Abolishing the IRS = Zero Corporate Taxation, etc.

Proposal by Republicans to "Abolish IRS"
========================================

It appears that the Republicans, having
exhausted the Treasury as well as the
tax code's ability to provide further
tax cuts have devised a scheme to eliminate
not only all business and corporate taxes,
but to effectively end taxation on the
wealthiest Americans.

You can see the version of H.R. 4168
floating around at
http://thomas.loc.gov/

(Enter "consumption tax" in the search field.)

You will see this:
"H.R.4168 Individual Tax Freedom Act of 2004
(Introduced in House)"

The operative part you will find most
interesting is this: Section 4, Chapter 1,
Sub-Chapter A, Section 1, "Imposition of Tax":

"(a) IN GENERAL- There is hereby imposed a tax
of 15 percent on the gross payments for the use,
consumption or enjoyment in the United States
of any taxable property or service, whether
produced or rendered within or without the
United States."

Furthermore, to compensate for the highly
regressive nature of this law, they propose
to credit individuals and families 15% of
the poverty level. That would amount to perhaps
$1,000, assuming that you file the appropriate
registration forms and/or have your paycheck
adjusted.

What this means is that Exxon Mobil and Pfizer
will no longer pay Federal Income Tax. Nor
will they pay the new Federal "consumption
tax".

And it means that a person earning $2,500,000
a year who spends $25,000 a year would pay
taxes of $3,750 -- the same amount paid by
someone spending the same but earning only
$250,000 or even $25,000.

Effectively, the person earning $2.5 million
a year will have a tax rate of 0.0015 (.15
of 1 percent).

BUT WAIT! There are many more implications of
all of this. Savings, already taxed once, will
be taxed again at the check-out line. This
penalizes thrifty people, but does give them
the opportunity to not spend their money and
avoid the tax. The true hardship might be
faced by the highly-leveraged consumers who
are far, far in debt...for there will no longer
be income tax to use those mortgage interest
payment deductions against! That is...
until Congress begins modifying the law to
exempt special interest groups... and to
increase the Federal income, Congress just
needs to increase the tax rate to afford
the hand-outs!

Which is why, in a way this boils down to is
"enabling an addict" (the government). With
new sources of income -- a cut of every
financial transaction, except for
stock and bond transactions of course, the
Feds will be able to afford to build up the
military even more! No need to reform or
spend wisely, just give Uncle Sam 15% of
every transaction made by everyone everywhere
in the U.S., forever (and remember that as
inflation increases, their sales tax
revenues will grow accordingly!)

It will be interesting to see how this plays
out. Many of us will be gaming the fall-out,
trying to figure out in advance who wins,
who loses and who wins "big". In general,
debtors will be hurt, along with savers,
so there will be fun for everyone!!! The good
news is that American industry will again
have a competitive advantage -- a zero tax
rate, just like the Bahamas. (Offset of
course by the most vicious and corrupt
government in the "Free World", hoho.)

* * *

Vote Bush-Cheney 2004 -- the last vote you'll
ever need to cast!