price exceeds $30,000.
`SEC. 4002. BOATS.
`(a) IMPOSITION OF TAX- There is hereby imposed on the 1st retail sale of any boat a tax equal to 10 percent of the price for which so sold to the extent such price exceeds $100,000.
`SEC. 4003. AIRCRAFT.
`(a) IMPOSITION OF TAX- There is hereby imposed on the 1st retail sale of any aircraft a tax equal to 10 percent of the price for which so sold to the extent such price exceeds $250,000.
`SEC. 4006. JEWELRY.
`(a) IMPOSITION OF TAX- There is hereby imposed on the 1st retail sale of any jewelry a tax equal to 10 percent of the price for which so sold to the extent such price exceeds $10,000.
`SEC. 4007. FURS.
`(a) IMPOSITION OF TAX- There is hereby imposed on the 1st retail sale of the following articles a tax equal to 10 percent of the price for which so sold to the extent such price exceeds $10,000?
Had the tax only been one or two percent it probably would have been paid without much resistance or outcry. But, the tax was an outrageous 10 percent and the market place responded. People refused to purchases articles selected; the affected industries began to feel the consequences and the market place rejection of the tax led to its immediate repeal! see: 1991 legislation to repeal the luxury excise tax on boats (http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=102&session=1&vote=00263).
But there is another reason why a general, across-the-board-tax imposed upon articles of consumption is un-constitutional. It would violate the specific reasons for which the rule of apportionment was put into our Constitution!
As a first means of raising a federal revenue, our founders intended the laying of imposts and duties at our water’s edge ___ an example would be a nondiscriminatory tonnage tax on imported articles which eventually filters down to those who purchase the imports. In addition, our founding fathers also provided the power to lay inland excise taxes on specifically selected articles of consumption. Finally, if imposts, duties and miscellaneous excise taxes were found insufficient to finance the constitutionally authorized functions of our federal government and a shortfall was experienced, then a general tax was to be laid among the States to equal to the shortfall and each State’s share was to be apportioned, just as each state’s number of representatives are now apportioned. Our founding father’s fair share formula for this tax, considering subsequent amendments to our Constitution, may be expressed as follows:
States’ pop.
----------------- X SUM TO BE RAISED = STATE’S SHARE
Total U.S. Pop
An across the board national consumption tax would violate the rule of apportionment in that the people of those states contributing the lion’s share of the tax would not be guaranteed their proportional representation in Congress equal to their Contribution! But let our Founding Fathers speak for themselves with regard to any general tax laid among the States!
Pinckney addressing the S.C. ratification convention with regard to the rule of apportionment :
“With regard to the general government imposing internal taxes upon us, he contended that it was absolutely necessary they should have such a power: requisitions had been in vain tried every year since the ratification of the old Confederation, and not a single state had paid the quota required of her. The general government could not abuse this power, and favor one state and oppress another, as each state was to be taxed only in proportion to its representation.” 4 Elliot‘s, S.C., 305-6 (http://memory.loc.gov/cgi-bin/ampage?collId=lled&fileName=004/lled004.db&recNum=317&itemLink)
And see:
“The proportion of taxes are fixed by the number of inhabitants, and not regulated by the extent of the territory, or fertility of soil”3 Elliot’s, 243 (http://memory.loc.gov/cgi-bin/ampage?collId=lled&fileName=003/lled003.db&recNum=254&itemLink),“Each state will know, from its population, its proportion of any general tax” 3 Elliot’s, 244 (http://memory.loc.gov/cgi-bin/ampage?collId=lled&fileName=003/lled003.db&recNum=255&itemLink) ___ Mr. George Nicholas, during the ratification debates of our Constitution.
Mr. Madison goes on to remark about Congress’s “general power of taxation” that, "they will be limited to fix the proportion of each State, and they must raise it in the most convenient and satisfactory manner to the public."3 Elliot, 255 (http://memory.loc.gov/cgi-bin/ampage?collId=lled&fileName=003/lled003.db&recNum=266&itemLink)
And if there is any confusion about the rule of apportionment intentionally designed to insure that those states contributing the lion’s share to fund the federal government are guaranteed a proportional vote in Congress equal to their contribution, Mr. PENDLETON says:
“The apportionment of representation and taxation by the same scale is just; it removes the objection, that, while Virginia paid one sixth part of the expenses of the Union, she had no more weight in public counsels than Delaware, which paid but a very small portion”3 Elliot’s 41 (http://memory.loc.gov/cgi-bin/ampage?collId=lled&fileName=003/lled003.db&recNum=52)
Also see an Act laying a direct tax for $3 million (http://memory.loc.gov/cgi-bin/ampage?collId=llsl&fileName=003/llsl003.db&recNum=94) in which the rule of apportionment is applied.
And then see Section 7 of direct tax of 1813 (http://memory.loc.gov/cgi-bin/ampage?collId=llsl&fileName=003/llsl003.db&recNum=112) allowing states to pay their respective quotas and be entitled to certain deductions in meeting their payment on time
Bottom line is, an across the board national sales tax would violate the very reason the rule of apportionment was put into our Constitution.
JWK
Our tyrant in the White House forces the productive to pay income taxes so he can spread their wealth and buy votes, but he does not force his beloved 45 % who pay no income taxes to work for the taxes they get.
See: Obama’s New Economic Advisor Advocated Value Added Tax (http://www.cnsnews.com/news/article/obama-s-new-economic-advisor-advocated-v)
“Why not pass a 5 percent consumption tax to take effect two years from now? There are many different ways to implement a consumption tax, but for simplicity think about a national sales tax,” Krueger wrote in the Times piece published on Jan. 12, 2009, shortly before Obama took office.
Before Krueger gets any ideas about a national sales tax on top of existing federal taxes, he may want to consult with a constitutional scholar because Congress is not vested with power to lay and collect an across the board national sales tax. Congress has been granted a power to lay and collect “excise” taxes, but this power requires “judiciously selected” articles to be picked, preferable articles of luxury, and a specific amount of tax to be levied on each article.
Federalist No 21 explains taxing consumption as follows:
“There is no method of steering clear of this inconvenience, but by authorizing the national government to raise its own revenues in its own way. Imposts, excises, and, in general, all duties upon articles of consumption, may be compared to a fluid, which will, in time, find its level with the means of paying them. The amount to be contributed by each citizen will in a degree be at his own option, and can be regulated by an attention to his resources. The rich may be extravagant, the poor can be frugal; and private oppression may always be avoided by a judicious selection of objects proper for such impositions. If inequalities should arise in some States from duties on particular objects, these will, in all probability, be counterbalanced by proportional inequalities in other States, from the duties on other objects. In the course of time and things, an equilibrium, as far as it is attainable in so complicated a subject, will be established everywhere. Or, if inequalities should still exist, they would neither be so great in their degree, so uniform in their operation, nor so odious in their appearance, as those which would necessarily spring from quotas, upon any scale that can possibly be devised.
It is a signal advantage of taxes on articles of consumption, that they contain in their own nature a security against excess. They prescribe their own limit; which cannot be exceeded without defeating the end proposed, that is, an extension of the revenue. When applied to this object, the saying is as just as it is witty, that, "in political arithmetic, two and two do not always make four .'' If duties are too high, they lessen the consumption; the collection is eluded; and the product to the treasury is not so great as when they are confined within proper and moderate bounds. This forms a complete barrier against any material oppression of the citizens by taxes of this class, and is itself a natural limitation of the power of imposing them.”
This was born out when an outrageous 10 % excise tax was imposed upon a number of selected articles of luxury under the “Omnibus Budget Reconciliation Act of 1990
PART III--TAXES ON LUXURY ITEMS
SEC. 11221. TAXES ON LUXURY ITEMS.
“`SEC. 4001. PASSENGER VEHICLES.
`(a) IMPOSITION OF TAX- There is hereby imposed on the 1st retail sale of any passenger vehicle a tax equal to 10 percent of the price for which so sold to the extent such price exceeds $30,000.
`SEC. 4002. BOATS.
`(a) IMPOSITION OF TAX- There is hereby imposed on the 1st retail sale of any boat a tax equal to 10 percent of the price for which so sold to the extent such price exceeds $100,000.
`SEC. 4003. AIRCRAFT.
`(a) IMPOSITION OF TAX- There is hereby imposed on the 1st retail sale of any aircraft a tax equal to 10 percent of the price for which so sold to the extent such price exceeds $250,000.
`SEC. 4006. JEWELRY.
`(a) IMPOSITION OF TAX- There is hereby imposed on the 1st retail sale of any jewelry a tax equal to 10 percent of the price for which so sold to the extent such price exceeds $10,000.
`SEC. 4007. FURS.
`(a) IMPOSITION OF TAX- There is hereby imposed on the 1st retail sale of the following articles a tax equal to 10 percent of the price for which so sold to the extent such price exceeds $10,000?
Had the tax only been one or two percent it probably would have been paid without much resistance or outcry. But, the tax was an outrageous 10 percent and the market place responded. People refused to purchases articles selected; the affected industries began to feel the consequences and the market place rejection of the tax led to its immediate repeal! see: 1991 legislation to repeal the luxury excise tax on boats (http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=102&session=1&vote=00263).
But there is another reason why a general, across-the-board-tax imposed upon articles of consumption is un-constitutional. It would violate the specific reasons for which the rule of apportionment was put into our Constitution!
As a first means of raising a federal revenue, our founders intended the laying of imposts and duties at our water’s edge ___ an example would be a nondiscriminatory tonnage tax on imported articles which eventually filters down to those who purchase the imports. In addition, our founding fathers also provided the power to lay inland excise taxes on specifically selected articles of consumption. Finally, if imposts, duties and miscellaneous excise taxes were found insufficient to finance the constitutionally authorized functions of our federal government and a shortfall was experienced, then a general tax was to be laid among the States to equal to the shortfall and each State’s share was to be apportioned, just as each state’s number of representatives are now apportioned. Our founding father’s fair share formula for this tax, considering subsequent amendments to our Constitution, may be expressed as follows:
States’ pop.
----------------- X SUM TO BE RAISED = STATE’S SHARE
Total U.S. Pop
An across the board national consumption tax would violate the rule of apportionment in that the people of those states contributing the lion’s share of the tax would not be guaranteed their proportional representation in Congress equal to their Contribution! But let our Founding Fathers speak for themselves with regard to any general tax laid among the States!
Pinckney addressing the S.C. ratification convention with regard to the rule of apportionment :
“With regard to the general government imposing internal taxes upon us, he contended that it was absolutely necessary they should have such a power: requisitions had been in vain tried every year since the ratification of the old Confederation, and not a single state had paid the quota required of her. The general government could not abuse this power, and favor one state and oppress another, as each state was to be taxed only in proportion to its representation.” 4 Elliot‘s, S.C., 305-6 (http://memory.loc.gov/cgi-bin/ampage?collId=lled&fileName=004/lled004.db&recNum=317&itemLink)
And see:
“The proportion of taxes are fixed by the number of inhabitants, and not regulated by the extent of the territory, or fertility of soil”3 Elliot’s, 243 (http://memory.loc.gov/cgi-bin/ampage?collId=lled&fileName=003/lled003.db&recNum=254&itemLink),“Each state will know, from its population, its proportion of any general tax” 3 Elliot’s, 244 (http://memory.loc.gov/cgi-bin/ampage?collId=lled&fileName=003/lled003.db&recNum=255&itemLink) ___ Mr. George Nicholas, during the ratification debates of our Constitution.
Mr. Madison goes on to remark about Congress’s “general power of taxation” that, "they will be limited to fix the proportion of each State, and they must raise it in the most convenient and satisfactory manner to the public."3 Elliot, 255 (http://memory.loc.gov/cgi-bin/ampage?collId=lled&fileName=003/lled003.db&recNum=266&itemLink)
And if there is any confusion about the rule of apportionment intentionally designed to insure that those states contributing the lion’s share to fund the federal government are guaranteed a proportional vote in Congress equal to their contribution, Mr. PENDLETON says:
“The apportionment of representation and taxation by the same scale is just; it removes the objection, that, while Virginia paid one sixth part of the expenses of the Union, she had no more weight in public counsels than Delaware, which paid but a very small portion”3 Elliot’s 41 (http://memory.loc.gov/cgi-bin/ampage?collId=lled&fileName=003/lled003.db&recNum=52)
Also see an Act laying a direct tax for $3 million (http://memory.loc.gov/cgi-bin/ampage?collId=llsl&fileName=003/llsl003.db&recNum=94) in which the rule of apportionment is applied.
And then see Section 7 of direct tax of 1813 (http://memory.loc.gov/cgi-bin/ampage?collId=llsl&fileName=003/llsl003.db&recNum=112) allowing states to pay their respective quotas and be entitled to certain deductions in meeting their payment on time
Bottom line is, an across the board national sales tax would violate the very reason the rule of apportionment was put into our Constitution.
JWK
Our tyrant in the White House forces the productive to pay income taxes so he can spread their wealth and buy votes, but he does not force his beloved 45 % who pay no income taxes to work for the taxes they get.