News Republicans pushing to eliminate the IRS

[wasteofo2]

REPUBLICANS PLAN PUSH FOR ELIMINATION OF IRS

**Exclusive**

A domestic centerpiece of the Bush/GOP agenda for a second Bush term is getting rid of the Internal Revenue Service, the DRUDGE REPORT has learned.

The Speaker of the House will push for replacing the nation's current tax system with a national sales tax or a value added tax, Hill sources tell DRUDGE.

"People ask me if I’m really calling for the elimination of the IRS, and I say I think that’s a great thing to do for future generations of Americans," Speaker of the House Dennis Hastert explains in his new book, to be released on Wednesday.

"Pushing reform legislation will be difficult. Change of any sort seldom comes easy. But these changes are critical to our economic vitality and our economic security abroad," Hastert declares in SPEAKER: LESSONS FROM FORTY YEARS IN COACHING AND POLITICS.

"“If you own property, stock, or, say, one hundred acres of farmland and tax time is approaching, you don’t want to make a mistake, so you’re almost obliged to go to a certified public accountant, tax preparer, or tax attorney to help you file a correct return. That costs a lot of money. Now multiply the amount you have to pay by the total number of people who are in the same boat. You can’t. No one can because precise numbers don’t exist. But we can stipulate that we’re talking about a huge amount. Now consider that a flat tax, national sales tax, or VAT would not only eliminate the need to do this, it could also eliminate the Internal Revenue Service (IRS) itself and make the process of paying taxes much easier."

"By adopting a VAT, sales tax, or some other alternative, we could begin to change productivity. If you can do that, you can change gross national product and start growing the economy. You could double the economy over the next fifteen years. All of a sudden, the problem of what future generations owe in Social Security and Medicare won’t be so daunting anymore. The answer is to grow the economy, and the key to doing that is making sure we have a tax system that attracts capital and builds incentives to keep it here instead of forcing it out to other nations."

Not sure what to make of this...

 

[russ_watters]

I'd be awfully surprised if Bush proposed anything so radical. But you never know.

Not sure what to make of this.

The US has a progressive tax sysem (the more you make the higher percentage you pay in taxes) - this would make it regressive.

 

[wasteofo2]

I'd be awfully surprised if Bush proposed anything so radical. But you never know. The US has a progressive tax sysem (the more you make the higher percentage you pay in taxes) - this would make it regressive.

That sounds very much like something Bush would do in that case...

 

[JohnDubYa]

The US has a progressive tax sysem (the more you make the higher percentage you pay in taxes) - this would make it regressive.

Not if you exempt rent and food, the two largest expenditures of the poor.

 

[Kerrie]

paying taxes are not in the constitution, so why do we have to pay?

 

[Dissident Dan]

paying taxes are not in the constitution, so why do we have to pay?

So the government can function.

 

[loseyourname]

Actually, the income tax is in the constitution, by virture of the 16th amendment, ratified in 1913. However, when you consider that the government functioned for 137 years without an income tax, it's pretty silly to say that such a tax must exist for government to function.

Caveat (since everyone is getting so riled up over misinterpretations of posts lately): I know this is not what you are saying, Dan. You are probably saying that the government needs some form of tax to operate, though not necessarily the income tax. I can agree with that.

 

[Kerrie]

Actually, the income tax is in the constitution, by virture of the 16th amendment, ratified in 1913. However, when you consider that the government functioned for 137 years without an income tax, it's pretty silly to say that such a tax must exist for government to function.

there is speculation that the amendment was passed illegally...

 

[russ_watters]

paying taxes are not in the constitution, so why do we have to pay?

I assume you mean income taxes. Article 1, section 8, clause 1:

The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States...

And speculation on conspiracy aside, an amendment is a part of the constitution.

 

[Kerrie]

I assume you mean income taxes. Article 1, section 8, clause 1: And speculation on conspiracy aside, an amendment is a part of the constitution.

yes, i meant income taxes...prohibition was also an amendment thank goodness it was repealed...

 

[member 5645]

I would be very happy if this actually happened. It would make me feel good about voting for bush, not just mediocre.

 

[loseyourname]

Heck, it would make me feel great about voting for Bush. He'd suddenly become my hero, bad grammar and all.

 

[Gokul43201]

Yes, you eliminate the IRS, and that's a big spending cut. Likely, you also revitalize the economy, and reduce unemployment some...but can you really cut the deficit in half by adopting a flat tax rate ?

 

[Kerrie]

Yes, you eliminate the IRS, and that's a big spending cut. Likely, you also revitalize the economy, and reduce unemployment some...but can you really cut the deficit in half by adopting a flat tax rate ?

do you realize the salary of government workers? not to talk bad about family members, but i have several relatives who make a ridiculous amount of money for what they do, let alone the awesome benefits and all of the holidays they get paid for--such as ronald reagan's funeral...

 

[Robert Zaleski]

Yes, you eliminate the IRS, and that's a big spending cut. Likely, you also revitalize the economy, and reduce unemployment some...but can you really cut the deficit in half by adopting a flat tax rate ?

That would be 82,495 full-time and 12,143 part-time bean counting scoundrels walking the streets of America in a daze. Sounds good to me.

 

[loseyourname]

do you realize the salary of government workers? not to talk bad about family members, but i have several relatives who make a ridiculous amount of money for what they do, let alone the awesome benefits and all of the holidays they get paid for--such as ronald reagan's funeral...

Yeah, my dad's a civil servant. He mostly sits around in a park reading the newspaper and listening to the radio. He's probably overpaid.

 

[member 5645]

Yeah, my dad's a civil servant. He mostly sits around in a park reading the newspaper and listening to the radio. He's probably overpaid.

My friends all work for the local postal encoding center (good job for college students with no experience). They get paid almost 15/hr with mandatory proactive raises because of the postal union. So everyone 2-3 months my friend gets another 15 cents an hour along with a check for 15 cents and hour since he began, up until something like 350 dollars.

I wish I just got bonuses and raises periodically, just for showing up.

 

[JohnDubYa]

Liberals often complain about a gap between the rich and the poor, but how many complain about the gap between those that sit on their duff and get paid $15/hour working for the government and those that get minimum wage working for private industry?

 

[Dissident Dan]

Heck, it would make me feel great about voting for Bush. He'd suddenly become my hero, bad grammar and all.

So, you would feel better when the deficit goes from its already-outrageous current levels ($7.3 trillion ~$24K/person - http://www.publicdebt.treas.gov/opd/opdpenny.htm ) to levels that could cripple the economy by causing interest rates to increase confidence in our government to decline, and leaving the government with nothing to do with its tax income but pay off debt.

Before we had income taxes, that was ok because the government didn't spend so much. You can have massive increases in spending and tax breaks at the same time. That's just ridiculous. One or the other, people.

 

[selfAdjoint]

It has been worked out that to give the government as much income as the income tax does, a sales or VAT would have to be over 20%. So every five dollar item would cost six, and your monthly food and energy bill would go up a fifth. Prettty soon al your other monthly costs would go up too, as the tax, especially if it was a VAT, worked through the economy.

European countries that have a VAT also have an income tax.

 

[member 5645]

So, you would feel better when the deficit goes from its already-outrageous current levels ($7.3 trillion ~$24K/person - http://www.publicdebt.treas.gov/opd/opdpenny.htm ) to levels that could cripple the economy by causing interest rates to increase confidence in our government to decline, and leaving the government with nothing to do with its tax income but pay off debt.

Before we had income taxes, that was ok because the government didn't spend so much. You can have massive increases in spending and tax breaks at the same time. That's just ridiculous. One or the other, people.

Your logic makes NO SENSE.

 

[Greg Bernhardt]

I would welcome this change. Save more spend less. Sure our economy will dip the first year from sticker shock, but as it becomes normal the spending will return. This is good for people to save on their own as SS dies. If a flat tax is imposed, it'll likely be progressive, lower on food, clothes and higher on luxury items. A US federal tax also has the ability to earn more for the goverment. Thousands of people don't file for income taxes and/or make illegal deductions. This way they have no choice, unless they choose to not buy anything which is impossible.

However, when you consider that the government functioned for 137 years without an income tax, it's pretty silly to say that such a tax must exist for government to function.

Lets for a second imagine our government without tax money... Sure the government can function without tax, but then you'd have to cancel every government program and 90% of it's function. All of which makes the US a great country.

 

[GENIERE]

There are no negatives in a VAT. It can be made as regressive or as progressive as one desires.

In the meantime, I hope the lefties amongst us enjoy the sucking sound from their wallets each month when I receive the $4,000.00+ Social Security checks. Some of that went to GW and the RNC in 2004 but for a good share of the rest... my grandkids thank you.

...

 

[russ_watters]

There are no negatives in a VAT. It can be made as regressive or as progressive as one desires.

Not quite. The first, biggest negative is, as Greg said - by encouraging saving over spending, it hurts the economy- how much and for how long is difficult to predict. And it can't be made as progressive as one desires (without having 100%+ rates at the upper levels) because the richer a person is, the larger the fraction of their income they save.

It also doesn't address the issue of stock-option income: Bill Gates is worth upwards of $50 billion. Very little of that is taxable income either with the existing system or in a VAT system.

 

[loseyourname]

So, you would feel better when the deficit goes from its already-outrageous current levels ($7.3 trillion ~$24K/person - http://www.publicdebt.treas.gov/opd/opdpenny.htm ) to levels that could cripple the economy by causing interest rates to increase confidence in our government to decline, and leaving the government with nothing to do with its tax income but pay off debt.

Before we had income taxes, that was ok because the government didn't spend so much. You can have massive increases in spending and tax breaks at the same time. That's just ridiculous. One or the other, people.

So, Dan, when did I ever advocate big government spending?

 

[GENIERE]

Not quite. The first, biggest negative is, as Greg said - by encouraging saving over spending, it hurts the economy- how much and for how long is difficult to predict. And it can't be made as progressive as one desires (without having 100%+ rates at the upper levels) because the richer a person is, the larger the fraction of their income they save.

It also doesn't address the issue of stock-option income: Bill Gates is worth upwards of $50 billion. Very little of that is taxable income either with the existing system or in a VAT system.

I mistakenly stated, “VAT” in my post. I am totally against a VAT, but strongly support a “sales tax”.

There are rebuttals and counter rebuttals ad nausea for the points raised. IMO the folks supporting a sales tax, referred to a “fair tax” - - http://www.fairtax.org/] - - successfully support their argument and are buttressed by the CATO Institute (one of many pro ST groups).

George Sorus earned a fortune buying and selling money. Perhaps there are good reasons to consider that a sales transaction with the resultant diminishment of his future earnings. Tumor bought gold, when he sells it, will the buyer will be taxed? When I buy stock, is that a sales transaction? If I exercise a stock option, is that a sales transaction? I haven’t sufficient knowledge to judge the economic impact of those questions, but it seems to me that one can lessen the concentration of wealth with a sales tax, something that has not been achieved with an income tax. An income tax may be designed to be progressive, in practice it is always regressive.

...

 

[Locrian]

Not quite. The first, biggest negative is, as Greg said - by encouraging saving over spending, it hurts the economy- how much and for how long is difficult to predict.

I do not believe this is true. Saving generates wealth, and investment helps the economy expand. Consumption will only drop on things that are less valuable to a person than saving the money is. I do not see how one can make a case that a reduction in spending on luxuries, and increase in wealth generated in interest and an increase in national investment are harmful to the economy.

 

[loseyourname]

It'll harm the economy for at least a year, I would say, as any company that relies largely on the sale of luxury goods will do very poorly, resulting in layoffs and loss of stock value. I don't know how large a sector of the economy this market accounts for, but I would guess at least that it accounts for enough to make an impact in the short term. Long term, encouraging fiscal responsibility on the part of the individual in the form of savings and investment rather than rabid spending, would almost certainly be a positive thing.

 

[polyb]

I can't believe this is even a serious consideration! How about overhauling the pork in the budget before we go around changing the whole tax system. There hasn't been one mention of the fiscal irresponsibility that is currently the US government. It seems to be worse now more then ever. It smells like a "bill of goods" to me. More importantly is, who would benefit the most? I certainly do not think it would be that vast majority of the people. I suspect it would be the few,the proud, the already wealthy.

How many of you even understand the tax system or the budget. I certainly have a minimal understanding and hence why I shudder at the idea. It seems more reasonable to first reign in the spending before changing the system. That would be much more beneficial to investor confidence and "growing" the economy. With the dollar falling, the excessive spending and debt that is currently happening, foreign and domestic investors are becoming more risk averse and hence are less likely to take the chances to start new enterprises. Bottom line, less tax revenue.

BTW, Has anyone considered how this would effect the NSF? How about college tuition?

 

[russ_watters]

I mistakenly stated, “VAT” in my post. I am totally against a VAT, but strongly support a “sales tax”.

Well, that's ok, since I have no idea what the difference is.

There are rebuttals and counter rebuttals ad nausea for the points raised.

There are, indeed, legitimate arguements to be made on both sides.

it seems to me that one can lessen the concentration of wealth with a sales tax, something that has not been achieved with an income tax. An income tax may be designed to be progressive, in practice it is always regressive.

Well, this is why I am in favor of simply fixing the existing system. There is no reason why the tax form can't be two pages long, and making it two pages long would mean cutting out all the loopholes and frivoless deductions that make it less progressive (its actually more or less flat for middle-incomes on up, iirc) than it is supposed to be.

I do not believe this is true. Saving generates wealth, and investment helps the economy expand. Consumption will only drop on things that are less valuable to a person than saving the money is. I do not see how one can make a case that a reduction in spending on luxuries, and increase in wealth generated in interest and an increase in national investment are harmful to the economy.

It is simply a matter of short vs long term effects. There is another thread around here where it is argued that the recent increase in deficit spending (by both government and individuals) is the reason for the economic prosperity in the past 20 years and that a collapse is imminent due to too much debt. 20 years is a long time for an economy to subsist on credit alone, but I would agree that it is partially responsible. Increasing spending does help the economy in the short term even if it means an increase in debt.

The corrolary is also true: if you hand 1,000 people $1,000 each, what are they going to do with it? Some will buy new entertainment centers, which immediately and directly puts that $1,000 into the GDP. Some will put that money into the stock market, which doesn't immediately cause the economy to grow, but rather enables future growth, and some will simply pay off debts, which doesn't put the money back into the economy at all, but may allow future debt-spending.

 

[schwarzchildradius]

I'm convinced that Hastert wants this, but not so convinced that W does. He had absolutely no problem imposing a flat tax on Iraq, and look at the disaster that resulted. If a national flat tax/sales tax is passed the federal government might be finished-- it will certainly cease to exist as a representative of common people. A flat tax and/or sales tax w/o income tax will weaken the system by taking money out at the bottom, creating instability for the top. The final result would be a broke, fuedalist state with a totalitarian regieme.

 

[loseyourname]

A flat tax and/or sales tax w/o income tax will weaken the system by taking money out at the bottom, creating instability for the top. The final result would be a broke, fuedalist state with a totalitarian regieme.

Well that's a slippery-slope argument if I've ever heard one. You don't think there might be some necessary intermediate events between a flat tax and feudal totalitarianism?

 

[GENIERE]

Well that's a slippery-slope argument if I've ever heard one. You don't think there might be some necessary intermediate events between a flat tax and feudal totalitarianism?

No, it would take several days, the Internet would collapse in the process delaying the natural progression.