Constitutional Relevancy?

This past Sunday, September 17, was the 230th anniversary of the conclusion of the Philadelphia convention of 1787.  Upon the conclusion of the convention, as he was leaving “Independence Hall”, the aged Benjamin Franklin was asked, “Well Doctor Franklin, what have you got for us?”, to which he replied, “A republic madam, if you can keep it.”  Actually, what he and the other delegates to the convention had given to their fellow Americans and us, their descendants, was a constitutional republic.

Yet, this week, we must ask, “After 230 years, are we still a constitutional republic?  Is the Constitution still relevant in our day and time?”  To these two questions I would answer with a resounding “No”!  Consider the following (with apologies to Jeff Foxworthy):

If the party in power can use secret courts to get an order to wiretap and spy on their opponents with no repercussions, you might not live in a constitutional republic.

If government agencies can plant applications on the computers of reporters who are reporting on governmental malfeasance and tap their phone conversations (e.g., James Rosen and Sharyl Attkinsson), thus violating both the first and fourth amendments, you might not live in a constitutional republic.

If the government records the conversations and all electronic communications of every citizen in massive meta-data fusion centers, again violating the fourth amendment, you might not live in a constitutional republic.

If elected officials constantly create unconstitutional agencies and empower them to act as legislator, executor and judge over your property, business and personal affairs, you might not live in a constitutional republic.

If elected officials listen more to those who fill their campaign coffers instead of their constituents, you might not live in a constitutional republic.

If certain officials in high positions of power use their position to influence policies and negotiations with foreign powers to grossly enhance their financial well-being at the expense of the liberties and security of the rest of the country (e.g., Hilary Clinton), with no fear of prosecution, you might not live in a constitutional republic.

If elected officials and even members of the Supreme Court have no inkling as to the tenets of the Constitution, even mocking it (e.g., Nancy Pelosi’s response regarding the unconstitutionality of “Obamacare”), you might not live in a constitutional Republic.

If the government routinely eschews the limitations imposed upon its authority by Article I, Section 8 of the Constitution, you might not live in a constitutional republic.

I could go on and on with these, but I think it’s a sufficient number that you get the picture.  Our elected (and unelected) government officials pay lip service to the Constitution they take an oath to uphold and defend, but they seldom live up to that oath.  So, is our Constitution relevant today as to the operation of our national government?  I think, sadly, the answer is rather obvious.

-September 22, 2017

 

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Infrastructure and the Constitution

We hear much these days about the need for Congress to pass an “Infrastructure bill” in which the national government will spend billions upon billions of dollars to repair roads and bridges of all types in cities and states across the country.  There’s only one teensy weenie problem with this – it is completely unconstitutional.

Are our roads, bridges, airports, et al, in dire need of repair?  Absolutely.  So what’s the issue with this “good intention” and the Constitution?  Simple.  The only reference to roads in the Constitution is found in Article I, Section 8, which states that “Congress shall have Power to…establish Post Offices and Post Roads.”  We no longer have roads designated as “post roads”; interstate highways, bridges, train trestles, airports and the like do not qualify for federal funds under the Constitution because they are clearly not defined to be “post roads.”

Yet, those wanting to pass this bill, including President Trump, will claim that this is for the “good” of the country – that such spending would fall under the guise of providing for the general welfare.  To this I say, “Baloney.”  Airports, bridges, highways, interstates are not part of the “general welfare” clause of Article I Section 8 of the Constitution, and I have no less than James Madison, the “father of the Constitution”, as my authority on that.  In The Federalist #41, he wrote:

“Nothing is more natural nor common than first to use a general phrase, and then to explain and qualify it by a recital of particulars.”

 In other words, the general phrase “general welfare” in the opening clause of Article I, Section 8 is defined and limited to the enumerated items that follow in the remainder of the article, and the only roads authorized to be established (and therefore paid for) by the federal government are “post roads.”

Furthermore, in 1822 Congress passed a bill to repair the Cumberland Road that had been built using federal money under President Jefferson’s administration.  Initially the road was used as a “postal” road, but later came to be more like our modern-day interstate highways, with the states putting up toll booths, etc. on it.  So, when this bill reached the desk of President Monroe, he vetoed it as being an unconstitutional appropriation of taxpayer money.  In his veto message to the House of Representatives he stated:

“Having duly considered the bill entitled “An act for the preservation and repair of the Cumberland road,” it is with deep regret, approving as I do the policy, that I am compelled to object to its passage and to return the bill to the House of Representatives, in which it originated, under a conviction that Congress do not possess the power under the Constitution to pass such a law.

 A power to establish turnpikes with gates and tolls, and to enforce the collection of tolls by penalties, implies a power to adopt and execute a complete system of internal improvement. A right to impose duties to be paid by all persons passing a certain road, and on horses and carriages, as is done by this bill, involves the right to take the land from the proprietor on a valuation and to pass laws for the protection of the road from injuries, and if it exist as to one road it exists as to any other, and to as many roads as Congress may think proper to establish. A right to legislate for one of these purposes is a right to legislate for the others….”

 Clearly, then, any kind of an infrastructure bill is unconstitutional.  What then can we do?  Have the states pay for the building and repair of these roads, structures and entities, or follow the advice of Present Monroe who gave this answer at the end of his veto:

“Having at the commencement of my service in this high trust considered it a duty to express the opinion that the United States do not possess the power in question, and to suggest for the consideration of Congress the propriety of recommending to the States an amendment to the Constitution to vest the power in the United States,…”

This, I understand, is a harsh stance, and federal money has been spent in this manner for decades and decades and is a “good” thing; but, as stated by an unknown Federalist author in the Alexandria Gazette on July 5, 1819:

“”[The] peculiar circumstances of the moment may render a measure more or less wise, but cannot render it more or less constitutional.”

-September 1, 2017

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Three “Fixes” to Restoring Freedom and Federalism – Part 1

In my last two essays (Badges?  We Don’t Need No Stinkin’ Badges!” and The Real Problem with President Trump’s Tax Return) I touched on the subject of how the general government in Washington, DC is encroaching upon our freedom and chipping away at our liberties.  The underlying problem that is precipitating this encroachment is a government that has expanded outside it’s intended, constitutionally-limited role.  Because of this there has arisen a movement to amend our Constitution via a co-called “Convention of States.”

Such a convention has been grossly misrepresented by those who are promoting it, but to address those misrepresentations would take numerous, lengthy essays and it is not the point of this series of essays.  What I wish to point out in this essay and the two to follow are three amendment changes that should be made a priority that would help to restore our freedom that is being destroyed and returning us to a true federal, republican form of government.

The first of these would be a repeal of the 16th amendment.  This amendment was pushed through by the progressives in both political parties (Woodrow Wilson and the Democrats along with Teddy Roosevelt and the northeastern Republicans) in the turn of the last century.  As I’ve pointed out previously, this amendment granted the power to the government to tax every form of our earnings at any level they deem appropriate (during the 1950s’ the marginal tax rate exceeded 90%!).  Such is a direct assault upon the concept of individual liberty as personal property rights, which includes our incomes, is the foundation of that liberty.  If those wishing to amend our Constitution were serious about it, this would be their number one concern.

Not only does this amendment give the government plenary power over our earnings, our tax forms that are required for reporting our income to the taxing authorities capture even more information about us that the government has no business having any knowledge of.   We are required to tell them how many dependents we have, what type, if any, retirement plans we have and if we received any benefits from them, how much we spent on health costs (which gives a window into our health status), what type of business we own (if we are self-employed), how much we donate to charities, what our occupation is, and on and on and on.  I challenge anyone to give me the article, section and clause in our Constitution that grants the government the right to have any of this information, for such authority is non-existent.

Yes, our Constitution is not perfect – Ben Franklin said as much on the last day of the 1787 convention in Philadelphia when the newly minted Constitution was signed by the delegates.  However, the Constitution has since been “toyed” with by individuals who did not rise to the level of foresight and wisdom of those who first framed it, and the 16th amendment is a prime example that needs to be repealed.

Next week – the 17th amendment.

-March 24, 2017

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Health Insurance, Obamacare and Government

Congress and our new President are pushing to “repeal and replace” Obamacare.  I wholeheartedly applaud the goal of repealing Obamacare.  However, the greater issue surrounds its passage to begin with and the follow up notion of “replacing”.

Obamacare is a clear violation of the statement laid down by James Madison in Federalist 45 that “The powers delegated by the proposed Constitution to the federal government are few and defined.”  Nowhere in the Constitution’s enumeration of the federal government’s powers is there any hint of a reference to its operation in the realm of health care.  Consequently, from this basic truth, Obamacare is unconstitutional and on that ground demands repeal.

However, that same principle also demands that Congress and President Trump not seek any kind of “replacement” by the federal government.  The proper role of the government in healthcare from the standpoint of the Constitution is no role at all.  If anything, it could be argued that the power of Congress to regulate commerce among the several states would authorize it to pass legislation which would allow insurance companies located in one state to “sell” its services in all other states.  This commerce clause in Article I Section 8 was inserted to prevent the states from charging tariffs on goods sent into them from other states, and in a sense insurance services could be likened unto an importation of a product from one state into another.  Hence, Congress legislating that all states allow insurance companies in one state to sell in another would be within its constitutional purview.  (It seems such action should be unnecessary as Congress didn’t have to pass legislation requiring states to allow Chevrolet or Ford to send their products from Michigan and other locations to all of the other states, so why should it be required to force states to allow insurance companies to “sell across state lines”?)

Those who oppose this move of repealing the so-called “Affordable” Care Act claim that access to health insurance is a “right”.  I have addressed this matter in previous essays in more detail, but simply put, a “right” is something that has always been and will always be – something neither created nor granted by man.  Obviously, a cursory examination of the history of health insurance indicates that it fails this basic premise of “rights.”  The concept of health insurance is less than 100 years old and has changed and been modified considerably since its introduction into our society.  Therefore, access to health insurance cannot be a right in the same vein as the right to life, liberty and property.  There is a reason why companies that provide health insurance coverage options to their employees style it as a “benefit”, administered by their “Benefit Department”.  Benefits are something that can be given and taken back, unlike rights which cannot be.

I would hope that Congress and President Trump will indeed repeal Obamacare in its entirety and then butt out and allow the free market to provide a variety and innovative options from which we can choose coverage that is both affordable and appropriate for our individual needs.

-January 27, 2017

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“I’m From the Government…

…and I’m here to help” – the nine most terrifying words in the English language according to Ronald Reagan.  We laugh, but painfully because we know deep down it’s true.  But why?  The answer is the law of unintended consequences.

Our founders crafted the Constitution as  a means of limiting the size, scope and  role of the federal government in our lives.  Yet practically, if indeed not all, of the ills besetting us can be traced back to the point at which the federal government has exceeded the boundaries of its constitutional authority.

The most recent case in point:  the flood victims of Louisiana.  Tens of thousands of families have been displaced, their homes destroyed  and their lives turned inside out.  These families face the challenge of trying to re-build without any insurance funds to cover the costs, leaving them in dire straits.  Jill Stein, the Green Party candidate for President places the blame on the bogus notion of man-made “climate change.”  Some may blame the Army Corps of Engineers for not properly building dykes and levees, while others may even blame God.

The fault, however, can squarely be placed at the feet of the federal government.  One government agency that provides flood insurance will only do so to those living in what has been declared by the government to be a flood plain.  However, another agency told many families that they did not live in a flood plain, and therefore they were not eligible for federally-provided flood insurance.  Had that not been the determination, then many might have applied for the insurance and thus had some protection since private insurance firms refused to offer flood insurance in that general region as the federal government was doing so.

Here then is the result of the law of unintended consequences.  Those in government felt that it was the “right thing to do” to offer folks this insurance, and in so doing make themselves feel they had performed the function to which government was created.  Yet because government stepped in and determined some to be eligible and others not, many are now facing ruined lives.

To begin with, it is not the government’s role to provide insurance – it is not one of the limited, enumerated powers granted it by the Constitution.  Second, by stepping outside its limitations, it provided a false sense of security to those living in the affected areas who were told they had no need of the coverage.  Third, and this is the ultimate unintended consequence of government’s overstepping, it indirectly encourages individuals and companies to take risks they otherwise would not take.  If you have the guarantee of government backing that you will be provided the money to rebuild your home, business, etc, then you might risk living in an area such as what would otherwise be a place you would avoid.

We saw the same thing in the bailouts a few years ago when banks and investment houses were “saved” by government handouts because they were “too big to fail.”  Why did the housing market collapse?  In a nutshell, it was government interference in the marketplace and its encouraging, and in some instances coercing, banks to make risky loans they would not have made in times past.  Again, the lives of countless individuals were adversely affected, and in the end, we all were as the national debt swelled as a result.  There are so many other examples they could comprise a book instead of a short essay.

I am not saying those affected in Louisiana are not to be helped, but if the government didn’t take so much of our money in taxes for unconstitutional purposes, private citizens would have more funds available to donate as they are doing and the government would not be needed.

President Reagan was right; he also warned that whenever we hear those “nine most dangerous words”, the safest thing we can do is run.  This we must do – run back to our constitutional roots of a limited government, in the words of Thomas Jefferson, that is bound down by the chains of that precious document so that we can escape these kind of negative, unintended consequences.

-August 26, 2016

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Study Guide/Handbook on the US Constitution

At the bottom of this newsletter you will see the cover to a new book, “The Handbook for We The People: A Primer on Strict Construction of the Constitution”.   Originally, the book was written with the intent to serve as a study guide to the fundamentals of our Constitution and the principles of the government it created for high school students, but it is an excellent tool for anyone who would like to have an understanding of the original intent of the authors of the Constitution.

The author, a good friend of mine, used several sources in putting this guide together.  The principles covered were based upon the writings of a retired attorney who is a devoted student and lecturer on the Constitution who writes under the pseudonym “Publius Huldah” (whom some of you may be acquainted with) along with writings of the founders including the Federalist Papers and Webster’s 1828 Dictionary which gives the meanings of the words as understood at the time of the writing of the Constitution.

The book is an easy read and contains seven chapters.  The first chapter covers the basics of the principles behind the Constitution such as a brief description of Federalism, republican government, etc.  The next three chapters cover in brief the enumerated powers of each of the three branches of government and touches on topics that are much in the news today such as  the major clauses of governmental power (Welfare, Commerce, Necessary and Proper) and how they were intended to be understood by the founders.

Chapter six builds upon the principle of federalism and republicanism and delves into the topic of nullification – a tool, as explained in the chapter, the founders put in place for the states to use in keeping  the federal government within its constitutional boundaries.  Chapter seven focuses on the issue hotly debated today in regards to the relationship between religion and the state.  The final chapter covers the concept of making amendments to the Constitution, including a brief look at the idea of what some are calling an “Article V Convention of the States”.

At the end of each chapter there is a list of questions and assignments to encourage the reader to delve deeper into the subject matter presented in the chapter.  In the appendix is a list of references such as the text of the Constitution, the Declaration of Independence and a glossary of terms that are critical to understanding the original intent of our founders.

The prophet Hosea of ancient Israel, speaking for the Lord, declared “My people are destroyed for a lack of knowledge.”  It is the intent of this book to help our youth, citizens, and yes, even government officials at all levels, gain a basic knowledge so as to keep our republic from being destroyed.  I highly recommend the book and would encourage anyone interested to look into it and use it for your children, grandchildren as well as any teachers and government officials you can convince to read it.

As a disclaimer, I did help in the early proofing of the book and making suggestions regarding the chapter questions; yet I have no financial interest at stake in the proceeds of the sales.  My only concern is to get an excellent primer into the hands of those who wish to gain a firm grasp of the original intent of our Constitution.

Handbook for We the People

-June 17, 2016

 

 

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The Political “Football” of Social Security

There are many things that I’ve come to find hard to believe, but I was squarely confronted with another one this past week when my wife and I attended a two evening seminar on filing for Social Security and Medicare benefits.  I’m not supposed to be old enough to be concerned with this issue yet there I sat!  However, I did learn just how convoluted this entire setup is and how it is not hard to believe how these programs will destroy our country if they are not addressed and dealt with.  Discounting the fact for the moment that such systems are not within the purview of government and outside the its Constitutional authority, we are in too deep to terminate them cold turkey; but we as a country must understand the truth behind them and wean ourselves off of them over the next few generations.

There are several myths about social security that have become ingrained in our social conscious.  First is the idea that it was designed to be a pension plan for retirement; that was the bogus lie used to “sell” the concept to the populace in 1937.  Yet when the Supreme Court stuck the law down as unconstitutional, FDR’s attorneys argued that it was really just a general tax and so it was allowed to stand.

A second myth is that the monies contributed are “held” in a trust fund for us.  There is no social security trust fund as the monies withheld from our paychecks and matched by our employers has gone into the general treasury and been spent.

A result of this first myth is the common attitude among retirees and those like myself who are closing in on that mile marker that those monies are “my money – I’m entitled to it because I paid into this plan.”  Again, that is based upon the belief that Social Security was intended to be a pension plan, which behind the scenes it was not.  Want proof?  When the law went into effect, the average lifespan for the most Americans was 64 years of age; the retirement age to collect Social Security benefits – 65 years of age!  The government was betting that for the most part, it would collect more in taxes than it would have to pay out because most would die before collecting their benefits!  Such is the cynical tyranny of socialist governments.

According to the Center on Budget and Policy Priorities, in 2015 Social Security benefits amounted to 24% of the federal budget.  Medicare, Medicaid and other similar insurance programs added another 25%.  A grab bag of other safety net programs took up yet another 10%.  The problem – these percentages are only growing exponentially at a rapidly increasing rate.  Witness how the projected date by government economists as to when these systems will be “broke” is a target constantly being updated to a date closer and closer to our immediate future.

I hope that my health will permit me to work for many more years so that I will be able to forego my benefits and do a small part of saving the financial future of my children and grandchildren, but who knows what the future may hold?  This one thing I do know will hold – these programs are not sustainable and our politicians must put our future ahead of their political futures by addressing this looming time bomb.  John Taylor said it well in regards to pension and welfare programs which had already started in the early 1800s’:

“That the error of trusting republican governments with this tyrannical power [i.e., creating pension and welfare programs], has probably caused their premature deaths, because they are most likely to push it to excess”  (Construction Construed and Constitutions Vindicated, p. 341, published 1820).

-April 29, 2016

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What Happens If You Don’t…

Pay your property taxes?  Pay your income taxes?  Comply with any EPA regulations regarding the use of your property?  Comply with a multitude of local zoning ordinances or permits in regards to your property?  We all know the answer to these questions as we’ve either experienced the consequences or know someone who has – the government, be it local, state and/or federal, swoops in and takes your property from you, fines you and perhaps even takes away your freedom by imprisoning you.

Does this sound like a government described by Patrick Henry during the Virginia ratification convention in 1788:  “for liberty ought to be the direct end of your Government”?  My question hardly needs a response.

John Taylor, one of the most eloquent and ardent defenders among our founders of individual liberty and limited government, had this to say on the matter of property and individual rights:

“The restrictions as to taxing property, imposed upon both the federal and state governments, also recognize only a limited power over it in either; and as to the application of taxes, it is,…expressly limited to the execution of the powers delegated, for which purpose and no other the power of taxation was bestowed.  Among the powers delegated, there is none to grant pensions, or to dispose of the public money according to the dictates of caprice, or benevolence,…

Societies are not instituted for the purpose of enabling governments to destroy natural rights; and as no man possesses a natural, or necessary, or convenient  power over the natural rights of another, a majority of men cannot have a right to surrender to a government an absolute power over these natural rights…the freedom of conscience and of labour are essentially natural rights…Neither nature, nor necessity, nor convenience, has invested the people, or their representatives, with an absolute power over private property, or over conscience;…” (Construction Construed, and Constitutions Vindicated, 1820, p. 276)

Let those words of wisdom from almost 200 years ago sink in.  Have we not done what Taylor said we have no right to do, namely surrendered our natural rights to a capricious government?  It is unfortunate that we cannot require all of these young people thronging to Bernie Sanders rallies to read Taylor’s writings before being allowed to vote.  Matter of fact, maybe it would help if all Americans were to read the wisdom of our founders before they cast their votes; maybe then we could elect men and women who would see to it that our government met Patrick Henry’s stated purpose of government.

-April 8, 2016

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A Tale of Two Speeches

This past Tuesday President Obama gave the final “State of the Union” address of his presidency.  I’ve noticed over the years that in every speech any of our recent presidents have given, they always proclaim “and the state of our union is strong.”   This President’s final speech ended on that proclamation, but such could not be further from the truth.

We have seen our nation sorely divided at several times during our history.  The Federalists under John Adams versus the Republicans led by Thomas Jefferson.  The southern states versus the northern states throughout most of our history.  Racial divisions, economic divisions, etc have at times been severe, and today these are as prominent as they have not been for some time, thanks in large part to this president’s leadership (or lack of) and agenda.

Today, these speeches by the sitting president have turned into a big production with little relation to what was originally intended by the founders.  Any more, they are nothing more than a big “pep rally” where the party In power gives itself a huge “pat on the back” and a long laundry list of “ornaments” it wants to “hang on the tree” of government expansion.

Such was not always the case.  As a matter of fact, if you read some of these addresses by our early presidents you will see where they read more like a corporate annual report – facts, plans and real accounting of revenues and expenditures.  Not only this, but in some instances the speeches were not even delivered orally, but rather were sent to the Congress in letter form.

So, by way of example, I close by sharing with you some quotes from President Thomas Jefferson’s first “Annual Message” (as it was called then), and you can compare the tenor of it with what you heard on Tuesday evening:

“When we consider that this government is charged with the external and mutual relations only of these states; that the states themselves have principal care of our persons, our property, and our reputation, constituting the great field of human concerns, we may well doubt whether our organization is not too complicated, too expensive; whether offices or officers have not been multiplied unnecessarily, and sometimes injuriously to the service they were meant to promote. I will cause to be laid before you an essay toward a statement of those who, under public employment of various kinds, draw money from the treasury or from our citizens. Time has not permitted a perfect enumeration, the ramifications of office being too multipled and remote to be completely traced in a first trial. Among those who are dependent on executive discretion, I have begun the reduction of what was deemed necessary. The expenses of diplomatic agency have been considerably diminished. The inspectors of internal revenue who were found to obstruct the accountability of the institution, have been discontinued. Several agencies created by executive authority, on salaries fixed by that also, have been suppressed, and should suggest the expediency of regulating that power by law, so as to subject its exercises to legislative inspection and sanction. Other reformations of the same kind will be pursued with that caution which is requisite in removing useless things, not to injure what is retained….

Considering the general tendency to multiply offices and dependencies, and to increase expense to the ultimate term of burden which the citizen can bear, it behooves us to avail ourselves of every occasion which presents itself for taking off the surcharge; that it may never be seen here that, after leaving to labor the smallest portion of its earnings on which it can subsist, government shall itself consume the residue of what it was instituted to guard.

 In our care, too, of the public contributions intrusted to our direction, it would be prudent to multiply barriers against their dissipation, by appropriating specific sums to every specific purpose susceptible of definition; by disallowing applications of money varying from the appropriation in object, or transcending it in amount; by reducing the undefined field of contingencies, and thereby circumscribing discretionary powers over money; and by bringing back to a single department all accountabilities for money where the examination may be prompt, efficacious, and uniform.”

 This is just a sample of what a real President, intent upon upholding the Constitution he took an oath to protect  and having an interest in securing our freedom and liberties would say.  Alas, this is not the kind of rhetoric we heard on Tuesday evening.

-January 15, 2016

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What to Do – Part VI

During this election cycle we are hearing candidates spout different plans for reforming our tax code/system.  Since revenue is the other side of the  coin (spending being the other) that most directly impacts our deficit and increasing debt, it is an major piece of the puzzle that requires addressing.  The issue raised by leftists is we need more “revenue” (i.e., taxes), but history has shown that rarely, if ever, does an increase in “revenue” result in a decrease in deficit spending, but rather spurs on even more spending on more unconstitutional programs and agencies.

Could the country use more revenue?  Yes, if that additional amount is used solely to pay down our debt.  To this end I would submit that once our tax system is replaced, not “reformed”, that excess revenues be required by law be applied to debt reduction.  So what tax system would be best?

This cannot be fully answered in a short essay, as I’ve written in years past many pages on analyzing the various options being bandied about.  I would submit that the best choice is to replace all income-related taxes with a consumption tax.  There has been a bill in the House of Representatives (and a companion one in the Senate) since the early 1990s’ that leadership will not allow to come to the floor for a debate and vote that would do away with these taxes, the IRS, and call for a repeal of the 16th amendment.  This bill is most commonly known as “The Fair Tax Act”.

I cannot get into the details of how this system would work, but I will list the main points:

  • Studies have shown that it would be cost neutral in terms of product and service prices once the transition to it has been fully accomplished as everything we purchase has built into them a 23% cost directly tied to income-related taxes. When those taxes are eliminated, market forces will cause the prices for everything to fall by at least that amount.
  • It gives everyone an immediate 7.65% pay increase as Social Security and Medicare taxes are no longer deducted from workers’ pay checks (a special benefit to lower wage earners).
  • It will actually increase revenue in that those who currently pay no taxes on income due to the so-called “underground economy” and illegal activities would now pay taxes when they make purchases.
  • The wealthy will pay more in taxes as they buy more high-priced items, and we all know that the higher the cost, the greater the sales tax.
  • We each will control the amount of tax we pay by managing our purchases instead of the government extracting what it determines we should pay and when it must be paid from our earnings.

In 1997 a Congressional Joint Committee on Taxation issued a report compiled by a number of leading economists who had conducted a modeling analysis of our current income tax system with some modifications that were being proposed at the time along with models of changing the system completely to a consumption tax.  On page 19 of their report it states

“From the medium to long-run perspective, the consumption tax produced a stronger positive growth effect than the unified income tax….”  Then on page 34 it goes on to state that “…tax restructuring in the form of a consumption tax will ultimately produce higher economic growth….”

The benefits that aided in producing these results were spelled out to be the following:

“…reducing the cost of capital through less taxation of capital provides an incentive for additional investment; reducing the marginal tax rate on labor provides an incentive for increased labor effort; increasing the returns to labor through capital deepening can provide an incentive for more labor; and,…reducing distortions in investment decisions by eliminating differential taxation of different types of capital promotes a more efficient allocation of resources.”

In short, moving to the Fair Tax, according to this report, would be the stabilizing boost our economy so desperately needs:

“The broad consensus of all the modeling approaches, that moving from the present-law income tax base to a uniform consumption tax base will result in a long-run increase in GDP, capital investment, and labor effort,”

In closing, I will answer the matter I mentioned in Part V of this series, namely what to do with the employees of the IRS when that agency is reduced.  In order to increase enforcement of our immigration laws and auditing of businesses to ensure their compliance in not hiring illegal aliens, many of these individuals could be moved over to the Immigration and Naturalization agency, thus solving a manpower requirement there without having to increase the number of government employees.

-October 16, 2015

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