The Fair Tax and Term Limits

Yes, those two issues for action are of primary importance, along with the sovereignty of the states. It was the states that, representing the people, formed a union for specific functions they could not perform as states. The Federal Government was a result of that union and not a party to it. The Constitutionis the contract between the states and the template for the central government.

I'm of the opinion that the two issues you pointed out would be aided tremendously by a majority of the states passing a resolution such as I have offered for their use.

Anything we can accomplish in the way of rescinding the powers the feds have created for themselves will be a step toward the Constitutional nation we should be.

Great thinking sir.
Glenn Flowers

Well stated. Both these measures give power BACK to the states where it was intended.

Some of the Republicans are starting to warm up to the TEA parties. Let’s put the question to them and see who’s willing to put liberty before self-interest. I have a feeling the herd will be quickly thinned.

I sent an email to republican senate candidate Marco Rubio, simply asking if he supported the Fair Tax and term limits. I never received a response.

Thanks for the kind words.

Tim, I see real problems with both issues.

On term limits: that would most likely entail a constitutional amendment, as did presidential term limits. I see nothing in the Constitution allowing imposition of term limits on Congresscritters by legislative act at either the state or federal level.


As to the Fair Tax, or VAT, I also see huge problems there.

On a practical level, it will be fought tooth and nail by liberals as being "regressive" and imposing undue burdens on the "poor" and all their other pet victim groups. That's hugely problematic. Plus, they'd actually have a point there. A VAT of, say, 15% (Canada's rate) on a $100 bag of groceries would be very annoying to me (particularly in addition to Cali's 12%). That would be total sales taxes of 27%. But to a truly poor person, it would be pretty devastating.

It would discourage home ownership, as there'd be no tax incentive to ownership, and may actually be a disincentive if that tax is imposed on massively expensive items like homes (not to mention other "luxury" items like cars, boats, planes, etc.). So... look for companies that make and sell those things to oppose the idea, as well as consumers.

VAT lends itself to being imposed unequally as a form of social engineering -- we see that now with sales taxes -- with higher tax rates on "unfavored" products like booze, cigarettes, or any other out-of-favor product due to the latest social fad. Burgers could have a huge tax "penalty", for instance.

Would these taxes be imposed on American products sold out of the country? If not, that's not fair to domestic consumers. If so, it would make our products uncompetitive in foreign markets.

Plus, there's no guarantee the VAT would cut government. Why would anyone jump to that conclusion? I can see liberals imposing 100% VAT on items they deem "luxuries". There's no limit to the VAT that could be imposed, all accompanied by suitable crying and excuse-making, of course.

Just look at this "healthcare" debate right now, and the "bailouts" and all of that. How would VAT have stopped any of that? No, the pols would have simply jacked the rates.

They'd probably accompany it with some kind of means test that would enable ID cards for the "needy", who would then be exempted.

I appreciate and respect your POV and want to adequately respond, so please forgive the winded response.

On term limits from the Heritage article:

“Ultimately, the power of the states to restrict the ballot access of their congressional delegations is supported not only by the "times, places, and manner" clause of the constitution, but also by the Tenth Amendment, which states that all powers not reserved to the federal government but not prohibited to the states, rest with the states and the people. As the Constitution is silent on the issue of rotation in office, the Tenth Amendment gives the states the authority to implement an organizational structure for election of their Congressmen and Senators which would encourage such rotation.”

My knowledge of constitutional law equates to my seven-year-old’s comprehension of quantum mechanics. But one thing is certain and doesn’t require a formal degree; any politician happy with the status quo of indefinite incumbency, is likely more concerned with self preservation than the negative consequences wrought by career politicians and the system that promotes and compensates them.

As Reagan said, “…government is the problem.” And we can’t change it if we can’t change them.

Put the amendment for term limits forward and let’s see who supports it.

The Fair Tax…

“Tooth and nail” is an understatement. No doubt the liberals and RINOs will fight hard against a VAT…providing their sledge hammer and golden goose, the IRS remains intact. They’ll put forward the “regressive” argument, while voting in favor of the most punishing regressive tax in history…Cap and Trade.

I wonder how many congressmen would oppose a small VAT as an additional source of revenue? Nothing extravagant, something small like 2%; the same amount as the first peacetime income tax imposed by Democrats in 1894. Foot in the door, ciao buonanotte!

“Based on standard measures of tax burden, the FairTax is more progressive than the individual income tax, payroll tax, and the corporate income tax.” A Comparison of the Current Tax System and the FairTax Plan,” The Beacon Hill Institute at Suffolk University, February 2007.

The Fair Tax will increase your purchasing power to buy all goods. The elimination of all federal personal and corporate income taxes, gift, estate, capital gains, alternative minimum, Social Security, Medicare, and self-employment taxes will stimulate economic growth and in turn consumption.

“Consumption is fueled by the 1.7 percent increase in disposable (after-tax) personal income that accompanies the rise in incomes from capital and labor once the FairTax is enacted.”

“By the 10th year, consumption increases by 11.7 percent over what it would be if the current tax system remained in place, and disposable income is up by 11.8 percent.”

Arduin, Laffer & Moore Econometrics, “A Macroeconomic Analysis of the FairTax Proposal,” July 2006.

Of course that’s assuming Americans choose to consume more based on increased income. But even if they don’t, at least the individual is making the choice, not the government.

The same premise holds true whether you’re buying a doll house or a real one. And I’m not so sure large and small manufacturing companies would oppose eliminating payroll and income taxes for a VAT, knowing that more Americans would qualify to buy their products based on the increase in purchasing power. More important, the individual is rewarded vice punished for hard work and personal responsibility.

As for social engineering; no tax system will deter politicians from trying. But the income tax and the IRS that administers it, has undeniably become a self-licking ice cream cone of gargantuan proportion. I don’t see how a simpler and more transparent system like a VAT could be misused more than the current one.

Products sold outside the country should be exempt from the Fair Tax. I don’t pay the sales tax of the state that provides goods to another state. Only the taxes from the state in which I reside. Furthermore, the less we tax exports, the more foreigners will buy them. However, foreign tourists (and illegal aliens BTW) will contribute to the federal tax when they consume goods in America.

Collection of the federal VAT would be the burden of the state. And as such would distribute collection responsibilities between the 50 states, vice one central monolithic entity beholden to no one but federal bureaucrats and the elected officials who appoint them. The 17,000 page tax code, and the hundreds of thousands of man-hours wasted by private and government personnel to implement and enforce it would no longer have a reason to exist.

A Fair Tax would not stop statist politicians from trying to implement bailouts, pass spending bills, or seek revenue from other sources. No more than the current system does. But it would decrease their size and potential growth, and force them to transfer some of the power back to the states and ultimately the individual.

IMO, nothing could be more ill conceived, unfairly implemented, or detrimental to our economy than the tax codes currently in place.

I am surprised that Huckabee is the only candidate I recall pushing the fair tax. It makes so much sense.

I agree with term limits and have posted about this. Surprisingly many conservatives disagree with this because it would take away from the people's right to chose. Others think it would be best for the State Legislators to select Senators instead of the people.

I don’t get the argument, “take away the right to choose”. If anything, term limits increase choice by realistically widening the potential candidate pool. The reason we need the law, is that incumbents with the help of special interest narrow our choices because they are so hard to unseat. The only rights violated are those of the politician to retain power.

I’m all for repealing the seventeenth amendment. Take a look at this:

http://www.opensecrets.org/races/election.php?state=FL

I have to wonder what percent of the $1,512,602 for Mr. Meek’s comes from out of state sources.

On term limits, that is the correct and ONLY power the states have as to election of Congressmen; and those three aspects -- "times, places, and manner" -- refer specifically to the mechanics of the elections themselves, NOT the qualifications nor length of terms of Representatives and Senators. Those qualifications are spelled out in the Constitution itself, and the states don't have superior authority on those issues.

This issue was already decided by the Supremes in 1995 in "U.S. Term Limits, Inc. v. Thornton", wherein SCOTUS ruled exactly as I've already written.

Congressional term limits would take an amendment.



As to VAT, you wrote: "But it would decrease their size and potential growth, and force them to transfer some of the power back to the states and ultimately the individual."

How would it do that?

See, that's the problem with the whole proposal: it's ascribed magical powers that don't exist. Politicians can jack up the tax rates to punitive levels; they can exempt certain goods, and add tax surcharges to others. They can exempt certain classes of people from even being subject to VAT, and issue them ID cards. It could end up being even more of a nightmare than the current system, and even harder to track misfeasance because the entire taxation process takes place at the cash register with little to no individual accountability or trackability.

People who propose this idea always paint a rosy picture about how it would work in an ideal world. But the moment you get politicians involved, that ideal world flies out the window. Politicians will always find a way to game the system to benefit their favored constituencies.

If I were to support a change in the system, it would be in favor of a flat tax. The same income tax rate for everybody, as originally instituted after the 16th Amendment. No deductions, no exemptions, nothing. A straight percentage of your gross income.

As to Senators, you may be interested to know that they WERE originally appointed by state legislatures until the 17th Amendment in 1913 provided for direct election by the people.

I agree absolutely and would add one other thing that would help clean up our problems; that being qualifying testing for voters. I just don't believe potential voters who know nothing about the constitution, issues and candidates deserve to vote. Just like I don't believe politicians need to stay in office forever buying the votes to keep them there at our expense. Thanks for permission to use your post. I'll do that AND go to the links.

Good work,ITK.

If an amendment to the constitution is required to impose congressional term limits, then perhaps we’re overdue for a Constitutional Convention. Whatever civil means necessary.

The point of my original post was to call attention to the detrimental consequences of career politics and the system that allows them to retain power. I contend that elected officials of both parties who don’t make a concerted effort to change this situation are part of the problem. If a conservative candidate is serious about returning power back to the states, they will campaign for such measure. But only if we the people first make it our rallying cry.

“As to VAT, you wrote: "But it would decrease their size and potential growth, and force them to transfer some of the power back to the states and ultimately the individual."”

“How would it do that?”

Under the Fair Tax, implementation would be a state, not federal responsibility. The IRS would no longer be obliged or authorized to collect taxes from individuals. Their collection efforts would deal only with the state VAT collection mechanisms. Would the IRS need thousands of employees to collect revenue from 50 state agencies? Would they need agents to monitor and audit the income of millions of individuals, and thousands of businesses and organizations...then more personnel to enforce compliance? Would they need federal tax attorneys constantly revising and rewriting a complex set of codes that many of the lawyers themselves admit they don’t fully comprehend? Under the Fair Tax, earned income would be none of their damn business.

The federal government could not justify keeping the IRS anywhere near its current size. It would have to abolish it in favor of a much smaller agency, whose scope and authority only deals with state bureaucracies. That change alone would not only force dramatic downsizing, but it would also take the power feds currently have over individuals and give it BACK to the states for enforcement. And as a consequence, citizens would be accountable to the state, not the federal government for taxes. Which level of government is more representative and responsive to your concerns; federal or state? Which tier is more accountable to YOU? The smaller and closer the government is to the individual, the more power you have to influence the outcome. THAT is how the Fair Tax will transfer power from the fed to the people. It is also the reason career politicians and an entire IRS dependant service industry is so opposed to it. Furthermore, Americans spend billions of dollars and unnecessarily invest millions of man-hours each year, just trying to comply and protect ourselves from the IRS and the insane tax codes. Dollars that could have been spent as disposable income, and man-hours that should have been used in more productive ways to strengthen the economy.

The Flat Tax might be better than the current system (almost anything would be) but it still taxes income instead of spending. Under the simple premise of taxing expenditures vice income, the feds will be without a device that they consistently abuse. If you’re still not convinced, just Google “IRS abuses”. You’ll have enough reading for the next decade.

You right, the Fair Tax is not a panacea. I never said it was. But it is more likely to prevent the government abuses currently being fostered on Americans.

If we are to affect real change in government, term limits and the Fair Tax, however difficult to enact, must occur.

Thanks for the words.

I agree that the majority of voters don’t have the knowledge required to understand how political decisions impact their constitutional rights...or anything else for that matter. They leave that to the media elite to interpret and feed them between breaks in reality shows.

I can see the ACLU’s take on such a test: Any voter qualifying tests administered would have to be “culturally” and “socially” sensitive to the needs of all; ensuring “fair” and “equal” application to all sexes, change of sexes, creeds, colors, races, religions, and sects. It would have to appeal to the “multi-diverse” ever changing dynamics of American society. It would have to be a “living” document.

It’s a good idea, but wouldn’t survive liberal legislation. The really sad part of this equation is not that voters are ignorant...it’s that they wish to remain so.

the flat tax put forth by Steve Forbes. It is a % based on income including everyone. It hits everyone the same.

I also would like to see the voting rights test be that you have to be a tax payer. If you don't have a stake in the outcome, you tend to vote for stooopid reasons.

As I replied to Brian, the Flat Tax, like the income tax is based on earned income therefore still punishes earnings vice spending. And it requires federal management and implementation, hence continued justification for the IRS. The original income tax passed in 1894 was considered reasonable, but look what it has become under federal control.

also needs someone to oversee and run it. No matter how you tax people, some governing body is going to be regulating/running it. I just see it as a single thing being taxed [income] versus everthing being taxed in the sales based fair tax.

I think what I wanted to say has been mentioned. Term limits would be a good thing indeed. Of course I think this would be very hard to implement.

The collection process under the Fair Tax proposal would be under state control. This is key. With the feds out of the individual tax collection business, they can no longer abuse the system or us. Please read my comments to Brian.

“I just see it as a single thing being taxed [income] versus everything being taxed in the sales based fair tax.”

The single thing being taxed is you. You either give the fed money based on earnings or spending. The current method (income tax) gives the fed total control over how much they take; the other (Fair Tax or VAT) provides you more power to control your federal taxes because it’s based on personal expenditure.

Thanks for commenting!

a TERRIBLE idea! Once it's convened, EVERYTHING'S on the table. It can't be limited in the scope of what it does. As a matter of fact, our current Constitution is the result of a convention that met to address shortcomings in the original Articles of Confederation, and instead of "amending" that document, they came up with something entirely new and different. A convention could eliminate gun rights, enshrine abortion... anything it wanted.

No, there's a standard amendment process in the Constitution, and that's what should be followed if it's to be done.

As to the VAT, the issue isn't its administration -- through the states or otherwise -- but the fact that it can be constantly raised, as I wrote, and that it's very regressive in application. The rates and administration rules will still be set by the Feds, so those problems aren't addressed by the states doing the collecting.

The public, dumbed down as they are, do not see the idealism of the Fair Tax, Flat Tax or any reductions so far. BHO's popularity, not his job approval, according to Luntz is at 70% Why I simply do not know unless it is in the water. And Term Limits have come and gone unfortunately. I voted for them in Ca. but the Dems are trying to undo them for the State Leg. races.

“Hard to implement” is an understatement. Like taking a bone from a rabid Doberman more like it. That’s why ALL of us must demand this.

I’m not qualified to debate the means of the amendment change; as I said, whatever it takes. I stand by my original position that in order to get power from the fed back to the people, systematic changes, namely abolishing the IRS and term limits has to happen. If not…it will be the same ole dance, over, and over again. They will not voluntarily hand over their club or cede power unless enough of us demand it.

As for the Fair Tax, we’ll have to agree to disagree. As I’ve clearly argued, execution of tax collection by the states literally puts the IRS out of business and prevents federal agents from coming to your door or business to either audit or collect taxes. Why would they need to come? To look at what? How much you spent in the last year? Besides, the Fair Tax proposal clearly specifies states as the collection entity. Bye-bye IRS! THAT scares the crap out of federal legislators and bureaucrats alike. Yes, the feds can screw with the rates, just as they do now. But they would no longer have an enforcement or audit agency.

I addressed the regressive argument with the studies showing the increase in buying power for all economic classes, should a VAT replace income tax. It is hard to imagine the amount of individual disposable income available sans all federal personal and corporate income taxes, gift, estate, capital gains, alternative minimum, Social Security, Medicare, and self-employment taxes.

I don’t think there’s much more to add, and I believe I’ve addressed all of your concerns. Besides, I promised myself I’d keep this reply down to one post. As always, I respect your POV. Thanks for commenting!

Both these measures are a career politician’s worst nightmare. One defangs him, the other forces him to move on.

Thanks for stopping by.

Yeah, an amendment is the way to go for term limits.


I agree we won't see eye to eye on the VAT, but here's the thing to consider re: it's regressive nature.

It's really not important whether in reality it is or is not truly regressive. What DOES matter is that its opponents will paint it as being such, and that argument will resonate pretty loudly across the electorate. That's been one of its stumbling blocks in the past, whenever it's been discussed.

One of the reasons it never gets anywhere is that when people start to ask the questions I did, it starts looking way too complicated for people to understand, and everyone sees how the politicians will game it no end.

Frankly, I think there's little hope for any significant change, because the reality is that the political hacks hold great power by keeping the tax code in their control, and they know it.

It affords them too many opportunities for social engineering. I don't see them giving that up anytime soon. And far too many people pay zero or little taxes under the current system. Why would they vote for change? It will only hit them in the wallet.

IMO, it's too late now to do anything.

My understanding is "we, the people" do NOT have the power or option of demanding term limits and term limits would be something to come from CONgress. Many politicians make pledges and then bow out but the majority of them have only been on the public dole and have never held jobs in the private sector. Something must change but how?

I am also a proponent of the Fair Tax and believe the IRS should be disbanded. Is the Fair Tax another name for the VAT? If all other taxes were abolished, the VAT could work. I don`t have any answers, just so many doubts. Good, thought provoking post, ITK.

It seems to be a paradox. We are unable to affect meaningful changes in favor of individual liberty, which would protect individual liberty.

The facts you mention concerning the realities of the situation are undeniable. That is why everyone must get onboard this train. We must counter the self-serving rhetoric against the Fair Tax and somehow educate the taxpaying citizens before entitlement recipients and government personnel, to include government/union “private” financial and manufacturing employees outnumber taxpaying Americans.

If the Fair Tax and/or term limits are pipedreams, then we’re all wasting our time and should just be content with the occasional bone thrown to us by conservative challengers and incumbents alike. And we must finally concede that at least some of our rights come not from the Constitution, but from government.

VAT is the acronym for Value Added Tax. It’s a federal sales tax. It’s synonyms with the Fair Tax in that they both tax expenditures vice earnings. In Europe, governments levy both income taxes and VATs on their populations. And if democrats have their way, the feds will eventually do the same. It’s not technically correct to use the terms interchangeably, since a VAT normally implies an additional tax to income taxes.

“Something must change but how?”

Honestly I don’t know. But spreading the word might be a good start. First get smart on the arguments for and against term limits and the Fair Tax. Then tell anyone who’ll listen that these two issues are the catalyst for regaining state and individual power. Federal politicians know it all too well. We must somehow make the voting public aware and then get them fighting for these changes. A tall order.

But face it; it's very unlikely.

When Steve Forbes tried a few years ago, people's eyes crossed, and he was labeled a boring wonk with weird idea. JC Watts got nowhere with it, either.

For a huge segment of the populace -- low earners -- it would represent an effective tax increase, so you know they and their spokesholes will strongly oppose it.

People who currently pay little or no income tax just aren't going to get behind a plan that taxes them at the cash register.

And nowdays, that's a LOT of people.

Arnold and The Leg. now are talking taxes....again. Oh they did not want to do it. Oh the angst. Drop by my newest today friend.

If the economy implodes, which it very well might, and people get fed up with the taxes…perhaps enough voters will start to listen. But only if we beat the drum now.

Be right over…

along the lines of what I'm hoping happens on a broader scale.

This unfettered liberalism being unleashed on the country, completely by the Dems -- no "moderate" GOPer in the White House to confuse the issue -- has the potential of clearly illuminating the flaws in liberalism.

If the incredible overreaching the Dems are now attempting FINALLY awakens the American electorate to the dangers they're facing with this philosophy, we may finally see liberalism discredited and shunned by the peeps.

Because frankly, if that DOESN'T happen, IMO this country's just flat-out doomed.

But if it DOES happen and we have a major revolt and rejection of liberalism and a restructuring of our policies and operations, I can't help but think the tax system would be part of that revamping.

promoter of the FairTax (HR-25) for years, have given dozens of talks on it both in Tennessee and Alabama, and have a state version before state legislators here in the Volunteer State.

Is free-market capitalism perfect? No, it just beats the bejeebers outa anything else. Id the FairTax perfect? Ditto.

Term limits? Philosophically, I don't believe in them. That, because voters have an unalienable right to stupidity. With the incredible chore of controlling the tyrannical federal government, however, I'd propose a single four-year term for congressmen, repeal of the 17th amendment, and a single ten-year term for Supremes.

Restoring the lost Constitution and restoring federalism would be my top priorities . . . if I thought that anything would save America . . . from itself.

Your essays on the Phoenix parable seem to be taking shape. And your blog has influenced my own awakening over the recent years. Let’s be ready if and when she takes flight.

You’ve summed up my thoughts more concisely in a short post than I did in my brief essay.

.

LOL!!! If you can influence a knucklehead like me, there must be hope for America.

VERY interesting discussion.

I hope I can add to it.

On term limits:

Count me in. Like DrPete, I have a problem with them ideologically. But darn, just think - we wouldn't have had Ted Kennedy all these years!

The Fair Tax:

All too often these days I find myself asking how things were done in the 1800's. Think of the expansion and growth of the country from 1800 to 1900.

And though I understand we can no longer expand westward, that is the die I use to cast most of my political beliefs.

So how was revenue collection handled back then?

It was, I believe, mainly tariffs and excise taxes.

Now though the fair tax, being an excise(or sales) tax, would be perfectly constitutional, I agree with BrianR that the political hurdles would simply be too high. Too, I concur that it would be regressive.

Tariffs, though they undermine pure free market capitalism, are somewhat less problematic so long as rates are kept at... oh, let us say less than 5 percent.

So. This is what I propose.

#No fair tax

#Eliminate the 16th amendment, and the income tax along with it. And the IRS. Replace it with.... nothing!

#Fund the military the same way we fund it now, through corporate taxes. However, slash rates to no more than 5-10 percent.

#The government can have its sales tax on gas and other retail purchases. Not a big deal in the overall scheme of things.(Although again, BrianR is correct in saying that there's nothing to stop the gubmint from imposing a 100% tax. But since it would hit the pocketbook on a daily basis, resistance would be more substantial I think.)

Heady issues, these.

Will this work?

It did in the 1800's.

Were these policies to be enacted, and the "federal" reserve(the lender of last resort) abolished, the federal government would by necessity have to abide by its constitutional proscriptions.

(God I'm tired. Thank you and good night!)

Interesting! It’s 0541 here in Sicily and I have an early tee time in Cefalu’. Damn the luck! I’ll respond later. Hopefully others smart on the subject will stop by and comment.

Thanks for dropping in.

I think we all agree about term limits. If the arm is gangrenous, cut it off. Currently however, the entire body of congress is infected.

As for the fair tax, I’m for anything that abolishes the IRS. Perhaps your notion of a national VAT on selected items would be acceptable, along with corporate taxes. But only under two conditions: 1) Income tax goes away (as you mentioned repealing the 16th amendment), and 2) the states manage collection. The feds will mess with the rates no matter which tax is levied.

Of course none of this is remotely possible now; maybe after the anointed one and his minions fall from grace. 2012? One thing’s for sure…we are in a pickle.

Thanx for the post and the links. I am not so sure you aren't right about these two issues. They would definitely take back the power and control that D.C. illegally and immorally now possess.

I still beleive there is NO REASON that individual States cannot exercise term limits on their own for their OWN Reps and Senators. I have yet read anything that precludes the sovereign States from dealing with this issue themselves.

BTW, great discussion in this thread. Gee whiz I like to read and learn!

“I still believe there is NO REASON that individual States cannot exercise term limits on their own for their OWN Reps and Senators. I have yet read anything that precludes the sovereign States from dealing with this issue themselves.”

The Tenth Amendment restates the Constitution's principle of Federalism by providing that powers not granted to the national government nor prohibited to the states are reserved to the states or the people.

Your belief is well founded.

However, unless the majority of Americans demand an amendment implementing congressional term limits, the mechanisms for political careerism will remain and little will really change.

and a noose for all who are guilty of Treason