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(Sales) Taxation Is Theft
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A group of House Republicans is supporting legislation that would replace federal income, payroll, estate, and gift taxes with a 30 percent national sales tax. The bill also eliminates the Internal Revenue Service, giving states the responsibility to collect the sales tax and send the revenue to DC.

This deputizing of states to act as federal tax collectors violates the principles of federalism, especially since the plan forces states that have chosen not to make their residents pay sales taxes create a mechanism for collecting sales tax.

A 30 percent sales tax on all goods with no exceptions and no deductions will increase taxes imposed on millions of Americans. The sales tax legislation provides a way Americans can receive a monthly “prebate” payment to help offset the cost of the sales tax. Still, many taxpayers would be paying more under the new national sales tax system.

If the sales tax becomes law, Congress may never have to increase the rate above 30 percent. This is because it can rely on the Federal Reserve to increase the sales taxes via inflation. Consequently, this inflation tax will increase the pain inflicted by the sales tax on the American people.

The imposition of a national sales tax will lead to a flourishing black market for many goods. This will cause the government to increase surveillance of our purchases. It could also lead to government bureaucrats keeping lists of our purchases. This information could be abused by government officials to embarrass and punish political enemies. The surveillance could track whether an individual is complying with government dietary recommendations or is consuming “extremist” content. The need to ensure compliance with the tax laws may also be used to justify replacing cash with government issued and managed digital currency.

The proposed national sales tax rate is set at a high level because the bill’s sponsors did not want to reduce the federal government’s revenue. A big problem with tax reform occurs when it fails to include reductions in federal spending.

Unfortunately, even some libertarians get sucked into the DC game of ignoring the need to tie tax reform to reducing government spending. Instead, they focus on making the tax code more efficient. Even worse is if they make the supply-side argument that certain taxes should be cut to increase government revenue. Libertarians should view increasing government revenue as an unfortunate consequence of otherwise sound tax policy. They should advocate for tax cuts that are far beyond the point where tax cuts increase government revenue.

Some people support sales taxes because sales taxes discourage consumption and encourage savings and investment. While savings and investment are crucial to a free market, government policies should, to the greatest extent possible, be neutral between savings and consumption. Policies favoring savings distort the market just as do policies that encourage consumption.

Supporters of the free market who pursue various tax reform schemes without also working to cut spending are putting the cart before the horse. The American people will not be free from tax tyranny until government is returned to its constitutional limitations. This will not occur until enough people reject the welfare-warfare state and embrace the moral, as well as the practical, case for peace and liberty.

(Republished from The Ron Paul Institute by permission of author or representative)
 
• Category: Economics, Ideology • Tags: Taxation, Vat 
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  1. Rich says:

    Interesting idea, but it’ll never fly. Around 60% of Americans pay zero fed taxes. They would never agree to raise their own taxes.

    • Agree: follyofwar
    • Replies: @Observator
    , @HdC
  2. TG says:

    Why yes, sales taxes do discourage “consumption.” That is to say, sales taxes discourage the production of useful goods and services – because nothing can be produced if nobody will consume it. I am reminded of Malthus’s statement, that if everyone were limited to the meanest bread and water, nothing better will ever be produced. Of course, parasitic finance will get off scott-free.

    So a national sales tax will discourage things like manufacturing and farming and making movies and commercial airlines, and encourage credit default swaps and stock buy-backs and other pointless exercises in money chasing money. Why am I not enthusiastic?

    The rich have often insisted that poverty in the working classes is a good thing, because it encourages thrift. One wishes that the rich might also have their thrift encouraged.

    • Thanks: Bill Jones
  3. Jokem says:

    If this were done as a Constitutional Amendment, it might be worth exploring. It means an upper limit on taxes which Congress cannot exceed without approval of another amendment.

    • Replies: @Achmed E. Newman
  4. Ron, you’re assuming the best-case scenario. We all know they’d impose the sales tax and KEEP the income tax.

    • Replies: @Jokem
    , @Anonymous
  5. Durruti says:

    As an Anarchist, (Durruti), Statesman Ron Paul‘s headline

    (Sales) Taxation Is Theft

    caught my attention.

    The 3 key points in Paul’s article are On-the-Money (pun intended).

    1.

    A big problem with tax reform occurs when it fails to include reductions in federal spending.

    Without reductions in Federal spending (in our Nation so deeply in debt), the proposals constitute a Sham.

    And:

    2.

    The American people will not be free from tax tyranny until government is returned to its constitutional limitations.

    To accomplish the second, -return our government “to its constitutional limitations” we need to reverse the Coup d’état of November 22, 1963, (which destroyed our Republic – with its Constitution). That goal involves, more than just writing and reading informational/educational articles, (helpful as they are), but the Revolutionary Necessity of Returning the Bullets that assassinated our Last Constitutional President, John F. Kennedy, and rendered powerless, our Constitution. Only then, may we Restore Our Republic, with its Constitution. Only then may we have the POWER to set and enforce the “limitations.”

    Last, but not the least:

    3.

    This will not occur until enough people reject the welfare-warfare state and embrace the moral, as well as the practical, case for peace and liberty.

    The “welfare” is for the Oligarchs of the Military Financial Complex. And the “warfare” is for their profiteering. In 2023, our finest Statesman, Ron Paul, possesses the WISDOM to introduce the concept of “the moral” – of Morality, as a necessary component for the achievement of a world of “peace and liberty.” Yes: do what’s good, do what’s right, defend our country, defend those less fortunate than us. Morality is a Huge Concept. Who would have thought of it? And placed it in an article?

    Dr. Peter J. Antonsen – nom de guerre, Durruti

  6. Jokem says:
    @Fidelios Automata

    Not if it is done as a constitutional amendment.

  7. Sales tax is extremely regressive. There should be a yearly tax on worldwide net worth with 200% penalty and 5 years prison for evasion.

    • Replies: @follyofwar
  8. Alrenous says: • Website

    Now now, taxes are robbery. Theft is performed by stealth. The taxman says, “Pay me or I shoot you.”
    Fraudulent robbery that claims it’s stealing your property for your own good, so that you hesitate to resist. Why not smash the windows while you’re there? It will make everyone richer, right?

    If the sales tax becomes law

    It won’t, for the same reason you can’t do UBI. There are way too many sinecures based on the existing system. It would wipe out whole continents of graft, meaning the government itself will oppose any such change.

  9. @Rich

    This reminded me that in his 2012 campaign Mitt Romney complained that 46% of Americans paid no federal income tax. He failed to mention that before FDR, 96% of Americans paid no such tax. The first national income tax bill was passed during the Civil War as a temporary emergency fund raising measure (as was the first issue of federal paper money at the same time). It taxed incomes over $10,000 a year at 2.5%. This was when the average worker could get by in reasonable comfort on one five dollar gold piece a week. The tax was ruled unconstitutional in 1877, but paper money continued.

    In a wholly unrelated matter, Mitt Romney’s Belmont Mass. home was advertised in the local paper this week for rent at $25,000 a month. As George Carlin observed, the big problem is that we keep voting for these rich c***ckers who don’t give f** about us.

    • Agree: Achmed E. Newman
    • Replies: @Rich
  10. bj0311 says:

    I know a guy who owns his own store(s). I asked him how much the state pays him for collecting their sales tax and he told me–nothing. I said what you should do is keep that money as a jar full of pennies and if the state wants their tax they can come pick it up. Forced labor without compensation is slavery and not even the state is allowed to do that without a conviction.

  11. Anonymous[261] • Disclaimer says:
    @Fidelios Automata

    Oh Boy! The rich love the idea of a sales tax replacing the income tax. A sales tax is much less merciless than an income tax – after all – if your income drops, your income tax drops; if you give away your income your income tax drops: if you suffer grievous harm, your income tax drops;, even if you die, your income tax goes away
    None of that has any effect upon your sales tax – as long as you live and eat – your sales tax hangs on. Even if you die, there will be sales tax on your funeral.
    I live in West Virginia (The State of Ignorance). Our multi-millionaire Governor (who always owes on his federal income tax) is trying to convince the dumb hillbillies that they will benefit from converting from a mixed tax base to strictly a sales tax based one. The dummies will probably fall for it.
    And you can bet your sweet ass that with a total sales tax, will come the “cashless” economy – so the Government will know every thin dime you do own. The rich will have “smart-assed” lawyers figuring out how to buy what they want quietly and sales-tax free – you won’t be that likely.
    I’m ready for a bloodless Revolution – are you?

    • Replies: @Achmed E. Newman
  12. @Jews Rock!

    An increase in the sales tax punishes young people trying to start a family. They need to buy all sorts of things for themselves and their children and then must pay a 30% sales tax on top of it. Not to mention high housing costs. It would be just another disincentive to have children, which is already a serious problem, especially for whites who will pay most of the tax.

    OTOH, it will be a boon for boomers and senior citizens, who are the wealthiest demographic in the country and have little need to buy new things except for groceries. I can’t think of any tax more regressive.

    If the plan is to eliminate cash purchases, since bills say it is “legal tender for all debts public and private,” wouldn’t a Constitutional Amendment need to be passed to do away with cash? I can’t see that ever happening.

    • Replies: @Justvisiting
    , @Bill Jones
  13. Rich says:
    @Observator

    The problem is, even if you vote for a decent guy, once he gets in office someone shows up with a suitcase full of cash, another guy hires his brother or cousin or wife and the third guy tells him to play ball or risk everything. The US has become almost completely corrupted. Beginning to remind me of the old Ottoman Empire.

    • Agree: The Real World
  14. Cowboy says:

    These whacking off scenarios are interesting to speculate over until you realize the reach around will never come.

  15. HdC says:
    @Rich

    Since when did our elected “betters” ever worry about the wishes of the great unwashed?

    • Replies: @Achmed E. Newman
  16. @HdC

    Some of the people who pay ZERO tax are pretty damned washed, HdC. Those are the ones who don’t have “0” on the bottom line, but with all the monetary shenanigans they do, none of us, washed or not, could ever get through all their tax forms.

  17. @Jokem

    I read somewhere, Jokem, that there was to be an upper limit written into Amendment XVI, but the writers of it figured “Oh, c’mon, this is only gonna apply to a very few rich people! Don’t need it.”

    As for the gist of this post, I would be very wary seeing this done. What they do locally is cut down one type of tax, say property tax, and let you know they’re making it up with another type (sales tax). Then, the sales tax increase stays, and the property tax ratchets right back up. Then, you repeat, as most of the voters have not paid to any of it.

    That said, if there could magically be solid laws that couldn’t be hacked by activist judges, then I’d go for sales tax over the rest – I’ll explain in another comment. But, no, not at 30-freaking percent!) Dr. Paul is correct that spending should be cut drastically. No, that won’t actually happen until the dollar goes down the toilet. (It will.)

    * See also Part 2 and Part 3 of the series.

    • Replies: @Jokem
    , @Achmed E. Newman
  18. @Anonymous

    Sorry, I disagree. Here’s my list of 3 basic tax methods based on egregiousness, worst to better.

    1) Property Tax
    2) Income Tax
    3) Sales Tax.

    1) You may have scrimped and saved to pay off your house 15 years ago, and you paid for all your vehicles with cash. Sorry, sucker, you owe money EVERY year, and the amounts are only prone to getting higher, never lower. That’s until you die. Otherwise, Government takes your shit.

    2) It’s the most complicated, which I HATE HATE HATE. It’s not just for this reason I hate the complexity of it, but that complexity works better for the rich and powerful, while the little man doesn’t have the time and money to work all the loopholes. Income tax can be avoided by people working under that table. I! LIKE! THIS! Even if you are all legit, at least when you retire, you don’t have to keep paying.

    3) Same thing about off the books here. People who barter or sell off the record don’t pay. The more self-reliant one is, the lower amount of these taxes he will pay. I’m not for using taxes as incentives for anything, but the consumption throw-away society we have not is not a good thing.

    Regarding the Income Tax again, in that Part 3 on the income tax from Peak Stupidity has in it “The 5 Evils of a personal income tax”. You’d be surprised that the ACTUAL MONEY is only # 2 in the list:

    David Letterman style – worst last:

    1) Regulatory Burden
    2) Privacy
    3) Social Programming
    4) The Money
    5) The FLOW of the money. (That is where the loss of States’ Rights comes into the picture.)

    Keep in mind, in terms of incentives, people and businesses get taxed one way or another. If business doesn’t pay the sales tax, they pay income tax and property tax and have to pass this on to you just the same.

    • Replies: @Jokem
  19. E_Perez says:

    Obviously, 30% is absurd and will have enormous impact on the economy.

    On the other hand, sales tax is the only tax everybody pays, even the hundred thousands pouring in on the US southern borders. That alone is an argument for sales taxes.

  20. Jokem says:
    @Achmed E. Newman

    I don’t see any upper limit on my copy of the 16th Amendment.
    I do agree the amendment needs to be written in boiler plate.
    And 30% is too high.

  21. Jokem says:
    @Achmed E. Newman

    Many states exempt some things from sales tax, like food and medicine.
    Also, many only tax retail sales.

    • Agree: Achmed E. Newman
  22. FifthDim says:

    Income tax is a theft to the individual effort. I work my a** off the whole year but have an invisible buddy wasting my money and looking forward to suck from my effort like a leech, a disrupted symbiosis that only benefits one side of the partnership.

    • Agree: HdC
  23. Achmed E. Newman: “1) Property Tax …”

    These appear to be characteristic of any technological civilization, even the most primitive, going all the way back to 6,000 BC.

    You can have a Lord, you can have a King, but the man to fear is the tax assessor. ~ Anonymous citizen of Lasgash

    https://www.iaao.org/uploads/A_Brief_History_of_Property_Tax.pdf

    In America, one of the earliest motivations for property tax was to fund public education. For example, the Puritans funded the establishment of Harvard College in 1636, appropriating for this purpose a sum in excess of all the taxes laid on the entire colony in a single year.

    https://www.home-school.com/Articles/forgotten-american-history-puritan-education.php

    One hundred and forty years later, the Revolutionary War was substantially funded by property tax.

    https://eh.net/encyclopedia/history-of-property-taxes-in-the-united-states/

    The only solutions appear to be things people aren’t willing to do: either to abolish government completely and permanently, or become poor enough to live on public lands, with the hope of falling beneath the notice of the regime, perhaps in a wilderness somewhere.

    • Replies: @Ash_G
  24. Mac_ says:

    Though personal basic position is shouldn’t be any govt or state as it baits people to be juvenile and irresponsible, and others to become vile tyrants as proven over and over, on tax scheme the cons depend on selfishness, same as ignoring false wars and bailouts etc, and by displacing others in the wake of selfish ignorance creates more division, as those assuming they ‘have’ anything from fake house value or other junk they bought, sit assuming ‘got theirs’, dont care younger people don’t have same choices they did, as tax would initially affect younger people such as in buying car or bike when already dealing with quadruple costs, shelter, food, gas.

    On one hand see scheme to use selfishness of the false ‘haves’ (don’t realy have anything you can’t defend) and resentment by others, to crash the false haves, would be very deserved, though will also come with destruction of last of freedom, of anyone but the vile cons.

    Though article more fed, scheme as if to shift to ‘states would only be image to pretend ‘change’ as if ‘state cons doing different, but would be the same conjobs. The predatory situations in face everywhere already, as people fail to focus local.

    Appreciate the article including the surveilance subject people ignore though shouldn’t.
    Important facts.
    .

  25. @follyofwar

    it will be a boon for boomers and senior citizens

    Senior citizens have a lot more control over their expenses than young working families–and if they are clever about it can minimize their income subject to income tax to get just enough to cover those expenses.

    I was stunned to see what my numbers looked like after the monthly mortgage payment went away…

    Young people are going to get burnt either way.

    One interesting example is the purchase of a car.

    You need enough income to buy it. You pay a sales tax on the purchase and then a property tax on it every year.

    Young people tend to drive a lot–especially if they have to cart kids around to different activities. That means they need a highly reliable car–and will need to keep replacing it every few years.

    Senior citizens don’t have to do much driving at all–so they can nurse an old car for many many years.

    The young people with kids are hurt badly by any tax system.

  26. @Achmed E. Newman

    Should be:

    Then, you repeat, as most of the voters have not paid attention to any of it.

    That’s not just a goof, but it changed the whole meaning.

    For Jokem, read the 1st paragraph again.

  27. Ash_G says:
    @Dr. Robert Morgan

    The property tax is by far the most just tax, as Henry George proved. Specifically, the portion levied on unimproved land, and not improvements. There’s no legitimate way to parcel out indefinitate claims to the exclusive use of the portions of the planet’s surface. To the extent a government is involved, logically, the government should act impartially in the favor of the citizens, which means that those given the privilege of exclusive use of some portion of the area under its control should compensate the rest of the citizenry at a market value for that privilege. This obviously neccessitates all manner of government buearacracy, but that’s the nature of the system in any case. The idea that there should be whole nations of people that control an area of land and just give them, one off, in perpetuity to random citizens is ridiculous if you consider the thing for more than two seconds.

  28. eah says:

    In Europe it’s often called (or translated into English as) a ‘value added tax’, and is generally much higher than in the US — in German the name is Mehrwertsteuer, and for most products it is 19% (Mehrwertsteuerrechner) — for products deemed basic necessities (Grundbedarf), it is 7%, which is still as high as most retail, non-food sales taxes in the US.

    Imagine paying 19% tax on nearly everything you buy.

    • Replies: @Jokem
  29. Jokem says:
    @eah

    Imagine paying 19% tax on nearly everything you buy.

    With money you save by not paying an Income Tax…

    • Replies: @eah
  30. eah says:
    @Jokem

    Uhh, nearly every country has both an income tax and some form of value added tax (called a sales tax in the US) — this includes Germany of course.

    What most people don’t know, and are surprised to learn, about Germany, which is regarded as a wealthy nation, is that people there are relatively poorly paid (they seem to value benefits like job protection more than wages/salary), and the public pension system (equivalent to Social Security) has such a poor contribution to payout ratio (i.e. people pay a lot, but get little in retirement) that it ranks in the bottom third of the EU.

    And Germans pay a LOT of tax (most people are not surprised to learn that) — in fact, they pay so much tax that the s.g. ‘tax freedom day’ for Germans generally falls in early July (link).

    • Replies: @Jokem
  31. Jokem says:
    @eah

    No surprise that European countries have high taxes. Pays for the burden of social programs.

    • Replies: @Durruti
    , @Bill Jones
  32. Durruti says:
    @Jokem

    No surprise that European countries have high taxes. Pays for the burden of social programs.

    Mostly incorrect.

    You manage to ignore/forget/censor hundreds of years of European history in that one (propagandistic) – misdirecting sentence.

    The Short list:

    You ignore the costs (human & property), of the WWs. WW I, & WW II, (specially WW II), gutted large portions of Europe. The WWs destroyed the best minds and lives of the best European Generations. Include the Spanish Civil War 36-39, that destroyed half a million of their young). Europe, from Belgium, to the gates of Moscow & Stalingrad, including Yugoslavia, Poland, and Germany-to the ruination of Berlin. In the last year, there is a growing, and quite bloody conflict in East Europe – between NATO and Russia.

    Your blaming the “burden of social programs” for the economic and social damages done to Europeans, is the equivalent of blaming Demented Biden and Casino Trump for our American Economic and Moral quandary.

    There may be waste included in “social Programs”. But that portion of our “high taxes” may be easily resolved. First, we shut down all the-

    1. fire departments

    2. police departments

    3. sanitation (waste & water management) facilities

    4. no need to check up on our Nuclear Plants

    5. Traffic safety, and road, rail, & bridge repair is not necessary. (Horses & oxen will do)

    6. Hospital emergency centers, ambulances, (nuke them).

    7. If I omitted anything that may be eliminated, place it here………………………………………….

    Hey! I can Joke/m as well as the next guy.

    • Replies: @Jokem
  33. Jokem says:
    @Durruti

    7. If I omitted anything that may be eliminated, place it here………………………………………….

    The regulatory burden, the social programs, the medical, the restrictions on firearms all have a cost.

    How’s that?

  34. Cking says:

    Labor is the source of all wealth; if not for Labor, Capital could not exist. The Fed is hostile to Labor. The present unconstitutional, unworkable, tax proposal only indicate what’s wrong with the Fed/Wall St. central control, command, economy.

    The ‘Private Sector’ is looting the Commons, the Public Domain, under the cover of the Establishment’s privatization and financialization of the economy scheme. As it is, we have a Billionaire class, and an investor class of lessers and wannabe rentiers, that do not how or where to invest their capital or credit. Yachts, empty mansions, Crypto, Bitcoin, paintings, collectables like old autos and baseball cards, gold, silver, etc. do not improve or increase the productive powers of Labor that create wealth and capital. In fact this Investor/Creditor class are comfortable with Slavery. The Fed/Wall St. system demands reorganization

    The Republican Party has to rediscover the system of political economy that President Lincoln proclaimed, the Union, Abolition, National Banking, deploy the debt free Greenback, and Continental Development.

  35. @follyofwar

    wouldn’t a Constitutional Amendment need to be passed to do away with cash? I can’t see that ever happening.

    No it wouldn’t be needed.

    A Central Bank Digital Currency would do just fine.

    And a CBDC is coming to a country near you very quickly.

  36. @Jokem

    Pays for the burden of social programs.

    An apt Moniker, Thanks for the laugh.

    Britain’s National Healthcare System costs a fraction of Medicare,

    • Replies: @Jokem
  37. Jokem says:
    @Bill Jones

    Britain’s National Healthcare System costs a fraction of Medicare

    And does a crummy job. Thanks for the laugh.

    • Replies: @Bill Jones
  38. @Jokem

    And does a crummy job.

    But delivers about 2.5 years greater life expectancy.

    • Replies: @Jokem
  39. Jokem says:
    @Bill Jones

    But delivers about 2.5 years greater life expectancy.

    And this can be proven to be due to medical benefits, not other factors like lifestyle?

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