With all due respect, let me speculate that while you were in college you certainly did not study our Constitution’s original tax plan as our founders intended it to operate. If you had, I do not believe you would assert “indirect taxes are equally as evil as direct taxes.”
I read the entire constitution, and I still assert the same opinion. What difference does the form in which they steal your money make? It is just a petty nitpicking of the inevitable. With a fixed flat tax, the government gets an equal portion of everyone's income and nothing more. It is fair and easy to budget, and will still save you close to 40% of what you are currently paying in taxes. In fact, I wouldn't be the least bit surprised if you even realize how much you pay in taxes, and when you do it. A fixed flat rate is straight forward and fair, indirect taxing is unfair and often hidden. What is more evil, bluntness or deception?
Congress is granted power to lay and collect internal “excise” taxes. This power, as intended by our founders allows Congress to lay and collect a tax upon specifically chosen articles of consumption, preferable specifically selected articles of luxury.
Hamilton stresses in Federalist No 21 regarding taxes on articles of consumption:
“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 counter balanced 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.”
Let us say for conversation purposes that Congress is only allowed to raise its revenue by selecting specific articles of luxury and placing a specific amount of tax on each article selected. The flow of revenue into the federal treasury under such an idea would of course be determined by the economic productivity of the nation. If the economy is healthy and thriving and employment is at a peak, the purchase of articles of luxury will be greater than if the economy is stagnant and depressed. And thus, Congress is encouraged to adopt policies favorable to a healthy and vibrant economy because the flow of revenue into the federal treasury can be disrupted should Congress adopt oppressive regulations which impeded and burden our founderÂ’s intended free market system.
And so, if Congress is limited to raising its revenue by taxing specifically selected articles of luxury, it suddenly becomes in CongressÂ’ best interest to work toward a healthy and vibrant economy which in turn produces a productive flow of revenue into the federal treasury! It should also be noted that taxing any specific article too high, will reduce the volume of its sales and diminish the flow of revenue into the national treasury, and thus, taxing in this manner allows the market place to determine the allowable amount of tax on each article selected as Hamilton indicates above.
The same efforts to productivity would be true under a fixed flat direct tax, the income of the government would be solely dependent on economic prosperity at a flat tax rate of 10% of income. A key problem that I have with taxes on the articles of consumption is it allows Congress to legislate without passing legislation, and the best example of this is in cigarettes. It would be relatively hard for Congress to ban smoking altogether, although clearly not impossible as we nearly have no freedoms left in this country, however with the ability to apply taxes on articles of consumption they may purposefully overtax the product in order to influence the market as they see it fit. This is an inescapable consequence of indirect taxing, just as the waste that is the prohibition of drugs is the inescapable consequence of the Commerce Clause. In giving Congress the ability to legislate over inter-state commerce, consequently our founding fathers handed Congress the key to taking freedoms as they please. After studying the constitution I have found it is not even close to a perfect document, and our founding fathers were not right 100% of the time, they just had the right idea. They laid down a great foundation for a prosperous nation, but they also left gaps for Congress to over reach.
I suppose that's what I get for reading whilst I reply, but yes some would make such claims and I am obviously of that sector, moving on. ;D
But let us take a closer look at the consequences involved if Congress should attempt to abuse this power. If Congress should abuse the system and tax one article while excluding another for political gain, consumers are treated to a tax free article and Congress reduces its own flow of revenue into the national treasury. In addition, for every penny lost by excluding a lobbyistÂ’s particular article from taxation, another articleÂ’s tax will have to be increased to reclaim that penny. And with each increase upon any specific article the reality of diminished sales becomes a very sobering factor for Congress to deal with as explained by Hamilton in Federalist No. 21.
Quite simply. this is not true. Political favoritism of this sort comes in the form of stifling competition, and the reality of what you would see is a high tax on any specific article of consumption, and consequently subsidies for the lobbyists to ensure their ability to maintain prices for the consumer, while the competition pays the tab. If you'd like to see this in action, look outside. It's going on all around you. With a flat tax, this would be impossible, and it would save everyone the hassle of a grossly overcomplicated tax code.
Finally, under our ConstitutionÂ’s original tax plan, let us remember that if Congress does not raise sufficient revenue from imposts, duties and miscellaneous excise taxes on specifically chosen article of consumption and spends more than is brought in which creates a deficit, it is at this time that the apportioned tax is to be used to extinguish the deficit created, and each stateÂ’s congressional delegation must return home with a bill in hand for its stateÂ’s apportioned share of this tax and place this burden upon their Governor and State Legislature, and would deplete their own stateÂ’s treasury.
The bottom line is, what do you think would happen if New York StateÂ’s big spending Congressional Delegation had to return home with a bill for New York to pay an apportioned share to extinguish the 2013 federal deficit? I kind of think tea parties would change to tar and feather parties and big spenders in Congress would
REAP THEIR JUST REWARDS for their irresponsible and tyrannical spending.
Why is it that not one of our “conservative” media personalities [Rush Limbaugh, Sean Hannity, Glenn Beck, Laura Ingraham, Schnitt, Mark Levin, Dennis Prager, Bill O'rielly, Mike Gallagher, Doc Thompson, Lee Rodgers, Neal Boortz, Mike Huckabee, Tammy Bruce, Monica Crowley, Herman Cain, etc.] will discuss the wisdom of our Constitution’s original tax plan, especially when it paved the way to not only control Congress, but created the economic underpinning which led to America becoming the economic marvel of the world?
Let us not forget by the year 1835, under our constitutionÂ’s original tax plan, America was manufacturing everything from steam powered ships, to clothing spun and woven by powered machinery and the national debt [which included part of the revolutionary war debt] was completely extinguished and Congress enjoyed a surplus in the federal treasury from tariffs, duties, and customs. And so, by an
Act of Congress in June of 1836 all surplus revenue in excess of $ 5,000,000 was decided to be distributed among the states, and eventually a total of $28,000,000 was distributed among the states by the rule of apportionment in the nature of interest free loans to the states to be recalled if and when Congress decided to make such a recall. Why do so many willingly ignore the wisdom of our founding fathers?
JWK
“…a national revenue must be obtained; but the system must be such a one, that, while it secures the object of revenue it shall not be oppressive to our constituents.”___ Madison, during the creation of our Nation’s first revenue raising Act
While in many parts I strongly agree with you, our only disagreement is on the morality of direct taxes versus indirect taxes. Taxes in their nature are a theft, and as such a necessary evil-- the question is to which degree. Indirect taxing simply leaves too much room for abuse, and there is no getting around it. On top of that issue, indirect taxing also bears the consequence of over complicating the tax code, also leaving much room for unfair practices as we see today.
When it comes to the blissful ignorance the majority of this country is in a state of, it really all comes down to money and competition. There are five major media corporations in this country, none of which want the public knowing what goes on behind closed doors. Politicians collect campaign contributions from these five media corporations, and are just as content with an ignorant population. The media corporations control their media personalities, and if one steps out of line there isn't much opposition to go work for. They don't want you to know anything, they want you to go to work, buy their products, and pay your taxes.
As for the founding fathers, they were very wise but that is not to be confused with perfect. This subject is the epitome of that point.