The Complexity of the U.S. Tax System

The following graphic was created by Neil Patel and posted on his Quicksprout web page.

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5 thoughts on “The Complexity of the U.S. Tax System

  1. I heard a radio commercial about the Earned Income Tax Credit last night. I almost shot the radio. What the hell has this country come to when the government (IRS) has commercials on the radio with people saying “Girl, you better make sure you get that Earned Income Tax Credit. You know $5600 would be real nice right now.” They’re all looters!

    The only problem I have with Fairtax is that I think there is NO Constitutional authority for ANY citizen to pay ANY taxes directly to the Federal government. The Federal government needs to go get bent.

    Furthermore, if eliminating the IRS and ALL federal taxes while drastically reducing the size of state and local governments would result in too many government employees becoming unemployed and starving, I say “good.” They’re NOT ENTITLED TO OUR MONEY. I have no desire to fund a welfare program known as “employment by the government.”

    As far as the tax preparers go, I say the same goes for them. If they would suffer under the elimination of taxes, then good. They’re merely leeches on the leg of an unConstitutional system and deserve to slowly starve to death with their host or jump off and find some other source of sustenance. I’ll pay them less than minimum wage to cut my grass if they need work.

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  2. Check Art. 1, Sect. 8 of the Constitution, which authorizes Congress to “lay and collect taxes”.
    The Founders considered taxes on consumer products to be indirect, because consumers choose what they will purchase. I’m all for shrinking the size and scope of the federal government, and FairTax will help speed that up by making everyone a taxpayer!

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    • Article I, Section 8, Clause 1 states:

      “The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States;”

      Article I, Section 9, Clause 4 states:

      “No capitation, or other direct, tax shall be laid, unless in proportion to the census or enumeration herein before directed to be taken.”

      The last portion of Article I, Section 8, Clause 1 is what is VERY important here. “but all duties, imposts, and excises shall be uniform throughout the United States.” This is the section that makes it clear what was meant and why direct (or indirect) taxation of the citizens by the federal government was not allowed. Furthermore, a sales tax in any form is contrary to this clause as it would not be “uniform throughout.”

      Additionally, one would argue that the 16th Amendment over-rides Article I, Section 9, Clause 4, but this is impossible. It IS true that Article I, Section 9, Clause 4 basically says “No, you can’t” and the 16th Amendment says “Yes, we can” but this is not even allowed under common logic. If it were, one could pass an Amendment that says “The US Constitution is null and void.” You can’t give yourself the power to do something when you don’t have the authority to do so. All of that said, I don’t believe that the 16th Amendment was ever properly ratified anyway.

      As to the issue of direct vs. indirect taxation, it should be first noted that the founders did NOT consider sales taxes to be indirect taxes. This is evidenced by the fact that sales taxes did not even exist in the day of the founders and was, therefore, not even a consideration in their mind. Sales taxes and VAT style taxes are an invention that came about in the 20th century. France passed the first VAT style tax in 1954 and it has been downhill across the globe since then. So, no form of sales or VAT tax was considered to be an indirect tax by the founders.

      Furthermore, one would have to assume that the US Constitution gives the federal government the authority to even levy an “indirect” tax on the citizens, but there is no such authority granted anywhere in the US Constitution and when you throw the 9th and 10th Amendments into the mix, it becomes obviously apparent that the federal government has NO authority to levy even an indirect tax on the citizens.

      The federal government has the authority to levy taxes on the States who then levy taxes on their citizens. This assertion is much more in line with the overall intent of the founders and the meaning of the US Constitution since it keeps the States in the middle where they belong for the purpose of balancing the power distribution to keep them all in check. Before WWI and before the invention of the Federal Reserve, the primary source of revenue for the Federal government was customs duties or tariffs. This is acceptable under the US Constitution, but once the UNConstitutional Federal Reserve was created the usurpers in DC realized that they needed a way to feed the evil beast they created and the private owners of the Federal Reserve needed a way to rape the US citizens, hence the 16th Amendment was shoved down our throats. It was all downhill after that and now through these egregious tactics we’re bankrupt. This has also caused people in our day to think it is acceptable for the Federal government to reach directly into their pockets when it is NOT even remotely acceptable. We don’t owe anyone anything. WE did not spend the money. WE did not inflate the currency to the criminal levels of today.

      Lastly, the argument that a sales tax is an indirect tax, I believe, is incorrect. Who pays that tax? I do not mean who files the tax return and then pays the tax with the money they have collected, I mean, where do the funds to pay the tax come from? They come directly from the pocket of the citizen/consumer. Just because some disingenuous structure is placed around the tax collection system that has vendors paying the tax does not make it an indirect tax. If it were not passed directly on to the consumer, then one may be able to justify the argument that it is an indirect tax, but this does not happen. The consumer pays it. It’s not a tax on the item itself, either. It’s a tax on the transfer of ownership of that item. It is a penalty for doing commerce. Additionally, when the good or service does not cross a state line the Federal government has ABSOLUTELY NO authority to intervene in the sale in ANY WAY NO MATTER WHAT.

      I like the spirit of the Fair Tax and I am not trying to put it down. I think it is absolutely moving in the right direction; I just think that it does not go far enough. What we need is states who stand between the Federal government and their citizens and prevent the Federal government from collecting ANY taxes from them in anyway… direct or indirect. I mean this to the Nth degree too. If it meant that the Sheriff stepped in and told the unConstitutional agents of the Federal government to vacate the state or be escorted out, then so be it. Even if it meant that the Governor called in the State Guard to defend the citizens against the tyrannical Federal government, then it should be done. The Federal government has NO authority within the boundaries of a state. The DEA, FBI, BATFE, IRS, DoE, FCC, FDA, EPA, and pretty much all of the myriad of other Federal agencies have NO AUTHORITY on the sovereign soil of a state and should be shown the door at ANY cost. If we’re going to take our Liberty back, we’re going to have to take drastic measures. It’s worth it, though.

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