Tag Archives: IRS
The IRS Scandal: A Study in Government Tyranny
Posted on May 22, 2017 by forloveofgodandcountry
by Diane Rufino, April 19, 2017
"The Obama administration and its fronts in the Senate accomplished what Richard Nixon wasn't able to accomplish, which was the suppression of an entire movement against him. That's how you steal an election; you make sure your political opponents can't open an office." — Tom Fitton, president of Judicial Watch, which has sued the IRS to obtain documents related to the controversy
From 2010 until 2013, the IRS, under President Barack Obama, intentionally targeted Tea Party and other conservative groups applying for 501(c) tax-exemption by delaying the processing of their applications, requesting burdensome information from them that was later deemed unnecessary, and by intimidating them into withdrawing their applications. The scheme was intended to intimidate and/or stop Tea Party and other conservative groups from engaging in political activity in the 2012 presidential election and in subsequent mid-term elections. The abuse by the IRS was orchestrated in response to the growing Tea Party/ conservative/ grassroots movement (which all of a sudden were applying in great numbers for tax-exempt organization status and which were donating in large amounts to Republican candidates and elections). The actions of the government, spearheaded by President Obama, were a clear example of government tyranny – using terror and intimidation (the full resources of the federal government) to silence political opposition.
As Rep. Darrell Issa and Rep. Jim Jordan of the House Oversight Committee explained in a letter to IRS Commissioner John Koshinen: "This revelation that the IRS sent 1.1 million pages of nonprofit tax-return data — including confidential taxpayer information — to the FBI confirms suspicions that the IRS worked with the Justice Department to facilitate the potential investigation of nonprofit groups engaged in lawful political speech."
To date, and there is no surprise here, the IRS and its officials, have escaped justice and punishment. Its aggressive 3-year campaign against conservative grassroots organizations to suppress their first amendment rights of speech, expression, and assembly, and its illegal leaking of private tax information for political purposes, and its turning of the executive branch of the federal government into a thug ring for the Democratic Party has been explained away as mere incompetency and a lack of proper oversight.
The fact that Lois Lerner escaped prison, that records were destroyed in a campaign to obstruct justice and allow other guilty parties to escape punishment, and that John Koskinen retain his job as the IRS commissioner are scandals in and of themselves. Last fall, House Republicans took steps to have John Koskinen removed by impeaching him for his role in covering up Lerner's crimes, his misleading a congressional investigation, his obstruction of Congress (defying a subpoena), and outright lying to Congress. Unfortunately, on December 6, House GOP leaders managed to derail impeachment, forcing the debate back to a committee for more study, where it silently died when Congress adjourned at the end of the year.
While most believe the scandal and the government abuse subsided in 2013 when the Treasury Inspector General for Tax Administration released an audit report concluded that the IRS had in fact used inappropriate criteria to identify, target, and then harass Tea Party and other conservative organizations in their applications for 501(c) tax-exempt status, the fact is that the IRS continued to improperly use its power to influence the 2016 presidential campaign and apparently still has hold-over rogue elements from the Obama administration who are secretly trying to undermine Donald Trump's presidency. How else could Donald Trump's tax returns have been leaked? How else was it possible that Trump's 1995 tax information was leaked during the 2016 presidential election season to Clinton's team, just in time for the presidential debates? How can we forget her accusation and then the ensuing political pressure from the media for Trump to release his tax returns. Remember what she said in the September 2016 debate; "You've gotta ask yourself, why won't he release his tax returns? And I think there may be a couple of reasons. First, maybe he's not as rich as he says he is. Second, maybe he's not as charitable as he claims to be. Third, we don't know all of his business dealings, but we have been told, through investigative reporting that, he owes about $650 million to Wall Street and foreign banks. Or maybe he doesn't want the American people, all of you watching tonight, to know that he's paid nothing in federal taxes. Because the only years that anybody has ever seen, were a couple of years where he had to turn them over to state authorities when he was trying to get a casino license. And they showed he didn't pay any federal income tax."
And how was it that an "anonymous" package with Trump's 2005 tax return and tax info was mailed to the New York Times in early March? [See my article "How Quickly Trump's Tax Return Story Has Disappeared," April 23, 2017]. Someone at the IRS, apparently still having the capability of treating it as a rogue agency, committed a felony. And Rachel Maddow of MSNBC, who received the tax returns from the Times and who was salivating over the chance to humiliate Trump, chose to insinuate that our President was the criminal and not the felon from the federal government.
Why do I suggest that the "leaked" tax information during the presidential campaign season and the anonymous package to the NY Times containing Trump's 2005 tax return came from a rogue element still entrenched in the IRS? Oh geeeezz, let me see… All one needs to do is recall the 2012 targeting of Tea Party and other conservative groups by the IRS for the purpose of reelecting President Obama. The thought of someone at the agency doing a similar favor for Obama's successor doesn't seem so far-fetched. The tendency to hold on to power is natural. Machiavelli explained this to us. The link between the IRS and Trump's leaked tax returns is persuasive.
Furthermore, the history and modus operandi of both Hillary Clinton and Lois Lerner, head of the Exempt Organizations Unit of the IRS and mastermind of the Tea Party targeting scandal, appear very similar similar…. break rules, skirt the law, and then destroy evidence by deleting emails and destroying hard drives and servers. It's a Democrat thing. They benefit from the lawbreaking but escape justice by destroying evidence, which is itself a crime. Both used their positions in government not to genuinely and constitutionally serve the legitimate interests of the American people in general, but rather to advance personal and/or political goals. Lerner targeted the Tea Party. And Hillary collected lots of money by making personal deals while as Secretary of State to enrich her presidential campaign. And then she had officials of the government "provide" her with ammunition (Trump's tax returns) to beat Donald Trump. Both "lost" or destroyed the emails that would have proven their crimes.
The New York Times says "someone" sent the documents to a reporter so it has no criminal liability in publishing it. Constitutional law is fairly firm on this point. But as a lawyer, I find that at times it fails to pass the "smell test." In other words, the policy sometimes stinks!! How is an ordinary citizen supposed to reconcile this reality: "If a private citizen receives stolen property, they go to jail. But if a reporter receives stolen documents, they receive the Pulitzer Prize." [Daniel John Sobieski, "Rogue IRS Felons Vindicate Trump." American Thinker]. To the very end, the Obama administration, through the officials he put in place, used the power of the federal government for strictly political purposes – for the purpose of assassinating the character of a presidential candidate, helping Hillary Clinton win the election, and to further entrench the agenda of the Democratic party in government. The IRS had never ceased serving as the nefarious arm of the political left to target conservatives and lessen their chances in the political arena. And even as a new administration is taking over the federal government, Obama officials still in remaining at the agency are using the same power to obstruct the efforts of a legitimately-elected president of another (an opposing) political party.
Think about this – Hillary Clinton, as a candidate for president, continued to receive the highest levels of support from the government (including control of the media and access to illegally-disclosed confidential information) even after she had abused that government's power and prestige and had clearly broken many of the laws put in place to provide transparency to the American people. And, the President of the United States and the Democratic Party (the party having full control and power in government) co-opted all the functions, resources, and instrumentalities of t government, and their influence/pressure as well, in order to help her and to interfere in the campaign of a presidential candidate that threatened their power. It wasn't the Russians. It was the Obama administration itself. If this isn't the definition of government tyranny or the definition of government corruption, I don't know what is.
It's about time the American people learned the true extent to which the government had turned on them, had violated their precious liberties, sought to target and silence them, and threatened their voice in government. This investigation is necessary so that We the People, and conservative watchdog groups, can seek protections to make sure it never happens again.
We exercise the First Amendment so that we don't have to exercise the Second !!
INTRO —
We all know how fundamental the rights of conscience, religion, and speech are. The rights of conscience and religion are the beginnings of thought. Speech is how we express that thought.
More than that, from a liberty point of view, it is our first amendment right that protects all the others by giving voice and publication when government violates them. It alerts the People to weigh for themselves how much they value their rights and liberties. And then it is the second amendment that ultimately secures all other rights from tyranny in government.
In the IRS scandal, we had the Obama administration using the IRS as a tool of terror, of intimidation to silence the Tea Party – his party's political opposition. In theory and practice, it was much like Hitler and his gestapo. Political speech was frozen by government action, first and foremost, and then there were the Tea Party groups and folks who self-censored for fear of having the IRS target them, audit them, and god-forbid come up with some trumped-up charge to make their lives a living hell, fine them, or imprison them.
Why? Because he was working to win the 2012 election for himself and his party and to win mid-term elections. In fact, documents released just last week by Judicial Watch confirm that President Obama's IRS improperly targeted conservatives in order to help him win the 2012 presidential election.
On April 14, 2015, Judicial Watch announced it filed a Freedom of Information Act (FOIA) lawsuit against the IRS seeking "any and all records" related to the selection of both individuals and organizations for audits based upon applications filed requesting nonprofit tax status.
Political speech and expression is the most protectable form of speech; it was intended to help We the People flesh out ideas, assess honestly and fully what the government is doing, figure out which candidates are best to govern on our behalf, and to see that government operates as best and as responsibly as possible from our end. Our Founding Fathers appreciated the importance of protected political speech from the lessons taught throughout the colorful history of England. We can never forget that the government is OUR government and not the government of a political party. It operates on us, as individuals, in our lives, our property, our revenue, our liberty, and in our ability to live freely. Political parties are merely political organizations looking for power, not human results.
THE IRS and TAX-EXEMPTION —
US federal tax law, specifically Section 501(c)(4) of the IRS code (26 U.S.C. § 501(c)), exempts certain types of nonprofit organizations from having to pay federal income tax. The statutory language of IRC 501(c)(4) generally requires civic organizations described in that section to be "operated exclusively for the promotion of social welfare". Treasury regulations interpreting this statutory language apply a more relaxed standard, namely, that the organization "is operated primarily for the purpose of bringing about civic betterments and social improvements." As a result, the IRS traditionally has permitted organizations described in IRC 501(c)(4) to engage in lobbying and political campaign activities if those activities are not the organization's primary activity.
TIMELINE of the IRS SCANDAL —
(1) On January 21, 2010, the Supreme Court decided Citizens United v. Federal Election Commission, 558 U.S. 310 (2010) is a U.S. constitutional law and corporate law case dealing with the regulation of campaign spending by organizations. The United States Supreme Court held (5–4) that freedom of speech prohibited the government from restricting independent political expenditures by a nonprofit corporation. The principles articulated by the Supreme Court in the case have also been extended to for-profit corporations, labor unions and other associations.
All of a sudden, non-profit groups could spend money to engage in political activity and to influence elections. At the time, the Tea Party movement had just taken off, and:
Most of the applications to the IRS for tax-exempt 501(c) status were conservative groups, and
Most of the money pouring into TV and radio ads to influence elections were from conservative groups to benefit Republican candidates
(2) Beginning in March 2010, when the Tea Party movement was the rage, the IRS more closely scrutinized certain organizations applying for tax-exempt status under sections 501(c)(3) and 501(c)(4) of the Internal Revenue Code by focusing on groups with certain words in their names. IRS staffers began flagging applications from groups with politically themed names like "We the People" and "Take Back the Country." Staffers also targeted groups whose names included the words "Tea Party," "patriots," and "912" (a movement started by Glenn Beck). Those flagged applications were then sent to specialists for a more rigorous review than is typical. (This info, this timeline, came from a draft report by the Treasury Inspector General for Tax Administration, May 2013).
In May 2010, some employees of the "Determinations Unit" of the Cincinnati office of the IRS, which is tasked with reviewing applications pertaining to tax-exempt status, began developing a spreadsheet that became known as the "Be On the Look Out" ("BOLO") list.
The list, first distributed in August 2010, suggested intensive scrutiny of applicants with names related to a number of political causes, including names related to the Tea Party movement and other conservative causes. Eventually, IRS employees in Ohio, California, and Washington, DC applied closer scrutiny to applications from organizations that:
referenced words such as "Tea Party", "Patriots", or "9/12 Project", "progressive," "occupy," "Israel," "open source software," "medical marijuana" and "occupied territory advocacy" in the case file;[34][35]
outlined issues in the application that included government spending, government debt, or taxes;
involved advocating or lobbying to "make America a better place to live";
had statements in the case file that criticized how the country is being run;
advocated education about theConstitution and the Bill of Rights;
were focused on challenging thePatient Protection and Affordable Care Act—known by many as Obamacare;
questioned the integrity of federal elections.
Over the two years between April 2010 and April 2012, there was an increase of applications for 501(c) tax-exempt status – from 1,500 applications to more than double that amount, 3,400. The government (controlled by Democrats) took notice. The IRS essentially placed on hold the processing of applications for 501(c)(4) tax-exemption status received from organizations with "Tea Party", "patriots", or "9/12" in their names. While apparently none of these organizations' applications were denied during this period, only 4 were approved. During the same general period, the agency approved applications from several dozen presumably liberal-leaning organizations whose names included terms such as "progressive", "progress", "liberal", or "equality. Only 3 groups were targeted had the word "occupy" in their name.
Tea Party groups targeted by the IRS for scrutiny and delay were forced to provide such information as:
Names, addresses, and emails of all their members
Names, addresses, and emails of everyone who has ever attended any of their meetings
The names of the donors, contributors, and grantors. If the donor, contributor, or grantor has run or will run for a public office, identify the office. If not, please confirm by answering this question "No".
The amounts of each of the donations, contributions, and grants and the dates you received them.
How did the group use these donations, contributions, and grants. Provide Details.
A copy of every presentation given by every speaker at their meetings
A copy of the flyer or announcement for each meeting
Copies of all materials passed out at all meetings
Biographies of every speaker at their meetings
"Provide the following information for the income you received and raised for the years from inception to the present. Also, provide the same information for the income you expect to receive and raise for 2012, 2013, and 2014."
Copies of any contracts the group is a party to
Copies of all training materials the group has used or will use with the Koch Foundation
Copies of stories and articles that have been published about the organization and/or any of its members.
Organizations were told that if the information was not provided, they would not be certified as "tax-exempt." And even if all the information was provided, the IRS would scrutinize it and further delay the application by following up with probing questions. For example, The Coalition for Life of Iowa, a pro-life group, was asked to "Please explain how all of your activities, including the prayer meetings held outside of Planned Parenthood are considered educational as defined under 501(c)(3). Please explain in detail the activities at these prayer meetings. Also, please provide the percentage of time your group spends on prayer groups as compared with other activities of the organization."
(3) In June 2011, Lois Lerner, Director of the director of the Exempt Organizations Unit of the Internal Revenue Service (IRS), reportedly became aware of what was going on and directed staffers to change to how they vetted nonprofit applications.
(4) By the spring of 2012, so many conservative groups had complained about the IRS harassing them that Republicans in Congress took notice. Rep. Charles Boustany (R-La.) sent the IRS a letter asking why it was targeting Tea partiers, and Rep. Darrell Issa (R-Calif.) held a hearing in which he grilled then-IRS Commissioner Douglas Shulman, a George W. Bush appointee, over the agency's treatment of conservative groups. Shulman denied that his agency was targeting conservatives, and the controversy remained quiet until Lerner's apology (in May; see below).
(5) In early May 2013, the Treasury Inspector General for Tax Administration, Michael McKenney, released a preliminary audit report confirming that the IRS used inappropriate criteria to identify potential political cases, including organizations with Tea Party in their names. The final report would be released on May 14.
(6) On May 10, in advance of the public release of the audit findings, Director of the IRS Exempt Organizations division of the IRS, Lois Lerner, "apologized" for what she termed were "absolutely inappropriate" actions by the IRS. She would then blame the actions on lower-ranked employees out of a Cincinnati office.
(7) On May 12, Republican and Democratic lawmakers called for a full investigation of the IRS. At a press conference the next day, President Obama called the charges "outrageous" if true, and said those responsible should be held accountable. On May 14, Attorney General Eric Holder ordered the Justice Department to begin an investigation as to whether the conduct amounted to criminal behavior.
(8) The Treasury Inspector General for Tax Administration found gross violations. His investigation found that of the 296 total conservative non-profit applications reviewed in the audit conduct in December 2012, no work at all was conducted on them for at least 13 months. Of those 296 applications, 108 had been approved, 28 were withdrawn by the applicant because of frustration and seeming harassment, none had been denied, and 160 were left open – without moving them forward – for more than three years and spanning two election cycles, During that time, the organizations were hit with burdensome questions and numerous requests for more information.
Clearly, the IRS was abusing its power. Clearly, the Obama administration was abusing its government power to silence political opposition.
(9) In early May, following the Inspector General's report, the House Committee on Oversight and Government Reform, chaired by Rep. Darrell Issa (R-OH), began an investigation into the IRS. Additionally, the House Committee on Ways and Means expanded its ongoing 2011 investigation into possible IRS political targeting.
On May 22, 2013, in her opening statement to the Oversight Committee, Lois Lerner stated: "I have not broken any laws. I have not violated any IRS rules or regulations. And I have not provided false information to this or any other congressional committee." Lerner then invoked her Fifth Amendment right against self-incrimination and refused to testify.
House Republicans dismissed Lerner's invocation of the Fifth Amendment as ineffective, with chairman Issa (R- OH) stating: "You don't get to use a public hearing to tell the public and press your side of the story and then invoke the Fifth." Democrats characterized the contempt proceeding as a "witch hunt" geared toward the 2014 midterm elections.
(10) In June 2013, the IRS revealed that it had selected political groups applying for tax-exempt status for intensive scrutiny based on their names or political themes. In other words, they were intentionally targeting conservative groups – particularly ones with the name "Tea Party" or "Patriot" or "912" in their name. It admitted that it improperly frustrated and held up their applications. Judicial Watch has recently confirmed (thanks to documents obtained under the Freedom of Information Act) that the targeting began in 2010.
(11) In August 2013, Democratic congressman Chris Van Hollen (Md) filed suit against the IRS seeking to overturn a rule that had been on the books since 1959 which allowed social welfare groups to engage in political activity. For 54 years, the IRS has respected that rule and has allowed 501(c)(4) groups to engage in political activity, as long as it wasn't their primary mission. That rule has been widely interpreted as allowing such tax-exempt groups to spend 49% of their money on politics — without disclosing where that money came from.
It was this 1959 IRS rule that was at the center of Tea Party scandal.
However, more insidiously, the law suit had a lot to do with the greater flexibility granted to groups to engage in political expression with the 2010 Citizens United Supreme Court decision.. This case overturned many previous restrictions on political campaign spending and allowed nearly unlimited and often anonymous spending by corporations and other groups to influence elections. Some Tea Party leaders began forming political action committees as offshoots of their 501(c)-tax-exempt organizations – 501(c)(4) groups – to spend money to influence elections or at least to become politically involved.
So, in 2012, Obama won re-election, although very narrowly. Tea Party groups were actively speaking out against Obamacare and his bail-out policies, and everything else. And now they have been empowered to continue being active, by the Citizens united decision. Tea Party groups started raising money and pouring money into what is called "anonymous politics" – not being part of the Republican or Democratic parties. Ordinary citizens, exercising their right of political expression in groups (where there is more power than being exercised at the individual level).
In September 2010, it was reported by The New York Times that almost all of the biggest players among third-party groups, in terms of buying television time in House and Senate races since August of that year, have been 501(c) organizations, and their purchases have heavily favored Republicans…. Remember, the Tea Party movement essentially started in 2009 – 2010. [CNBC's Rick Santelli was on the floor of Chicago's mercantile exchange in Feb. 2009, ranting about the government's bail-out policy and announced: He urged all capitalists to join him to start a new Tea Party movement].
Between 2010 and 2012, the number of applications the IRS received each year seeking 501(c)(4) certification doubled, many being Tea Party groups and other conservative groups. Democrats became worried. By early 2012, House and Senate Democrats started pressuring the IRS to scrutinize 501(c) non-profit applications and make sure they aren't seeking the status to engage in political activity.
Van Hollen, who was chairman of the Democratic Congressional Campaign Committee, by filing the lawsuit sought to force the IRS to draft new rules requiring that the tax-exempt 501(c)(4) groups strictly comply with the section of the IRS code that requires such groups to be "operated exclusively for the promotion of social welfare." Van Hollen and the Democratic Congressional Campaign Committee sought to limit conservative 501(c) non-profit groups from pouring money into political campaigns.
Apparently, Van Hollen didn't like how Democrats were responding to the emerging scandal which had just broken 2 months earlier and was hoping to emphasize the point that under the Obama administration, the IRS was merely trying to resolve the legal issues surrounding political activities by tax-exempt groups and return to the intention of the IRS code for tax exemption – to further social work.
Jay Sekulow and his American Center for Law & Justice, represented 41 Tea Party groups and sued the IRS over what he called "Political Targeting." He said that Van Hollen's agenda raises "serious First Amendment issues."
Sekulow said: "Political speech is protected by the First Amendment. Anonymous pamphleteering is as old as our country, and deserves just as much constitutional protection." He also said: "If Van Hollen wants to change the code, he should do that through the legislative process" and not try to by-pass the rightful branch, the legislative branch, by going to the improper branch, the judicial branch (or the federal courts).
(12) On January 15, 2014, the FBI announced that it had found no evidence warranting the filing of federal criminal charges in connection with the affair. The FBI stated it found no evidence of "enemy hunting" of the kind that had been suspected, but that the investigation did reveal the IRS to be a mismanaged bureaucracy enforcing rules that IRS personnel did not fully understand. The officials indicated, however, that the investigation would continue.
Disturbingly, in February, while the investigation by the Department of Justice (DOJ) was ongoing, President Obama stated there was "not a smidgeon of corruption" at the IRS.
(13) On April 9, the House Committee on Ways and Means voted to send a letter to the Department of Justice referring former IRS Exempt Organizations Division Director Lois G. Lerner for criminal prosecution. The Committee's nearly three-year investigation uncovered evidence of willful misconduct on the part of Ms. Lerner. In particular, the Committee found that Ms. Lerner used her position to improperly influence IRS action against conservative organizations, denying these groups due process and equal protection rights under the law. The Committee also found she impeded official investigations by providing misleading statements in response to questions from the Treasury Inspector General for Tax Administration. Finally, Lerner risked exposing, and it was actually alleged (even in a lawsuit) that she did expose, confidential taxpayer information, in apparent violation of IRS section 6103 by using her personal email to conduct official business.
(14) Two months later, on June 13, the IRS notified Republican congressional investigators that it had lost Lerner's emails from January 2009 to April 2011 because of a mid-2011 computer crash. The emails were under subpoena as part of the congressional investigation. June 19, the IRS said that the damaged hard drive containing Lerner's missing emails had been disposed of more than two years prior.
On July 9, 2014, Republicans released an April 13, 2013 email from Lerner in which she cautioned colleagues to "be cautious about what we say in emails."
(15) On September 5, the IRS said it lost additional emails of five workers under congressional investigation, blaming computer crashes. These five workers include two people based in Cincinnati who worked on Tea Party cases. According to the IRS, the crashes all predate congressional investigations and had occurred between September 2009 and February 2014.
(16) On September 5, 2014, the Senate Permanent Subcommittee on Investigations released its report on the scandal, finding that inappropriate screening criteria were definitely used but concluded that there was no intentional wrongdoing or political bias in the use of the criteria. A few months later, in December, Chairman Issa released a new report that found that "the IRS's inability to keep politics out of objective decisions about interpretation of the tax code damaged its primary function: an apolitical tax collector that Americans can trust to treat them fairly."
(17) In January 2015, the US Senate requested that the White House produce all communications it has had with the IRS since 2010.
(18) On August 5, 2015, the Senate Finance Committee released a report that concluded that management at the IRS had been "delinquent in its responsibility to provide effective control, guidance, and direction over the processing of applications for tax-exempt status filed by Tea Party and other political advocacy organizations" and that it was only guilty of poor planning and oversight.
(19) In October 2015, the Justice Department notified Congress that there would be no charges against the former IRS official Lois Lerner or against anyone else in the IRS. The investigation found no evidence of illegal activity or the partisan targeting of political groups and found that no IRS official attempted to obstruct justice. The DOJ investigation did find evidence of mismanagement and Lerner's poor judgement in using her IRS account for personal messages but said "poor management is not a crime."
(20) Four days after the Justice Department closed its investigation, 19 members of the House Oversight and Government Reform Committee led by the Committee's Chairman, Jason Chaffetz (R-UT), filed a resolution to impeach IRS Commissioner John Koskinen. Those sponsoring the impeachment resolution to remove Koskinen from office accused him of failing to prevent the destruction of evidence in allowing the erasure of back-up tapes containing thousands of e-mails written by Lois Lerner, and of making false statements under oath to Congress. In a statement released by the Committee, Chaffetz said Koskinen "failed to comply with a congressionally issued subpoena, documents were destroyed on his watch, and the public was consistently misled. Impeachment is the appropriate tool to restore public confidence in the IRS and to protect the institutional interests of Congress."
(21) Last month, as part of an ongoing investigation into the IRS scandal and an ongoing inquiry by Judicial Watch, the government released names of 426 organizations which had been improperly targeted by the IRS because of their politics. Another 40 were not released as part of the list because they had already opted out of being part of the class-action suit. That total is much higher than the 298 groups the IRS' Inspector General identified back in May 2013, when investigators first revealed the agency had been subjecting applications to long and potentially illegal delays, and forcing them to answer intrusive questions about their activities.
(22) Courts have already ruled against the IRS. For example, in 2016, the Sixth Circuit Court of Appeals did so and noted in its ruling: "501(c)(4) groups may not collect tax-deductible donations, but they may engage in relatively unfettered political advocacy, including election advocacy. 501(c)(4) groups range from national organizations—including the American Civil Liberties Union, the National Rifle Association, and the Sierra Club—to local neighborhood associations."
(23) There has been a lawsuit filed by Judicial Watch and its investigation into the scandal continues. It has just received almost 700 pages of documents (61% redacted) under the Freedom of Information Act which proves the scheme by the Obama administration to target Tea Party groups into silence and inactivity in political elections. Its current lawsuit is seeking at least 7000 pages of documents related to the IRS scandal that have been hidden from Congress and the American people. The IRS, under the Obama administration, intentionally sought to restrict Tea Party activity and especially in political elections.
Responding to the lawsuit, Thomas Kane, Deputy Assistant Chief Counsel for the IRS, wrote in a sworn declaration that Lerner's Blackberry was "removed or wiped clean of any sensitive or proprietary information and removed as scrap for disposal in June 2012." In a USA Today opinion column, James S. Robbins wrote, "For a scandal that is frequently derided as 'fake,' it is amazing how often real evidence disappears. The disappearing act is so frequent, it is reasonable to wonder whether it is really a systematic attempt to destroy evidence of abuse of power."
(24) The current US Attorney General, Jeff Sessions, has been asked by Congressional Republicans to re-evaluate the evidence against the IRS and against Lois Lerner and re-open the investigation. At present, Sessions seems noncommittal on the matter. Taxpayers deserve to know that the DOJ's previous evaluation was not tainted by politics.
TARGETING POLICIAL OPPOSITION IS TYRANNY –
The IRS scandal was egregious and conservatives should be enraged. I would say all Americans should be enraged but judging from the conduct of Democrats, they seem to be fine with anything that shuts up a conservative – even if it means denying their basic constitutional rights. But an assault on the rights of one group in the end will be an assault on everyone's rights down the road. Looking the other way while the government violates the rights of certain citizens is a dangerous thing. Allowing the government to get away with it is worse. Allowing the government to silence political opposition is to put our free society at risk.
As President Harry Truman once warned: "Once a government is committed to the principle of silencing the voice of opposition, it has only one way to go, and that is down the path of increasingly repressive measures, until it becomes a source of terror to all its citizens and creates a country where everyone lives in fear." [In a Special Message to the Congress on the Internal Security of the United States, August 8, 1950]
Audit Report from the Treasury Inspector General for Tax Administration, "Inappropriate Criteria Were Used to Identify Tax-Exempt Applications for Review." Referenced at: https://www.treasury.gov/tigta/auditreports/2013reports/201310053fr.html
Diane Rufino, "How Quickly Trump's Tax Return Story Has Disappeared," Forloveofgodandcountry blog, April 23, 2017. Referenced at: https://forloveofgodandcountry.com/2017/04/23/how-quickly-the-trump-tax-return-story-has-disappeared/
IRS Targeting Controversy, Wikipedia. https://en.wikipedia.org/wiki/IRS_targeting_controversy
"The Sixth Circuit Court of Appeals: Another Court Ruling Confirms IRS Illegally Targeted Tea Party and Conservative Groups," CEI.org, November 21, 2016. Referenced at: https://cei.org/blog/another-court-ruling-confirms-irs-illegally-targeted-tea-party-and-conservative-groups
Andy Kroll, "The IRS Tea Party Scandal Explained," Mother Jones, November 21, 2013. Referenced: http://www.motherjones.com/politics/2013/05/irs-tea-party-scandal-congress-nonprofit-obama
Stephen Dinan and Seth McLaughlin, "House Republicans Derail Impeachment Effort Against IRS Commissioner, John Koskinen, IRS Commissioner," The Washington Times, December 6, 2016. Referenced at: http://www.washingtontimes.com/news/2016/dec/6/john-koskinen-irs-commissioner-spared-impeachment-/
David Barstow, Russ Bruettner, Susanne Craig, and Megan Twohey, "Donald Trump Tax Records Show He Could Have Avoided Taxes for Nearly Two Decades," The New York Times, November 2, 2016. Referenced at: https://www.nytimes.com/2016/10/02/us/politics/donald-trump-taxes.html
Adam Liptak, "Is It Illegal to Publish a President's Tax Returns," The New York Times, March 15, 2017. Referenced at: https://www.nytimes.com/2017/03/15/us/politics/trump-tax-returns-legal-precedent.html
Daniel John Sobieski, "Rogue IRS Felons Vindicate Trump," American Thinker, March 16, 2917. Referenced at: http://www.americanthinker.com/articles/2017/03/rogue_irs_felons_vindicate_trump.html
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How Quickly Trump's Tax Return Story Has Disappeared
During the September 26, 2016 presidential debate, candidate Hillary Clinton hinted that her opponent, Donald Trump, was hiding something by not releasing his taxes. Who can forget her attack: "You've gotta ask yourself, why won't he release his tax returns? And I think there may be a couple of reasons. First, maybe he's not as rich as he says he is. Second, maybe he's not as charitable as he claims to be. Third, we don't know all of his business dealings, but we have been told, through investigative reporting that, he owes about $650 million to Wall Street and foreign banks. Or maybe he doesn't want the American people, all of you watching tonight, to know that he's paid nothing in federal taxes. Because the only years that anybody has ever seen, were a couple of years where he had to turn them over to state authorities when he was trying to get a casino license. And they showed he didn't pay any federal income tax." Most of us shook our heads at the audacity of the likes of Hillary Clinton, a serial liar, cheat, intimidation expert, and lawbreaker, and known roundly for her lack of ethics, morals, and decency (particularly in a so-called charitable organization, the Clinton Foundation, which turned out to be a sham or front for her own campaign financing)
When Trump's 2005 tax returns were inappropriately leaked (the smear campaign against Donald Trump already in full swing), Rachel Maddow, and MSNBC, couldn't wait to treat their rabid progressive audience to what they were sure was evidence of a tax-evader. And so, on air, Maddow, filled with the kind of exuberance that only liberals and progressives are capable of – in anticipation of destroying the reputation of a hardworking, patriotic, conservative family man, exposed Trump's tax results.
The only thing…. Trump's tax returns weren't at all what she, or the left, were expecting. Not only did Trump not escape paying taxes, but he paid a higher rate than the likes of Bernie Sanders and Barack Obama. The Obamas paid an effective tax rate of only 18.7% in 2015. Bernie Sanders paid a federal tax rate of only 13.5% in 2014. Ironically, Comcast, the parent of MSNBC, paid a tax rate of only 24% from 2008 through 2012, less than Trump's 2005 effective rate of roughly 25.3%. Trump paid $38 million in taxes on an income of $150 million.
Back in 1995, Trump had serious financial issues. We know this because of another "inappropriate" leak of Trump's tax returns. In fact, by the early 1990's, Trump was hemorrhaging money and was on the hook for hundreds of millions of dollars. He was heading toward personal bankruptcy as a result of a series of misguided investments and mismanagement of his company in the late 1980's which ended up forcing him to borrow money from his family. Trump suffered a staggering loss of $916 million in 1995 – enough to allow him to take advantage of a tax law which would permit him to avoid paying income taxes for 18 years.
Perhaps Hillary Clinton and her campaign strategists took a gamble on this information, using it to make the bold accusation that Trump wasn't releasing his tax returns because he wasn't in fact, paying taxes. This, of course, begs the follow-up: She must have been given this information in advance; someone must have leaked information to her and the campaign prior to its release through the news that Trump suffered such devastating losses that surely he was exempt from paying federal income tax. Was that Hillary's "October surprise"?
Trump's tax information was leaked to the New York Times; it was received by an "anonymous" package in the mail. It then made it to Maddow and to all other news outlets. Those who gleefully exposed it, hoping it would embarrass and harm Trump's legitimacy for the presidency, suffered ridicule and embarrassment themselves. We enjoyed watching them with egg on their faces.
Indeed, Trump's near-billion-dollar loss in 1995 might have been the single biggest net operating loss in the country that year, amounting to almost 2 percent of the total "net operating losses" reported by all American taxpayers who used the same tax provision as Trump.
Sure, Donald Trump did not pay federal income tax in 1995, and perhaps even a few years after that. But as the leaked 2005 tax return shows, he chose NOT to take advantage of a tax law that Congress itself put into the IRS code to enjoy relief from taxes for nearly two decades.
That speaks to the man that is Donald Trump.
Trump may not be as good a businessman as he claims nor as rich, but he is clearly an honest-enough taxpayer and loyal American who believes that if he has made money in this country, he is obligated to pay taxes and not shift the burden to the middle class to pay the taxes he should. He doesn't have the intuition of a Hillary Clinton to break and skirt the law, nor the audacity of a Bernie Sanders, who paid minimal while being quite rich.
This story goes to show one thing — Liberals and Democrats are so happy to go after conservatives and Republicans for character assassination. All too often, as in this case, we find the charges to be baseless or trumped up (couldn't resist!) and in the end, we find that, by comparison, liberals and Democrats are guilty of far worse and have gotten away with it.
Maybe the American people will begin to take accusations by the left a little less seriously, maybe they will begin to note the glaring hypocrisy, and maybe – just maybe – they will give President Donald Trump a chance to help the American people, as a whole, and to Make America Great Again !!
Abigail Tracy, "Trump's Financial Troubles in the Early 1990's Were Even Worse Than Anyone Thought," Vanity Fair, October 4, 2016. Referenced at: http://www.vanityfair.com/news/2016/10/donald-trump-financial-troubles-taxes-1990s
Posted in Uncategorized	| Tagged 2005 tax returns, Diane Rufino, Donald Trump, fake news, Hillary Clinton, IRS, liberal accusations, NY Times, Rachel Maddow, tax returns, Trump, Trump's 2005 tax returns, Trump's tax returns, Trump's taxes	| Leave a reply
Time for Another Tax Revolution: Abolish the Federal Income Tax and the IRS With It!
by Diane Rufino, July 3, 2013
The 16th Amendment states: "The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration."
The Sixteenth Amendment, which gave the American people the affliction of confiscatory income taxes, is 100 years old this year. It was ratified on February 3, 1913.
One hundred years of affliction is a long time. The time has come for tax reform…. No, the time has come for a tax revolution.
The IRS, which is in charge of collecting the income tax revenue, is 138 years old. It was created by President Abraham Lincoln in 1862. It has gone from being an agency that terrorizes citizens over their tax returns to an agency that terrorizes citizens based on their speech and political viewpoint. Wouldn't it be nice if the American people, being in charge of their government, could walk into the massive IRS building in DC and deliver the line that has made Donald Trump famous: "You're Fired!"
The Sixteenth Amendment was proposed in 1909 and adopted in 1913. The proposal of a constitutional amendment to give Congress the power to impose an income tax began as a scheme of political maneuvering that went horribly awry. In fact, the proponents, House and Senate Republicans who were in a battle for a new tariff bill, proposed the amendment as a political trick and expected the proposal to be killed by the States during the ratification phase, thereby making a popular and political statement that the American people in general do not want an income tax. But the plan backfired. A brief overview of the history of the income tax, including the Sixteenth Amendment in the United States is provided below.
The Founding Fathers had rejected income taxes, as well as any other direct taxes, unless they were apportioned to each state according to population. At the time of our founding, wealth was measured in terms of property rather than income. Property was the goal of freedom. One exercised his inalienable rights to "pursue" happiness and obtain property. Our founders didn't talk much in terms of "income." They rejected the income tax entirely, but when they spoke of taxes they recognized the need for uniformity and equal protection to all citizens. "All duties, imposts and excises shall be uniform throughout the United States." "Direct Taxes shall be apportioned among the several States." "No direct tax shall be laid, unless in proportion to a census." This is what the US Constitution reads. Then, the 14th Amendment promised "equal protection of the laws" to all citizens. The principle behind the progressive income tax – the more you earn, the larger the percentage of tax you must pay – would have been appalling to the founders. They recognized that, in James Madison's words, "the spirit of party and faction" would prevail if Congress could tax one group of citizens and confer the benefits on another group.
In Federalist No. 10, Madison asked, "What are the different classes of legislators but advocates and parties to the causes which they determine?" He talked about political factions, the reasons for them, the "mischiefs" presented by them, and apportionment of taxes. He wrote, most prophetically:
"A faction is a number of citizens, whether amounting to a majority or a minority of the whole, who are united and actuated by some common impulse of passion, or of interest, adversed to the rights of other citizens, or to the permanent and aggregate interests of the community.
There are two methods of curing the mischiefs of faction: the one, by removing its causes; the other, by controlling its effects.
There are again two methods of removing the causes of faction: the one, by destroying the liberty which is essential to its existence; the other, by giving to every citizen the same opinions, the same passions, and the same interests.
It could never be more truly said than of the first remedy, that it was worse than the disease. Liberty is to faction what air is to fire, an aliment without which it instantly expires. But it could not be less folly to abolish liberty, which is essential to political life, because it nourishes faction, than it would be to wish the annihilation of air, which is essential to animal life, because it imparts to fire its destructive agency.
The second expedient is as impracticable as the first would be unwise. As long as the reason of man continues fallible, and he is at liberty to exercise it, different opinions will be formed. As long as the connection subsists between his reason and his self-love, his opinions and his passions will have a reciprocal influence on each other; and the former will be objects to which the latter will attach themselves. The diversity in the faculties of men, from which the rights of property originate, is not less an insuperable obstacle to a uniformity of interests. The protection of these faculties is the first object of government. From the protection of different and unequal faculties of acquiring property, the possession of different degrees and kinds of property immediately results; and from the influence of these on the sentiments and views of the respective proprietors, ensues a division of the society into different interests and parties.
The latent causes of faction are thus sown in the nature of man; and we see them everywhere brought into different degrees of activity, according to the different circumstances of civil society. A zeal for different opinions concerning religion, concerning government, and many other points, as well of speculation as of practice; an attachment to different leaders ambitiously contending for pre-eminence and power; or to persons of other descriptions whose fortunes have been interesting to the human passions, have, in turn, divided mankind into parties, inflamed them with mutual animosity, and rendered them much more disposed to vex and oppress each other than to co-operate for their common good. So strong is this propensity of mankind to fall into mutual animosities, that where no substantial occasion presents itself, the most frivolous and fanciful distinctions have been sufficient to kindle their unfriendly passions and excite their most violent conflicts. But the most common and durable source of factions has been the various and unequal distribution of property. Those who hold and those who are without property have ever formed distinct interests in society. Those who are creditors, and those who are debtors, fall under a like discrimination. A landed interest, a manufacturing interest, a mercantile interest, a moneyed interest, with many lesser interests, grow up of necessity in civilized nations, and divide them into different classes, actuated by different sentiments and views. The regulation of these various and interfering interests forms the principal task of modern legislation….
The apportionment of taxes on the various descriptions of property is an act which seems to require the most exact impartiality; yet there is, perhaps, no legislative act in which greater opportunity and temptation are given to a predominant party to trample on the rules of justice. Every shilling with which they overburden the inferior number, is a shilling saved to their own pockets."
So, our founders took the view that taxation of wealth by the government should be equal and apportioned.
Before the Civil War, the government received most of it revenue through tariffs (that is, taxing goods as they came into the ports). The South, being an agricultural community, relied heavily on imports and therefore generated most of the tariff revenue for the government (at least 70%). But then came the war, which meant ports were blockaded, ships were sunk, and in general, there was little money to spend on things that were not considered essential, and hence, there was almost no revenue from tariffs. Besides, the southern states had seceded and formed a new county and so their tariff revenue did not go to the federal government. So during the Civil War, Congress decided to try an income tax. It devised a really clever plan to get people to pay. It made the tax returns public. Essentially what would happen was this: If your neighbor saw you driving around on a brand new plow, he'd inquire through the public record how much he reported on his income tax. In order to avoid scrutiny and accusations, the rich would pay their required taxes. And in fact, the income tax fell almost exclusively on the rich.
The financial requirements of the Civil War prompted the first American income tax in 1861. On August 5, Lincoln imposed the first federal income tax by signing the Revenue Act of 1861. Strapped for cash with which to pursue the Civil War, Lincoln and Congress came up with a tax scheme to impose a 3% tax on annual incomes exceeding $800. The Revenue Act's language was broadly written to define income as gain "derived from any kind of property, or from any professional trade, employment, or vocation carried on in the United States or elsewhere or from any source whatever." (Interestingly, according to the US Treasury Department, the comparable minimum taxable income in 2003, after adjustments for inflation, would have been approximately $16,000). By 1862, however, the United States government realized that the war would not end quickly, and that revenue gained by this income tax would not be sufficient. So the tax was repealed and replaced by another income tax, one of a progressive nature, in the Revenue Act of 1862.
Thus, it was the Revenue Act of 1862 that introduced the first progressive income tax in America.
The First Progressive Income Tax –
The Revenue Act of 1862 proved to be more effective at raising money to fund the War. It contained three main provisions: (i) it established the office of the Commissioner of Internal Revenue, a department in charge of the collection of taxes; (ii) it levied excise taxes on many (a majority of) every day goods and services; and (iii) it introduced the first progressive tax. Indeed, this new tax reflected the taxpayers' "ability to pay" by separating citizens into multiple categories and taxing accordingly:
For individuals whose annual incomes were less than $600, no tax was collected.
For individuals whose annual incomes were greater than $600 and less than $10,000, a percentage of 3% of total income was demanded in tax.
For individuals whose annual incomes were greater than $10,000, a percentage of 5% of total income was demanded in tax.
The act also stated that in order to assure timely collection, income tax was "withheld at the source."
After the war when the need for federal revenues decreased, Congress, in the Revenue Act of 1870, let the tax law expire in 1873. However, one of the challenges to the validity of this tax finally reached the Supreme Court in 1880. The challenge was brought by a taxpayer. In Springer v. United States, the taxpayer contended that the income tax on his professional earnings and personal property income violated the "direct tax" requirement of the Constitution; that is, that is needed to be apportioned among the states. The Supreme Court concluded that the income tax was not a "direct tax" but rather an "excise tax," and hence did not need to be apportioned. The tax was upheld. [Excise taxes are taxes on the on the sale, or production for sale, of specific goods within a country. Excises are distinguished from customs duties, which are taxes on importation. Typical examples of excise duties are taxes on gasoline and other fuels, and taxes on tobacco and alcohol (sometimes referred to as sin tax].
Although the Revenue Act of 1862 was allowed to expire, government had already gotten a taste of the revenue that could be generated by taxing the income of American citizens, It wouldn't be long before it looked once again to American purses. During the years of Reconstruction and rebuilding the nation, the growing industrial and financial markets of the eastern US generally prospered. But the farmers of the south and west suffered from low prices for their farm products, while they were forced to pay high prices for manufactured goods. Throughout the 1870′s and 1880′s, farmers formed various political organizations such as the People's (Populist) Party and the National Farmers' Alliance) and advocated for a graduated income tax to relieve them of their tax burden. And so, in 1894, a Democratic-led Congress passed the Wilson-Gorman tariff (a high tariff bill) which imposed the first peacetime income tax. The rate was 2% on income over $4000, which meant fewer than 10% of households would pay any income tax. The purpose of the tax was to make up for revenue that would be lost by tariff reductions. This was a controversial provision at the time and it was almost immediately struck down by the Supreme Court in 1895, in a case calledPollock v. Farmers Loan & Trust Company. Once again, a taxpayer challenged the legality of the income tax. In Pollock, a taxpayer sued the corporation in which he owned stock, contending that they should never have paid the income tax because it was unconstitutional. In this case, the tax was paid on income from land, and Mr. Pollock argued that since a tax on real estate is a direct tax, then a tax on the income from such property must be a direct tax as well. Since the Constitution prohibited a "direct tax" unless certain conditions are met, Pollock argued that the income tax should be declared unconstitutional. (The "direct tax" argument had also been used by Mr. Springer in 1880, but because the income tax had been expired for eight years at that point, it is believed that the Court just wasn't interested in looking closely at the wording in the Constitution and making distinctions between the different types of taxes).
The Court in Pollock held that the income tax was a direct tax and as such, it had to be apportioned among the states according to their populations, as the Constitution sets forth in Article I, Section 2, clause 3 and in Article I, Section 9, clause 4. Since the tax at issue was not apportioned, it was struck down as unconstitutional.
The provisions at issue in the Pollock (and Springer) cases are as follows: Article I, Section 2, clause 3: "Representatives and direct Taxes shall be apportioned among the several States which may be included within this Union, according to their respective Numbers, which shall be determined by adding to the whole Number of free Persons, including those bound to Service for a Term of Years, and excluding Indians not taxed, three fifths of all other Persons." Article I, Section 8, clause 1 provides that "all duties, imposts, and excises shall be uniform throughout the United States." Article I, Section 9, clause 4 provides that "no capitation, or other direct tax shall be laid, unless in proportion to a census or enumeration herein before to be taken." Section 2 of the Constitution deals with the House of Representatives specifically. Section 8 gives to Congress certain enumerated powers. And Section 9 lists what is prohibited to Congress.
How does apportionment work, as per Article I, Section 2, clause 3? How would an "apportioned" income tax work? If an income tax is subject to apportionment, a state with one-tenth the national population, for example, has to bear one-tenth the aggregate tax liability, regardless of the state's financial condition. Suppose the populations of Iowa and Maine were equal, but Iowa's per capita income were twice Maine's. The rates for an apportioned income tax would have to be twice as high in Maine, the poorer state, as in Iowa.
How is direct tax supposed to based on a census, as per Article I, Section 9, clause 4? If the government desired to raise $10 million and New York had 20% of the total U.S. population at that time, then New York would be required to raise $2 million. If New York had 1 million residents, each resident would owe $2 in taxes. Obviously, a tax based on income could not achieve such proportionality, since incomes differed across individuals.
By the turn of the century, the progressive movement was entrenched in politics. It was the era of social unrest. The movement began after the Reconstruction era (the 1890′s) in order to modernize society to the new industrial age. The movement was based on the assumption that the old principles of our founding were no longer adequate and so it sought to reform society and the role of government by addressing certain economic, political, and cultural issues. The common view of the Progressive movement, aside from the dismantling of traditional institutions and founding principles, was that government would need to grow and be actively involved in these reforms at every level. Furthermore, it held that the existing constitutional system was too constrained and outdated and must be transformed into a dynamic, evolving instrument to effect social change. Another theme was that the focus of government on the rights of the individual would have to be surrendered to seek the best for society as a whole. In certain aspects, such as basic rights and protections for factory workers, the movement helped government serve society well. But in many other aspects, such as the movement's inherent hostility and resentment of the wealthy and its need to increase taxation to seek social justice, government veered sharply from its constitutional course.
At the same time, as public sentiment was changing, so did the complexion of the Supreme Court. The idea of using a tax to "soak the rich" began to take root among liberals in both major parties. Several times the Democrats introduced bills to provide a tax on higher incomes but each time the conservative branch of the Republican party killed it in the Senate. The Democrats used this as evidence that the Republicans were the "party of the rich" and should be thrown out of power.
In a speech on April 14, 1906, President Theodore Roosevelt endorsed a progressive estate tax:
"It is important to this people to grapple with the problems connected with the amassing of enormous fortunes, and the use of those fortunes, both corporate and individual, in business. We should discriminate in the sharpest way between fortunes well-won and fortunes ill-won; between those gained as an incident to performing great services to the community as a whole, and those gained in evil fashion by keeping just within the limits of mere law-honesty.
Of course no amount of charity in spending such fortunes in any way compensates for misconduct in making them. As a matter of personal conviction, and without pretending to discuss the details or formulate the system, I feel that we shall ultimately have to consider the adoption of some such scheme as that of a progressive tax on all fortunes, beyond a certain amount either given in life or devised or bequeathed upon death to any individual — a tax so framed as to put it out of the power of the owner of one of these enormous fortunes to hand on more than a certain amount to any one individual; the tax, of course, to be imposed by the National and not the State Government. Such taxation should, of course, be aimed merely at the inheritance or transmission in their entirety of those fortunes swollen beyond all healthy limits."
In 1907, he stepped up his campaign for several progressive additions to the nation's tax system. In his message to Congress on December 7, he urged lawmakers to consider an income tax:
"When our tax laws are revised the question of an income tax and an inheritance tax should receive the careful attention of our legislators. In my judgment both of these taxes should be part of our system of Federal taxation. I speak diffidently about the income tax because one scheme for an income tax was declared unconstitutional by the Supreme Court; while in addition it is a difficult tax to administer in its practical working, and great care would have to be exercised to see that it was not evaded by the very men whom it was most desirable to have taxed, for if so evaded it would, of course, be worse than no tax at all; as the least desirable of all taxes is the tax which bears heavily upon the honest as compared with the dishonest man. Nevertheless, a graduated income tax of the proper type would be a desirable feature of Federal taxation, and it is to be hoped that one may be devised which the Supreme Court will declare constitutional."
The inheritance tax was even more desirable, Roosevelt continued. Not only did it serve the cause of social justice, but it had been upheld by the federal courts:
"The inheritance tax, however, is both a far better method of taxation, and far more important for the purpose of having the fortunes of the country bear in proportion to their increase in size a corresponding increase and burden of taxation. The Government has the absolute right to decide as to the terms upon which a man shall receive a bequest or devise from another, and this point in the devolution of property is especially appropriate for the imposition of a tax. Laws imposing such taxes have repeatedly been placed upon the National statute books and as repeatedly declared constitutional by the courts; and these laws contained the progressive principle, that is, after a certain amount is reached the bequest or gift, in life or death, is increasingly burdened and the rate of taxation is increased in proportion to the remoteness of blood of the man receiving the bequest."
Roosevelt rejected arguments that an estate tax would penalize thrift.
"A heavy progressive tax upon a very large fortune is in no way such a tax upon thrift or industry as a like would be on a small fortune. No advantage comes either to the country as a whole or to the individuals inheriting the money by permitting the transmission in their entirety of the enormous fortunes which would be affected by such a tax; and as an incident to its function of revenue raising, such a tax would help to preserve a measurable equality of opportunity for the people of the generations growing to manhood. We have not the slightest sympathy with that socialistic idea which would try to put laziness, thriftlessness and inefficiency on a par with industry, thrift and efficiency; which would strive to break up not merely private property, but what is far more important, the home, the chief prop upon which our whole civilization stands. Such a theory, if ever adopted, would mean the ruin of the entire country–a ruin which would bear heaviest upon the weakest, upon those least able to shift for themselves. But proposals for legislation such as this herein advocated are directly opposed to this class of socialistic theories. Our aim is to recognize what Lincoln pointed out: The fact that there are some respects in which men are obviously not equal; but also to insist that there should be an equality of self-respect and of mutual respect, an equality of rights before the law, and at least an approximate equality in the conditions under which each man obtains the chance to show the stuff that is in him when compared to his fellows."
The Bailey Bill –
In 1909, progressives in Congress were talking once again about enacting an income tax. They were going to attempt, once again, to attach a provision for an income tax to a tariff bill. President William Howard Taft had called Congress into a special session in 1909, shortly after his inauguration, to discuss the issue. He wanted Congress to address tariff reform. House of Representatives immediately passed a tariff bill sponsored by Sereno E. Payne (R-NY), the House Majority Leader, which called for reduced tariffs, but including an inheritance tax to make up for lost revenue. However, the Senate quickly substituted a bill, written by Senator Nelson W. Aldrich (R-RI), Senate Majority Leader and chairman of the Senate Finance Committee, which called for fewer reductions and more increases in tariffs. Aldrich was a long-time advocate of protective tariffs. His answer was to increase the amount of duty items. The problem, however, was that there was an impending budget deficit that had to be addressed. A protracted debate ensued, and progressive Republicans maneuvered to add an income tax amendment to the Aldrich bill. In April, Senators Joseph W. Bailey, a populist Democrat from Texas, and Albert B. Cummins, a progressive Republican from Iowa, introduced separate versions of an income tax provision. A compromise version was reached between the two – which became known as the Bailey-Cummins amendment – for inclusion in the Senate bill. In response to this amendment, Senator Aldrich defiantly declared: "There will be no income tax, no inheritance tax, no stamp tax, and no corporation tax!" It soon became evident, however, that the opposition, comprised of Democrats and progressive Republicans from the Midwest, had enough votes to force the issue in the Senate and thereby enact an income tax. Seeking to avoid that humiliation, Aldrich met with President Taft.
In a message to a joint session of Congress on June 16, Taft first reiterated his support for tariff reform but warned of an impending budget deficit. On June 16, in a joint message to Congress, Taft In order to fend off Congress' proposed initiative for an income tax but yet provide for a mechanism to raise the revenue necessary (while making tariff reduction possible!), Taft recommended that Congress enact a tax of 2% on the income of a corporation "for the privilege of carrying on or doing business as a corporation in the United States." (Taft predicted – accurately, as it would later turn out – that the Supreme Court would view the corporate tax as an "excise" tax and not a "direct tax"). In his message, President Taft also endorsed the idea for a constitutional amendment that would grant Congress authority to impose a progressive income tax.
The debate in Congress was whether to include the income tax provision (Bailey-Cummins amendment) or the corporate tax provision in the tariff bill. This was June. Progressive Republicans (also known as "insurgent" Republicans) were joining the Democratic block in support of the income tax. Their position on income tax was summed up by comments made by Rep. William Sulzer (D-NY) on the House floor:
"I am now, always have been, and always will be in favor of an income tax, because, in my opinion, an income tax is the fairest, the most just, the most honest, the most democratic, and the most equitable tax ever devised by the genius of statesmanship. . . . At the present time nearly all the taxes raised for the support of the Government are levied on consumption—on what the people need to eat and to wear and to live: on the necessities of life; and the consequence is that the poor man, indirectly, but surely in the end, pays practically as much to support the Government as the rich man—regardless of the difference of incomes. This system of tariff tax on consumption, by which the consumers are saddled with all the burdens of Government, is an unjust system of taxation, and the only way to remedy the injustice and destroy the inequality is by a graduated income tax that will make idle wealth as well as honest toil pay its share of the taxes needed to administer the National Government."
The showdown by Democrats and Progressives regarding the Bailey amendment was perhaps intentionally orchestrated. The theory was that after the regular Republicans rejected the bill, the Democrats could then point a finger at them and claim, for political purposes, that Republicans rejected the Bailey bill to protect their corrupt wealthy corporate friends. They would use the rejection as proof of such an alignment between Republicans and the wealthy.
The conservative Republicans knew what the Democrats were up to and they launched a counter move. Facing an embarrassing loss on the income tax issue, regular Republicans in the Senate decided to make a political maneuver, capitalizing on the endorsement of a constitutional amendment made by President Taft. They proposed a constitutional amendment that would impose an income tax on the rich. The theory behind their plan was that when the States refused to ratify the amendment, the Republicans could use that failure as proof that the people, through their State legislatures, were against the idea of a new income tax. They could then use that argument to defeat the Bailey Bill, for how could Congress approve an income tax against the rich after the people, through their state legislatures, had spoken on the issue. Conservative Republicans were sure they did their homework. They were most certain that it could and would be defeated when it went to the states for ratification. They calculated that there were more than enough conservative states to defeat the 3/4 majority that were required under Article V to approve an amendment.
Senator Norris Brown (R-NE) was the first to propose an income-tax amendment to the Constitution, on June 17, 1909, but it was rejected. On June 28, Senator Aldrich submitted a proposal (Senate Joint Resolution 40). It authorized Congress to "lay and collect taxes on incomes, from whatever source derived, without apportionment among the several states and without regard to any census or enumeration." It passed the Senate by a vote of 77 to 0, with 15 members abstaining. On July 12, the proposal passed in the house, by a vote of 318 to 14. The resolution proposing the 16th Amendment therefore passed the 61st Congress and was submitted to the state legislatures.
Once the amendment was submitted, it was clear that it had more support than was anticipated. Rep. Sereno Payne, a conservative Republican, was so concerned and was so convinced that their plan would backfire that he took to the House floor, denounced the resolution that he himself introduced in the House, and made a last-ditch effort to appeal to Congress:
"As to the general policy of an income tax, I am utterly opposed to it. I believe with William Gladstone that it tends to make a nation of liars. I believe it is the most easily concealed of any tax that can be laid, the most difficult of enforcement, and the hardest to collect; that it is, in a word, a tax upon the income of honest men and an exemption, to a greater or lesser extent, of the income of rascals; and so I am opposed to any income tax in time of peace…I hope that if the Constitution is amended in this way the time will not come when the American people will ever want to enact an income tax except in time of war."
Not all states were initially in favor of an amendment. The gamble that the conservative Republicans were taking at first seemed to pay off. Many states realized that the imposition of a federal income tax would mean the rise of a federal revenue bureaucracy that extended from Washington, D.C., throughout the country and into the personal and business transactions of every American and every business. Private transactions would no longer be private; government would be able to monitor what everyone was doing.
Richard E. Byrd, speaker of the Virginia House of Delegates, voiced his concerns on March 3, 1910, during the debate on whether to ratify the 16th Amendment:
"It means that the state must give up a legitimate and long established source of revenue and yield it to the Federal government. It means that the state actually invited the Federal government to invade its territory, to oust its jurisdiction and to establish Federal dominion within the innermost citadel of reserved rights of the Commonwealth. This amendment will do what even the 14th and 15th Amendments did not do — it will extend the Federal power so as to reach the citizens in the ordinary business of life. A hand from Washington will be stretched out and placed upon every man's business; the eye of a Federal inspector will be in every man's counting house.
The law will of necessity have inquisitorial features, it will provide penalties. It will create a complicated machinery. Under it, businessmen will be hauled into courts distant from their homes. Heavy fines, imposed by distant and unfamiliar tribunals, will constantly menace the taxpayer. An army of Federal inspectors, spies and detectives will descend upon the state. They will compel men of business to show their books and disclose the secrets of their affairs. They will dictate forms of bookkeeping. They will require statements and affidavits. On the one hand the inspector can blackmail the taxpayer and on the other, he can profit by selling his secret to his competitor.
When the Federal government gets a strangle hold on the individual businessman, state lines will exist nowhere but on the maps. Its agents will everywhere supervise the commercial life of the states…. I am not willing by any voluntary act to give up revenue which the State of Virginia herself needs, nor to surrender that measure of state's rights which was, and the construction of the Federal courts have permitted to remain."
Much to everyone's surprise, the amendment was ratified by one state legislature after another, and on February 25, 1913, with the certification by Secretary of State Philander C. Knox (Woodrow Wilson had just taken office), the Sixteenth amendment took effect. "Soaking the Rich" was clearly a popular policy. "Shifting the growing burden of federal finance to the wealthy" make a lot of sense to those who, at the time, were sure they weren't in the income bracket that would be targeted. The end run of the Republican leadership did indeed backfire.
As James Madison had feared, the seeds of class warfare were sown in the strategy of different rates for different incomes.
Not only were conservative Republicans burned by their attempt to end Congress' scheming for a progressive income tax by in fact ensuring that such a tax would become the law of the land, but the Payne-Aldrich Tariff Act of 1909 was also passed and signed by President Taft on August 5, 1909. (The corporate tax was reduced to 1% by the time the bill was signed)
[As a side note, the bill hurt Taft greatly, and in fact, would have disastrous consequences for the Republican Party in general. Lowering the tariff caused a big split in the party by pitting producers (manufacturers and farmers) against merchants and consumers. Failure to address tax reform was another sore spot. The debate split the Republican Party into Progressives and Old Guards and led the split party to lose the 1910 congressional election. Two years later, with the 1912 presidential election, the tariff issue continued to split votes amongst Republicans in most states, resulting in Democratic candidate Woodrow Wilson being elected. That was the election where Teddy Roosevelt returned to politics to "save the Republican party from Taft" by running for president under the new political party he created, the Progressive Party – commonly called the "Bull Moose." He had entered the race too late and Taft has already secured the GOP nomination].
It turns out that Sixteenth Amendment was Congress' way to get around the Pollock decision (much the way the 14th Amendment got around the Dred Scott decision) and enact an income tax, progressive in nature, without having to worry about whether the tax is classified as "direct" or not and whether it needs to be apportioned among the states on the basis of population.
It should be noted that there is credible evidence to suggest that the 16th Amendment was not properly and legally ratified pursuant to the requirements set out in Article V of the US Constitution (the "Amendment Process"). See the Appendix for a summary of this evidence, as researched by Bill Benson.
How the Income Tax Grew –
On April 21, 1913, the House Committee on Ways and Means, chaired by Rep. Oscar W. Underwood (D-AL), took up consideration of a revenue bill, which included tariff reductions as well as an income tax. The Underwood bill (H.R. 3321) was heartily approved by the Democratic-controlled House but reached opposition in the Senate. While the bill was clearly a Democratic bill, it was the Democrats and regular Republicans that wanted the most modest progressive tax rates. It was the progressives, on the other hand, that wanted higher rates. For the conservative (regular) Republicans and the vast majority of Democrats, wealth redistribution of any significance was not among the sanctioned uses. When Robert La Follette, the progressive Republican from Wisconsin proposed a maximum individual income tax of 10% and an inheritance tax reaching 75%, John Sharp Williams (D-MS) protested that "the object of taxation is not to leave men with equal incomes after you have taxed them." Explaining that the Democrats had no such radical intentions for the power to impose an income tax, Williams declared:
"No honest man can wage war upon great fortunes, per se. The Democratic party never has done it, and when the Democratic party begins to do it, it will cease to be the Democratic party and become the Socialistic party of the United States; or better expressed, the Communistic Party of the United States."
Neither traditional Democrats nor regular Republicans were willing to use income taxation to redistribute wealth. Such a radical policy was repudiated by all but a handful of Progressives and Populists on the fringe. Senator Henry Cabot Lodge (R-MA) warned that "it will be an evil day for us when we enter on confiscation of property under the guise of taxation." The income tax of 1913 was intended to raise revenue to finance tariff reduction and not to level incomes or to destroy the wealthy as a class. According to those representatives who looked at the income tax objectively, they believed it was only fair that the wealthy pay the bulk of the income tax because they benefited most from the high tariffs. In other words, they felt it was only "equitable" that they should contribute their "fair share" of the cost of government via the federal income tax.
On October 3, the Underwood bill was signed into law by President Woodrow Wilson. It enacted the first income tax – a minor income tax – under the authority of the new constitutional amendment. After decades of political controversy and conflict, the federal government once again had an income tax. To be sure, this was a minor levy. Most federal revenue still came from the tariff and federal excise taxes (especially those on alcohol and tobacco products). Corporations were subject to a flat tax of 1%, with no exemption allowed and for individuals, a tax of 1% was imposed on income above $3,000 for single taxpayers (and above $4,000 for married couples). Those were very generous exemptions, as fewer than 4% of families had an annual income
of $3,000 in 1913. As a result, less than 1% of the population (or 2% of households) was subject to income taxation the first year of the new tax regime. With regard to the progressive aspect of the tax, there was a surtax of 1% imposed on income above $20,000 and 6% on incomes above $500,000. Thus, the maximum marginal rate reached 7% on income above $500,000. In 1913, there were very few taxpayers in that upper bracket. The tax provided for only a handful of exemptions, exclusions, and deductions, and the same tax rate applied to both earned and unearned income.
All that would change over the next 100 years. Even more dramatically, it would require only a few years for the federal income tax to become the chief source of income for the government, far outdistancing tariff revenues. The age of big government had officially begun.
The Underwood Act defined taxable income as:
"….. subject only to such exemptions and deductions as are hereinafter allowed, the net income of a taxable person shall include gains, profits, and income derived from salaries, wages, or compensation for personal service of whatever kind and in whatever form paid, or from professions, vocations, businesses, trade, commerce, or sales, or dealings in property, whether real or personal, growing out of the ownership or use of or interest in real or personal property, also from interest, rent, dividends, securities, or the transaction of any lawful business carried on for gain or profit, or gains or profits and income derived from any source whatever…"
And the Act then provided, in part:
An income tax of 1% on individual income over $3,000 (or $4,000 for married couples), up to incomes of $20,000.
A progressive surtax ranging from 1% to 6%, depending on income.
Returns for the new tax were to be kept secret
Exemptions for charitable organizations (using language from the 1894 and 1909 tariff bills with regard to charitable purpose – Under these statutes, tax exemption was granted to "any corporation or association organized and operated exclusively for religious, charitable, or educational purposes…" In other words, these organizations were to be considered "non-profits"; Under the 1913 bill, tax-exempt organizations could earn tax-free income from both mission-related activities and commercial business activities that were unrelated to the purpose for which they were exempt, as long as they used the net profits for exempt purposes. That would change with the Revenue Act of 1950)
Income taxes to be collected at the source, meaning that some kinds of income would be taxed before it reached the taxpayer, as with the modern system of tax withholding.
The Bureau of Internal Revenue established a Personal Income Tax Division to collect the new tax. (Recall that the IRS has its roots in the Lincoln administration. The position of Commissioner of Internal Revenue, within the Treasury Department, was created by the Revenue Act of 1862).
In general, it established the modern federal income tax system
When the Act was passed and sent out to the people, Congress predicted confidently that "all good citizen will willingly and cheerfully support and sustain this, the fairest and cheapest of all taxes." And indeed it was harmless at first. The first tax ranged from merely 1% on the first $20,000 of taxable income and was only 7% on incomes over $500,000. Who could complain? (How harmless was this tax? Famed author, Cleon Skousen, put it this way: "If the tax was expressed in 1994 dollars, this sentence (above) would read, 'the first tax ranged from merely 1% on the first $298,000 of taxable income and was only 7% on incomes above $7,460,000.'")
In the beginning, hardly anyone had to file a tax return because the tax did not apply to the vast majority of America's work-a-day citizens. As mentioned above, when the tax was first imposed, only 1% of the population was subject to a federal income tax. In 1939, twenty-six years after the Sixteenth Amendment was adopted, only 5% of the population, counting both taxpayers and their dependents, was required to file returns. In 1994, more than 80% of the population were required to file and pay. Today, it is 50% of the population.
Those who support this scheme of taxation are exactly what our Founders warned us about. Thomas Jefferson wrote: "To take from one, because it is thought his own industry and that of his father's has acquired too much, in order to spare to others, who, or whose fathers, have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, the guarantee to everyone the free exercise of his industry and the fruits acquired by it."
Today, it is still a popular idea to tax the wealthy so that the less fortunate can live easier and more comfortably with their more modest salaries and without having any income tax liability. For example, 82% of Democrats polled in 2011 supported raising taxes on millionaires (compared to 54% of Republicans). In 2008, 58% of Americans (mind you, 48-49% weren't required to pay income taxes) thought it was a good idea to raise taxes for the wealthy (by wealthy, they meant those who have an income in excess of $250,000) in order to pay for "new government programs and tax cuts for those making less money," as well as to help lower the nation's deficit.
As our Founders would frown upon that mindset if they were here today, they would surely comment: Those who don't respect the rights of others don't deserve it for themselves.
American economist Thomas Sowell has written quite a lot about this mindset of allowing the government to arbitrarily decide what is considered "poverty" and what is considered "wealth." When that happens, of course, classes of people are treated differently. Different sets of standards and rules apply, which is not what "Equal Protection of Laws" is all about. Even worse, Sowell writes, is allowing the people themselves to decide when others should be taxed. That is exactly what Founders like James Madison labored to avoid. He referred to a democracy as "mob rule." He, as well as the other Founders, understood that individual rights could never be secure in a pure democracy. A republic – a constitutional republic – would be the system of choice.
A republic is representative government ruled by law (specifically, the US Constitution). That's why we say that we are a nation of laws and not of men. A democracy, on the other hand, is government ruled by the will of the majority (mob rule; "mobocracy"). Benjamin Franklin defined it as: "A democracy is two wolves and a lamb voting on what to have for lunch. Liberty is a well-armed lamb contesting the vote!" And Thomas Jefferson defined: "A democracy is nothing more than mob rule, where fifty-one percent of the people may take away the rights of the other forty-nine."
A republic recognizes the unalienable rights of individuals (which no majority rule can violate) while democracies are only concerned with the wants or needs of a majority group. Social justice is easier to pursue when there is mob rule or when the rule of law disintegrates.
In a constitutional republic as ours, lawmaking is a slow, deliberate process, requiring approval (and surviving scrutiny) from all three branches of government, in order that cool heads prevail and the fairest laws are produced. In a democracy, laws are passed by majority polls or voter referendums. 50% plus 1 vote (ie, the majority) is enough to take away anything away from the 50% minus 1 vote (ie, the minority). For purposes of this article, a perfect example would be this: If 51% of the people don't pay taxes and want to keep up that lifestyle or even want more from those 49% that pay taxes, they can easily vote a tax increase. Income is no longer a protected property right in the United States, thanks to the Sixteenth Amendment, so in effect, taxation is subject to mob rule. And to the conscience of every elected official in Washington DC.
History records that democracies always self-destruct when the non-productive majority realizes that it can vote itself handouts from the productive minority by electing the candidate promising the most benefits from the public treasury. These candidates, in order to remain popular, must adopt ever-increasing tax and spend policies to satisfy the ever-increasing desires of the majority. As taxes increase, the incentive to produce decreases, causing many of the once productive to drop out and join the non-productive. When there are no longer enough producers to fund the legitimate functions of government and the socialist programs, the democracy inevitably collapses due to economic depression and chaos, and almost always, it is followed by some sort of dictatorship or socialist/communist regime. Prior to its decline (around 100-44 BC), Roman emperors couldn't meet the demands of its poor They taxed heavily to provide "bread and circuses" (free grain, gladiator games) to the poor and the disillusioned – those who no longer valued historic Roman civic virtues. This system of state bribery worked for awhile; it placated them so that they wouldn't riot and cause problems for the Emperor. "For the People who once upon a time took an interest in military command, high civil office, the legions, and the state of the republic, they now restrain themselves and anxiously hope for just two things: bread and circuses." But in the end, the policies disillusioned too many Romans and the empire simply wasn't worth fighting for any longer.
Back to Thomas Sowell and his views regarding the government's power to arbitrarily decide what is considered "poverty" and what is considered "wealth" for purposes of re-distribution… On that subject, he wrote:
"Leaders of the left in many countries have promoted policies that enable the poor to be more comfortable in their poverty. But that raises a fundamental question: Just who are 'the poor'? … 'Poverty' once had some concrete meaning — not enough food to eat or not enough clothing or shelter to protect you from the elements, for example. Today it means whatever the government bureaucrats, who set up the statistical criteria, choose to make it mean. … Most Americans with incomes below the official poverty level have air-conditioning, television, own a motor vehicle and, far from being hungry, are more likely than other Americans to be overweight. But an arbitrary definition of words and numbers gives them access to the taxpayers' money. This kind of 'poverty' can easily become a way of life, not only for today's 'poor,' but for their children and grandchildren. Even when they have the potential to become productive members of society, the loss of welfare state benefits if they try to do so is an implicit 'tax' on what they would earn that often exceeds the explicit tax on a millionaire. If increasing your income by $10,000 would cause you to lose $15,000 in government benefits, would you do it? In short, the political left's welfare state makes poverty more comfortable, while penalizing attempts to rise out of poverty."
"Soaking the Rich" or Re-distribution of Wealth? –
So, did the income tax actually "soak the rich" as the slogan described? The wealthy, especially the super-wealthy, had anticipated the adoption of a progressive federal income tax and had created a clever device to protect their riches. It was called a "charitable foundation." The idea was to co-sign the ownership of wealth, including stocks and securities, to a foundation and then get Congress and the state legislatures to declare all such charitable institutions exempt from taxes. By setting up boards which were under the control of these wealthy benefactors they could escape the tax and still maintain control over the disposition of their fabulous fortunes.
In fact, long before the federal income tax was in place, multimillionaires such as John D. Rockefeller, J.P. Morgan, and Andrew Carnegie had their foundations set up and operating. What they needed to do was make certain that the tax bill passed by Congress contained a provision specifically exempting their treasure houses from taxation. And sure enough, the Underwood bill included such a provision (Section 2, paragraph G). The bill borrowed language from the 1894 and the 1909 tariff bills, both of which provided exemptions for charitable organization. Under these statutes, tax exemption was granted to "any corporation or association organized and operated exclusively for religious, charitable, or educational purposes…" In other words, these organizations were to be considered "non-profits." Under the 1913 bill, charitable (non-profit) organizations could earn tax-free income from both mission-related activities and commercial business activities that were unrelated to the purpose for which they were exempt, as long as they used the net profits for exempt purposes. (That would change with the Revenue Act of 1950; In 1950, Congress established the "unrelated business income tax," or UBIT, which would be imposed on any activity that was not "regularly carried on" and "substantially related" to the organization's charitable purpose).
Section 2, paragraph G provides: "Provided, however, that nothing in this section shall apply…to any corporation or association organized and operated exclusively for religious, charitable, scientific or educational purposes." This magical provision locked up the riches of the super wealthy for all of their foundations were specifically designed to qualify under one or more of these categories.
Within a few years, President Woodrow Wilson would hijack the income tax to pay for WWI. He would tax the very wealth at 67% and then up to 77%. On April 2, 1917, he stood before a joint session of Congress, requesting a declaration of war. This, of course, led to an even greater need for additional revenue. The debate over taxing versus borrowing to finance the war raged over several months across the country. Taxes would have to be increased. But what taxes should be imposed, and by how much? Once again the question was raised as to whether to broaden the tax base or raise the rates on the wealthiest. The War Revenue Act of 1917 imposed a 2% tax on individual incomes over $1,000 (or $2,000 for married couples), featured graduated surtaxes reaching as high as 67% (63% on incomes over $1 million and 67% on incomes over $2 million), and increased a variety of excises and duties (including on automobiles). It also added an additional tax of 4% to the existing corporate income tax. Revenue grew exponentially. In the years prior to 1917, the Bureau of Internal Revenue (BIR) took in an average of about $281 million. In the years following the War Revenue Act of 1917, the average was $2.78 billion…. ten times the amount of tax revenue!
The Agency grew dramatically; it had to. The number of income tax returns that were filed after the Act of 1917 increased by over 1000%.
In his famous "Politics is Adjourned" address to a joint session of Congress on May 27, 1918, President Wilson made a strong pitch for more revenues. He urged: "Our financial program must sustain it to the utmost. Our financial program must no more be left in doubt or suffered to lag more than our ordnance program or our ship program, or our munitions program or our program for making millions of men ready." In defense of the new taxes requested on war profits, he said the American people were not just willing to send their men to possible death overseas, but "to bear any burden or undergo any sacrifice" to win the war including taxes. "We need not be afraid to tax them, if we lay taxes justly." If the American people know that the burden is being distributed equally, he went on, "they will carry it cheerfully and with a sort of solemn pride." Wilson made it sound almost as if Americans were actually seeking a tax increase in order to feel the joy of sacrificing their hard earned money for a righteous cause.
And so, the Revenue Act of 1918 (which actually passed in early 1919) increased taxes further. Corporations were given an exemption of $2,000, but rates were raised to 12% on net taxable income and the surcharge on the highest incomes was increased to 77%. The income tax now occupied a central place in the federal revenue system. In 1916, income taxes had been providing 16% of federal revenue, but from 1917 to 1920, that percentage ranged as high as 58%. The tax was now a pillar of federal finance. Still, however, it remained a narrow levy on the American people. In 1920, only 5.5 million returns showed any tax due.
By 1919, there was a clear and broad consensus that held that steep wartime tax rates were unsustainable. Even Wilson himself finally agreed, and in his State of the Union that year, he suggested the possibility of reducing taxes. A series of tax cuts (called Mellon tax cuts, for Andrew Mellon, the Treasury Secretary at the time) began in 1921, as legislators from both parties set about revising the wartime tax system. In the end, the tax cuts in the Revenue Act of 1921 were generally a disappointment for everyone and actually included a hike in the corporate tax rate.
Herbert Hoover and Franklin D. Roosevelt, using the excuses of depression and war, permanently enlarged the income tax. Under Hoover, the top rate was hiked from 24 to 63%. Under Roosevelt, the top rate was again raised – first to 79% and later to 90%. [If he had his way, in 1941, a 99.5% marginal tax rate of 99.5% would have been imposed on all incomes over $100,000. That was his proposal. After that proposal failed, Roosevelt issued an executive order to tax all income over $25,000 at the astonishing rate of 100%. Congress later repealed the order, but still allowed top incomes to be taxed at a marginal rate of 90%].
It was one thing to impose taxes but another to collect them. The collection process was greatly facilitated in 1943 by a device created by President Franklin D. Roosevelt to pay the costs of WWII. It was the tax withholding provision, also called "withholding from wages and salaries." In other words, income tax would be collected at the source – collected at the payroll window before it was paid to the taxpayer. Economists point out that this device, more than any other single factor, shifted the tax from its original design as a tax on the wealthy to a tax on the masses – mostly the middle class.
In 1946, Beardsley Ruml, then the chairman of the Federal Reserve Bank of New York, wrote an article in American Affairs in which he explained the real function of the income tax. The article was entitled "Taxes for Revenue Are Obsolete." Ruml theorized that with the Federal Reserve, an institution and mechanism were in place to provide the federal government with a constant and virtually unlimited flow of dollars. That, of course, is inflationary, so Ruml believed that income taxes served the purpose of dampening inflation by lowering demand, a measure achieved by reducing the purchasing power of the masses by taking money out of their paychecks.
That was but one purpose of taxation, according to Ruml. The other was the redistribution of wealth from one class of citizens to another. Though done under the banner of social justice and equality, the real purpose was to supplant the decisions of a free people in a free market with the rule of the masters of a planned economy. As Ruml put it in his own words:
"The second principal purpose of federal taxes is to attain more equality of wealth and of income than would result from economic forces working alone. The taxes which are effective for this purpose are the progressive individual income tax, the progressive estate tax, and the gift tax. What these taxes should be depends on public policy with respect to the distribution of wealth and of income. These taxes should be defended and attacked in terms of their effect on the character of American life, not as revenue measures."
T. Coleman Andrews, who served as Commissioner of the IRS for nearly 3 years during the early 1950s, made the following remarks after his resignation in 1955:
"Congress, in implementing the Sixteenth Amendment, went beyond merely enacting an income tax law and repealed Article IV of the Bill of Rights, by empowering the tax collector to do the very things from which that article says we were to be secure. It opened up our homes, our papers and our effects to the prying eyes of government agents and set the stage for searches of our books and vaults and for inquiries into our private affairs whenever the tax men might decide, even though there might not be any justification beyond mere cynical suspicion.
The income tax is bad because it has robbed you and me of the guarantee of privacy and the respect for our property that were given to us in Article IV of the Bill of Rights. This invasion is absolute and complete as far as the amount of tax that can be assessed is concerned. Please remember that under the Sixteenth Amendment, Congress can take 100% of our income anytime it wants to. As a matter of fact, right now it is imposing a tax as high as 91%. This is downright confiscation and cannot be defended on any other grounds.
The income tax is bad because it was conceived in class hatred, is an instrument of vengeance and plays right into the hands of the communists. It employs the vicious communist principle of taking from each according to his accumulation of the fruits of his labor and giving to others according to their needs, regardless of whether those needs are the result of indolence or lack of pride, self-respect, personal dignity or other attributes of men.
The income tax is fulfilling the Marxist prophecy that the surest way to destroy a capitalist society is by steeply graduated taxes on income and heavy levies upon the estates of people when they die.
[As matters now stand, if our children make the most of their capabilities and training, they will have to give most of it to the tax collector and so become slaves of the government. People cannot pull themselves up by the bootstraps anymore because the tax collector gets the boots and the straps as well.]
The income tax is bad because it is oppressive to all and discriminates particularly against those people who prove themselves most adept at keeping the wheels of business turning and creating maximum employment and a high standard of living for their fellow men.
I believe that a better way to raise revenue not only can be found but must be found because I am convinced that the present system is leading us right back to the very tyranny from which those, who established this land of freedom, risked their lives, their fortunes and their sacred honor to forever free themselves…"
Taxation today is clearly used as a scheme of wealth distribution. In his bid for the presidency in 2008 and again in 2012, Obama talked about increasing taxes on the wealthy. His favorite line was: "We can restore the American dream where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same set of rules." He was referring to some sort of "advantage" that those who work hard and earn more money have over those who don't have much. Even Joe Biden, in 2009, urged the wealthy to pay more in taxes, to "do their patriotic duty." And as we see, what President Obama wasn't willing to do outright (raise taxes on the wealthy) because of political backlash, he did deviously. Obamacare contains a whole host of new taxes, only a few of which apply to middle-class Americans.
Under what notion of fairness is it OK for people to be relieved in their economic "discomfort" by using the funds that taxpayers have to work 1/3 of the year for and then surrender to the government? Under what notion of fairness is it OK for people can be relieved in their decisions not to become educated, seek training, or look for work by simply living off the finances that taxpayers have to work 1/3 of the year for and then surrender to the government? Under what notion of fairness is it OK for people to have lots of children without adequate ability to provide for them while the funds to raise them come from taxpayers who take money from their own families (affecting their own decisions to have more children) and who have to work 1/3 of the year for and then surrender to the government? President Obama should not surrender the American Dream of one segment of society to serve the dreams of another segment.
Audits for Enemies –
FDR became the first president to practice on a large scale what James Madison called "the spirit of party and faction" and what Justice Stephen Field called the "war of the poor against the rich." With a steeply progressive income tax in place, Roosevelt used the federal treasury to reward, among others, farmers (who were paid not to plant crops), silver miners (who had the price of their product artificially inflated), and southerners in the vote-rich Tennessee Valley (with dams and cheap electricity). In the 1936 presidential election, Senator Hiram Johnson (D-CA), a Roosevelt supporter, watched in amazement as the President mobilized "the different agencies of government" to "dole out subsidies for votes." In other words, he was using government funding to ultimately serve his re-election. Johnson calculated: "He started out with probably 8 million votes bought. The other side will have to buy their votes one by one, and they cannot hope to match his money." In that campaign, Roosevelt defeated the Republican Alf Landon by an electoral vote of 523–8.
The flip side of rewarding supporters was investigating political opponents. It started with an investigation of Senator Huey Long of Louisiana, who had threatened to run for president against Roosevelt. Next came an audit of William Randolph Hearst, whose newspaper empire strongly opposed Roosevelt for president in 1936. Moses Annenberg, publisher of the Philadelphia Inquirer, criticized the New Deal and vehemently opposed Roosevelt's re-election campaign in 1936 and 'coincidently,' became a target of a full-scale audit the following year (which was followed by a prison term). But perhaps no one was harassed more aggressively than Andrew Mellon, a powerful Republican and former Treasury Secretary. Remember it was Andrew Mellon who fought so hard to reduce the federal income tax rate, both for individuals and corporations. The Roosevelt administration tasked the IRS and an army of tax inspectors and prosecutors to scrutinize Mellon's financial records, especially to find out whether deductions for his vast philanthropic activities amounted to tax evasion. Even after IRS agents found nothing irregular, the Justice Department pursued the investigation. Historians have found no documents explaining the Roosevelt administration's focus on Mellon, but a comment Roosevelt made about him in 1926 may offer a clue: Roosevelt dubbed him "the master mind among the malefactors of great wealth. A federal grand jury declined to indict Mellon for tax fraud in 1934. But the IRS was still pursuing claims against Mellon for at least $3 million in back taxes. Mellon's "tax trial" before the Board of Tax Appeals in Pittsburgh and Washington lasted 14 months. At a private meeting with Roosevelt during the trial in 1936, Mellon offered to build the National Gallery and endow it with his own collection. Roosevelt accepted the offer, but instructed federal prosecutors to make "no change whatsoever" in the government's position on the Mellon tax case (according to Mellon biographer David Cannadine). Mellon died the next year, and the suits, including any against his estate, died with him.
The president's own son, Elliott Roosevelt, conceded in 1975 that "my father may have been the originator of the concept of employing the IRS as a weapon of political retribution."
President John F. Kennedy – together with his brother, Robert Kennedy, the Attorney General – used the IRS to go after mobsters and similar types suspected of racketeering for possible tax evasion. But JFK soon expanded the scope of IRS investigation to include political enemies as well. In November 1961, President Kennedy turned to the IRS to challenge the tax-exempt status of "right-wing extremist groups," as well as fundamentalist Christian ministers who had been openly opposed him for president because of his religion – a Roman Catholic. In a move not made public at the time, the Kennedy administration established an "Ideological Organizations Audit project" within the IRS, which targeted conservative groups, such as the John Birch Society. In November, the IRS launched audits of 22 "extremist organizations," several of which lost their tax-exempt status, jeopardizing their fundraising.
President Richard Nixon used the IRS as his own special gestapo agency. In effect, he re-directed Kennedy's "Audit Project" to target left-wing groups. After he took office, his administration quickly created a Special Services Staff to mastermind what a memo called "all IRS activities involving ideological, militant, subversive, radical, and similar type organizations." More than 10,000 individuals and groups were targeted for tax audits because of their political activism or slant between 1969 and 1973, including Nobel Laureate Linus Pauling (a left-wing critic of the Vietnam War) and the far-right John Birch Society. Nixon went after quite a wide range of political "enemy" groups, including anti-war groups (and the churches and other nonprofits that sheltered them), civil rights groups, reporters, and prominent Democrats.
Additionally, the IRS was also given Nixon's enemies list to, in the words of White House counsel John Dean, "use the available federal machinery to screw our political enemies." Luckily, as a result of Watergate investigation (1973-4) and, especially, the disclosure of White House tapes, many of these unethical, unauthorized activities became public. The tapes provided a direct line of accountability from the IRS to the Oval Office that was often missing in previous administrations. They provide unambiguous evidence that Nixon used his power to direct aides to use the IRS to get back at political enemies. In a taped conversation on Sept. 8, 1971, Nixon told his chief domestic policy adviser, John Ehrlichman, to direct the IRS to audit potential Democratic rivals, including Sens. Hubert Humphrey of Minnesota, Edward Kennedy of Massachusetts, and Edmund Muskie of Maine. "Are we going after their tax returns? I … you know what I mean? There's a lot of gold in them thar hills," Nixon said.
Article 2 of the Articles of Impeachment brought against President Nixon in 1974 charged him with "acting personally and through his subordinates and agents, to endeavor to obtain from the Internal Revenue Service, in violation of the constitutional rights of citizens, confidential information contained in income tax returns for purposes not authorized by law, and to cause, in violation of the constitutional rights of citizens, income tax audits or other income tax investigation to be initiated or conducted in a discriminatory manner."
Bill Clinton liked to deny that he would ever use the IRS to target political and personal enemies. Yet the audits speak for themselves.. The list of women, and other persons who faced tax audits – some immediately after going public with their accusations of sexual harassment or rape (Paula Jones and Juanita Broaddrick), who alleged sexual affairs (Gennifer Flowers and Liz Ward Gracen), or who agreed to offer testimony in such cases (such as Linda Tripp), as well as persons involved with the Whitewater scandal – suggests a pattern of political retaliation. Even Bill O'Reilly was audited three times by the Clinton administration and the watchdog group, Judicial Watch, was audited as well. It was no wonder the IRS targeted Judicial Watch. The organization alone filed more than 50 lawsuits against the Clinton administration for improper targeting of individuals by the IRS, in violation of privacy rights and IRS policy. In a meeting with Judicial Watch officials in January 12, 1999 to discuss the audits, an IRS agent boldly stated: "What do you expect when you sue the President?"
Under Clinton, the IRS was notoriously used as a tool to harass and intimidate. As was done by the administrations before him, the IRS was tasked with auditing a wide range of organizations that were viewed as hostile to the White House agenda. These included leading conservative publications, think tanks, and interest groups, among them The American Spectator, the National Review, the Heritage Foundation, the National Rifle Association, the National Center for Public Policy Research, the American Policy Center, American Cause, Citizens for Honest Government, Citizens Against Government Waste, Progress and Freedom Foundation, Landmark Legal Foundation, and Concerned Women for America.
IRS official Paul Breslan knew exactly what the organization was doing. And a memo was used to tie Clinton himself to the audits. In the memo, White House Associate Counsel William Kennedy is documented as saying that the IRS is "on top of it." In a speech on the House floor in 1996, Rep. John Mica (R-FL) said: "The fact is, the White House in this case misused the IRS and the FBI in an incredible abuse of power." During the Clinton years, conservatives used to joke back that if Clinton didn't have the IRS audit you, then you weren't a real conservative.
And now we see that the Obama administration has used the IRS to single out and target Tea Party, patriot groups, and other conservative organizations in their applications for tax-exempt status. According to a House probe, for the past 18 months (although it is likely the abuse has gone back as far as 2010), the IRS used "inappropriate criteria" – that is, focusing on groups with conservative-sounding words or phrases in their name, such as "Tea Party," or "patriot – for scrutiny in their tax-exemption applications. As if that wasn't bad enough, IRS agents also misappropriated the information contained in the confidential tax returns of conservative organizations and donors to GOP candidates (such as Mitt Romney) and leaked it to political enemies, in violation of federal law.
Conclusion –
Glenn Beck summarized the Tax Code and the IRS rather well a few years ago: "The tax code is not meant to be read and understood by the people. It's meant as a shelter for those who've taken power from us, and a weapon of selective enforcement to be used against any who would dare to raise an opposing voice. The law is not for them; it's for you." I guess what we are seeing right now is this explanation being exposed for the truth that it offers. Beck continued: "Right now, at least a hundred thousand federal employees together owe a billion dollars in back taxes, and the Treasury Secretary, Timothy Geithner, himself is one of them. There is no reason why the person who runs the IRS, the congressmen who writes our tax code, including repeat tax cheat Charlie Rengal, or the CEO who has friends in the White House, should get a free pass when you and I must pay taxes and pay the consequences of our decisions not to do so."
John Adams once said: "We are a government of laws, not men." Somewhere along the way, we've lost this fundamental truth.
Also, somewhere along the way, the government has gotten off track in its goal of enlarging its powers and responsibilities. Of course, government couldn't grow without the financial resources to do so. First it created the Federal Reserve to print the money and provide the loans it needed and then came the unlimited ability to tax citizens. There is a fine line between taxation and plunder. What isn't such a fine line is that which is constitutional and what is unconstitutional. The Founders wrote our Constitution for the common man to understand. The average citizen was meant to read the Constitution and easily understand the bounds of government and its extent in his life. Again, transparency and simplicity are what is expected in a free society. Our Founders never expected the Constitution to be interpreted according to the whims and views of nine justices who too often have rejected the principles on which the nation was founded and have lost the ability "to see the forest for the trees" (meaning, they've lost the ability to see the most relevant points because they're too busy focusing on smaller issues that take their eye off the big picture). The pressure of necessity (the need for government to take control of matters) has often clouded their view of what government was instituted for.
Our government is bloated because it is funding too projects not authorized by the Constitution. In addition to its constitutional responsibilities, Congress is taxing for unconstitutional purposes as well. State grants (to coerce financially what it can't require constitutionally) is an example. And this brings us to the current state of taxation, which amounts to plunder – legal plunder.
Frederic Bestiat (1801-1850), the French economist who championed private property, free markets, and limited government, defined legal plunder: "Legal plunder can be committed in an infinite number of ways. We have an infinite number of plans for organizing it: tariffs, protection, benefits, subsidies, encouragements, progressive taxation, public schools, guaranteed jobs, guaranteed profits, minimum wages, a right to relief, a right to the tools of labor, free credit, and so on, and so on. All these plans as a whole – with their common aim of legal plunder – constitute socialism."
We know our federal government was able to sell its plan of progressive income taxation – its plan of legal plunder – on its promise to "soak the wealthy." After all, who doesn't look at the very wealthy and conclude that they have more than enough and that they won't miss millions of their dollars. The current administration continues to sell this plan as a "patriotic duty" and a "fairness" thing. Bestiat explained why legalized plunder is such an attractive plan by explaining the human nature behind its mentality: "Now since man is naturally inclined to avoid pain – and since labor is pain in itself – it follows that men will resort to plunder whenever plunder is easier than work. History shows this quite clearly. And under these conditions, neither religion nor morality can stop it…. It is impossible to introduce into society a greater change and a greater evil than this: the conversion of the law into an instrument of plunder."
Socialism recognizes that there are some people who, by their human nature and ability to develop their gifts, will be producers and there are those who will reject the opportunities to invest in themselves and resist the need to become producers. And so, for the common good comes the policy that states: "From each according to his ability, to each according to his need." (the slogan popularized by Karl Marx in his 1875 Critique of the Gotha Program). In other words, only in the situation where the government organizes and arranges for the abundance of goods and services will there be enough to satisfy everyone's needs. That's the Marxist view. But this is the United States. We don't think like that. That's not in the lifeblood that courses through our veins. We are not Russia or Germany or any other nation that looks at people only in the collective sense. People are individuals first, with individual God-given rights to be individuals.
Bestiat warned those who value freedom to be ever vigilante for legislation that "takes from some persons what belongs to them and gives it to other persons to whom it does not belong… That benefits one citizen at the expense of another by giving to that person what he has the ability to provide for himself." He explains how essential it is that such legislation be rooted out. "The tool of socialists is legal plunder. To prevent this, you must exclude socialism from entering into the making of laws. You must prevent socialists from entering the Legislative Palace. If you do not succeed, legal plunder will continue to be the main business of the legislature…. Socialism is the state whereby everyone tries to live at the expense of everyone else. When plunder becomes a way of life for a group of men living together in society, they create for themselves in the course of time a legal system that authorizes it and a moral code that glorifies it."
That's why the time has come for the legalized plunder to stop and for the innovative, liberty-minded people of the United States to come up with a viable solution for government revenue that doesn't imperil individual freedom and prosperity. The Fair Tax – a national consumption tax – is one such plan.
As it is so true about history, the past holds the answers to the future. That's why we have the saying: "Those who fail to learn from history are doomed to repeat it." Frederic Bestiat (1801-1850), who, like our Founders, saw the wisdom and inherent freedom in a government that was: (i) designed primarily to protect the lives, liberty, and private property of citizens from theft or aggression and the designs of evil-intentioned individuals (and from government itself) and (ii) sufficiently limited in its ability to coerce the People in their exercise of freedom as well as in their economic pursuits, wrote that men will naturally rebel against an injustice when they find that they have sufficiently become its victims. It is also human nature, he explained. This was the case of the Boston Tea Party, various other displays of civil disobedience, and eventually, the American Revolution itself. (He also suggested a second course – instead of a rebellion against the plunder, men will capitulate on a large scale, refuse to work, invent, educate, etc and demand government provide for everyone).
Bestiat wrote that burdensome government restrictions, legalized plunder, indentured servitude, and slavery find defenders only among those who profit from them. Unfortunately, as almost 100 years of American history has shown, defenders will also be found among those who suffer from them. The question is whether the time has come for another simple act of civil disobedience — the petition and protest of honest, hard-working Americans against our current unfair system of taxation.
"In our time, many seem to think 'the Declaration' was penned to proclaim eternal verities about the human condition — a poetic tribute to 'life, liberty and the pursuit of happiness' — as if it were a collection of fine words about high-minded ideals. No! It was a rebellion against bad governance, against political arrogance, against oppressive laws, against restriction, constraint, and imposition without representation." (Scott Ott, of PJ Media) We call it 'The Declaration,' as if it merely declares our moral purpose. But that's not the object. Its purpose is to provide the blueprint for true and everlasting human liberty… for true 'Independence.' "The members of the Second Continental Congress did not expect to forfeit their lives, fortunes, and sacred honor for stating the obvious about the 'laws of nature and of nature's God.' Their necks ripened for the noose because they altered, abolished, and threw off the yoke of their government." (Ott) They desired to be absolved of any allegiance to a government that did not respect their rights. They counted all as loss to obtain freedom; to be absolved of allegiance to their government, to dissolve all political connections between themselves and the state which they had always referred to as their own.
The Declaration of Independence offers a daily reminder of the exhaustive reasons for holding government accountable and rejecting it when it becomes corrupt, abusive, and oppressive… to preserve Liberty.
The Declaration would clearly instruct us to move (peacefully) to abolish the federal income tax and to do away with the IRS.
RESOLUTION TO ABOLISH THE INCOME TAX and THE IRS
T. Coleman Andrews served as commissioner of IRS for nearly 3 years during the early 1950s. Following his resignation, he made the following statement:
The income tax is bad because it has robbed you and me of the guarantee of privacy and the respect for our property that were given to us in Article IV of the Bill of Rights. This invasion is absolute and complete as far as the amount of tax that can be assessed is concerned. Please remember that under the Sixteenth Amendment, Congress can take 100% of our income anytime it wants to. As a matter of fact, right now it is imposing a tax as high as 91%. This is downright confiscation and cannot be defended on any other grounds
The income tax is bad because it was conceived in class hatred, is an instrument of vengeance and plays right into the hands of the communists. It employs the vicious communist principle of taking from each according to his accumulation of the fruits of his labor and giving to others according to their needs, regardless of whether those needs are the result of indolence or lack of pride, self-respect, personal dignity or other attributes of men
The progressive income tax was imposed on the American people in 1913 following the ratification of the Sixteenth Amendment, which states: "The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration." It was never intended to be a primary source of funding for government. It was merely intended to make up for revenue losses from tariffs, which were the primary source of funding for the constitutional.
Whereas, the current U.S. tax system is huge convoluted mess. The Internal Revenue Service (IRS) has six federal income tax brackets ranging from 10% to 35%, depending on "income." This progressive tax system punishes the most productive members of society with a higher tax rate yet turns around and gives a tax credit to lower income earners that often amounts to a tax refund larger than the amount of tax paid in through withholding. The current tax system is riddled with loopholes and biases that hurt individuals who save money for the future. Not only does our tax code treat citizens differently but it is so hopelessly complicated that it frightens most taxpayers. It is far too complex, intrusive, and long; and
Whereas, once government undertakes to tax income, it acquires even more power through its authority to define "income," "taxable income," subsidiary terms, and the rules of exemption. The potential for abuse, capriciousness (arbitrary treatment), harassment, and corruption is great; and
Whereas, there is credible evidence to show that there were significant ratification discrepancies which call into question the legality of the Sixteenth Amendment; the evidence supports the conclusion that the Sixteenth Amendment was not properly and legally ratified by 3/4 of the states of the Union in 1913, as per Article V of the US Constitution; and
Whereas, the progressive income tax has become an instrument of government plunder of American income and property, in total disregard of our founding principle which states that property is as essential to a free man as his Life and Liberty. Rather, a heavy progressive income tax (as we have) is the second plank of the Communist Manifesto, written by Karl Marx and Friedrich Engels in 1948; and
Whereas, the current tax code is 73,954 pages of legalese (over 3 million words; taller than a giraffe and weighs 145 pounds), which the ordinary person living in the United States has no time to read or is capable of understanding, and it continues to grow and become more convoluted. (To emphasize this point, consider this: the average person can read 250 words per minute. Assuming the average reader took no breaks, it would take 15,200 minutes, 253 hours, or 10.5 days (without a single break) to read the tax code. Ayn Rand's famous book Atlas Shrugged has 645,000 words. The tax code has 5.9 times that amount); and
Whereas, the progressive income tax scheme (the Tax Code) imposes a heavy burden on all American taxpayers, with respect to both money and time. Saving and collecting records and receipts is time-consuming, a hassle, and a big headache. According to the IRS, the average taxpayer spends 26.5 hours preparing and sending in their taxes. Just complying with our voluminous and complicated federal tax system costs Americans about $431 billion a year, according to economist Arthur Laffer (although other estimates go as high as $600 billion). American taxpaying families often have to hire a CPA. Furthermore, another $1000 to $2000 in embedded costs are passed on to the average consumer each year by businesses who have to add the cost of tax compliance to their "cost of doing business" and therefore to the cost of their products and services (for every dollar sent to the IRS, it costs 30 cents in compliance); and
Whereas, the progressive income tax allows the federal government to pry into the private records, private accounts, private business, and personal affairs of individual citizens in order to find out what income and property it considers to be "taxable income"; and
Whereas, with the IRS able to look at the financial records of Americans, it gives the government power to make decisions as to when certain citizens "have enough already," and then wage war on their "excess"; an
Whereas, the average working American, poor, rich, or in-between, hates, and fears the IRS for good reason. It is able to seize one's bank account or house without a court order, able to shut down one's business overnight, and subject one to fines for failure to report income correctly, even when it is done innocently. In the eyes of the average American taxpayer, the tax code is unfair, overly complex, arbitrary in its requirements and exemptions, horribly politicized, harmful to individuals and the economy, helpful to the forces of Big Government, and impossible to understand without a CPA; and
Whereas, the harmful effects of the income tax are obvious. First and foremost, it has enabled government to expand far beyond its proper constitutional limits, regulating virtually every aspect of our lives. It has given government a claim on our lives and work, has created class warfare (taxpayers v. non-taxpayers), and it has destroying our privacy in the process. It takes billions of dollars out of the legitimate private economy, with most Americans giving more than a third of everything they make to the federal government. This economic drain destroys jobs and penalizes productive behavior. It has created class warfare (taxpayers v. non-taxpayers; producers v. non-producers; contributors v. takers) and in many cases, it has destroyed the incentive to work, to become more successful, and to accumulate wealth and property. The ridiculous complexity of the tax laws makes compliance a nightmare for both individuals and businesses. All things considered, our Founders would be dismayed by the income tax mess and the tragic loss of liberty which has resulted; and
Whereas, the progressive income tax is inherently corruptible and subject to arbitrary rules and application. The tendency is for government to create exemptions in return for political favors or to coerce a political agenda. The language providing guidelines for such exemptions is invariably vague, which means the IRS has room to "interpret" and decide who qualifies and who doesn't qualify for a particular exemption. The line between vigilance and harassment is not bright and the potential for abuse is great. This power, which is inherently arbitrary, ill suits a society that sees itself as free. Furthermore, where possible, people will naturally strive for tax exemption and will push the boundaries of tax guidelines. Such a tax scheme, therefore, encourages dishonesty and corruption; and
Whereas, the progressive income tax relieves some people from a shared responsibility to contribute to a government that serves them. Philosophically, no person or business should be exempt from a general taxation scheme. The current tax code imposes a tax burden on approximately half the US population while half are excused or exempted. The common government protects everyone equally (except under the taxation scheme) yet serves some more extensively than others. The tax code is progressive in tax burden but not progressive in services/benefits enjoyed. The current tax scheme – the progressive income tax created by the 16th Amendment – should be replaced by a Fair Tax (a national sales tax of about 23%) so that every American does his patriotic duty, has skin in the game, and has an interest in fiscal responsibility by their government. At the very least, the progressive income tax should be replaced by a low, flat-rate income tax (Flat Tax), 10% or lower, to be applied to all wage earners; and
Whereas, the federal income tax has become a wealth distribution scheme. Taxes that are soaked from the middle and upper classes are used to fund social programs that they are not entitled to and which go towards relieving a huge segment of society of their lower economic status. The object of federal taxation was not to leave men with equal incomes after they've been taxed"; and
Whereas, the IRS puts the government tax collector in a position of extraordinary power over fellow citizens (the "gorilla" role); he has the power to intimidate citizens who are unlucky enough to be audited by making them feel that they somehow "cheated" the government (rather than the most likely scenario – that they are merely "victims" of an unfair system); and
Whereas, the IRS often finds it difficult to avoid the attitude that each taxpayer is a cheat, even a criminal, who must somehow be cornered and caught. This has brought the nature of the entire income tax collection process into question; and
Whereas, thousands of complaints have poured into the IRS concerning the tactics used by some of its agents. Citizens feel they are treated as criminals rather than suspects who are innocent until proven guilty; and
Whereas, the IRS has been guilty of many transgressions and has cost the American taxpayers billions of dollars. For example, one of the things the IRS is well known for is giving incarcerated criminals who prepare fraudulent returns tens of millions of dollars in refunds they're not entitled to. The figure actually increases annually, which means the IRS continues to do so. According to a federal audit, the latest count is that the IRS has doled out more than $35 million to criminals. A few years ago the IRS came under fire for allowing 1 million foreigners, many in the U.S. illegally, to improperly claim close to $9 billion in tax credits even though they did not provide valid Social Security numbers on their return. Not long after that, the tax agency got in trouble for handing out $33 million in bogus electric car credits. As recently as April 2013, two dozen IRS employees were charged with stealing hundreds of thousands of dollars in government benefits, including food stamps, welfare and housing vouchers. The scheme fleeced U.S. taxpayers out of at least a quarter of a million dollars, according to federal prosecutors; and
Whereas, the IRS chills the First Amendment rights of churches and nonprofit organizations which now hesitate to use them for fear of losing tax-exempt status; and
Whereas, the most damaging aspect of the Sixteenth Amendment is the fact that it violates the unalienable rights provided in the 4th Amendment. This is the amendment which protects privacy–privacy of the home, business, personal papers and personal affairs of the private citizen. None of these are disturbed by a poll (head or capitation) tax because it is so much per person regardless of the circumstances, but when the tax is based on income, the IRS is assigned the most unpleasant task of making certain that everyone pays his fair share. This task is physically impossible without prying into the private papers, private business and personal affairs of the individual citizens. By any standard, it is a miserable assignment. Furthermore, it is impossible to run audits and surveys of all taxpayers and so the audits seldom check more than 2% of them; and
Whereas, the Internal Revenue Service (IRS) is the closest thing to the Gestapo that the United States has ever had; administrations have used its awesome power to audit tax returns as an effective means to silence and intimidate political opponents; and
Whereas, the IRS has gotten out of control:
– The IRS has admitted to intentionally and deliberately targeting conservative groups (especially those containing the terms "Tea Party" or "patriot" in their names) since at least 2011. In some cases, conservative individuals have been targeted. The targeting was done with malicious intent;
– The IRS has admitted that it has deliberately harassed said conservative political organizations claiming tax exempt status by singling them out for additional scrutiny and investigation;
– Lois Lerner, who heads the IRS division that oversees tax exempt groups, has admitted that at least 75 organizations were singled out because they included the words "Tea Party" or "patriot" in their applications for tax exempt status. She acknowledged that actions were clearly violations of IRS policies;
– The IRS' inappropriate and intimidating investigation tactics included probing questions about organizations' board members, officers, employees, and their families. There were also demands for extraordinary detail on employee training, vending, and advertising. Among other IRS demands, they required lists of "all issues important to your organization" with requests to "indicate your position regarding each issue";
– The IRS intentionally and maliciously leaked confidential taxpayer information of said conservative groups to Leftist allies;
– The IRS has admitted that it engaged in political profiling while processing applications for tax-exempt status. It searched tax applications for words like "Tea Party" and even "patriot." Once it found those groups, it made intrusive and unconstitutional inquiries, demanding answers "upon penalty of perjury." [In this case it was against organizations with "tea-party" or "patriot " in their names and other right-wing groups. Next time it could be libertarian or left-wing antiwar and pro-civil-liberties groups. No dissenter can ever rest assured he is safe from the arbitrary power of the IRS];
– The IRS targeted conservative groups in swing states before the 2012 election. The chilling effect on such organizations because of said targeting together with alleged instances of voter fraud (showing higher than expected voter turn-out for Democrats) in the same areas calls into question the results of the election;
– This ongoing IRS abuse continues today, as the ACLJ represents dozens of these targeted groups;
– IRS officials threw lavish parties for themselves, spending millions of dollars even as Americans struggled to keep their jobs and pay their taxes;
– Pro-life and Christian groups report extreme and intrusive demands, including one reported demand that a pro-life group promise not to picket Planned Parenthood. The intent was to chill and even shut down their First Amendment rights of free speech expression and of conscience;
– The IRS conducted mass-scale audits of adoptive families, auditing 100,000 in 2011 alone – simply because they adopted a child.
In consideration of all of the above, the ________________________ (group name) concludes that –
Taxation, other than sales tax (which is tied to contract law and includes an element of consent), is nothing less than confiscation under threat of force of the property and/or income of individuals. Progressive taxation is government plunder of the wealthy, offensive to our notions of equal treatment and equal protection under the law; and
The progressive income tax is the targeted confiscation of the fruits earned by creative, industrious, and productive individuals; it punishes success, productivity, creativity, ingenuity, hard work, investment, and risk-taking and is inconsistent with a nation committed to the freedom to "pursue happiness; and
The progressive income tax has no place in a free society. It amounts to the plunder of property and the frustrates the Pursuit of Happiness;
Elimination of an income tax will do more than anything else to return political and government power from Washington DC back to the People; and
The IRS targeting of political opponents represents some of the most shameful abuses of government power in 20th century American history. A government organization like the IRS discriminating against political organizations is an outrageous abuse of power, and the American people have every right to demand answers and accountability; and
As recent testimony has made clear, the IRS is institutionally incapable of governing itself (let alone that it has no constitutional authority) and departments such as the legislative and executive branches are incapable of managing it, providing oversight, or providing transparency to the American people in its regard; and
The Internal Revenue Service cannot be used as a weapon against political enemies. There must be a thorough investigation of IRS abuse (as well as abuse at the hands of other government agencies), and those responsible must be punished. There is no excuse for turning the full power of the IRS – and the federal government in general – on American citizens; and
Use of the IRS as a harassment, intimidation, and bullying arm of the President's administration has set a dangerous precedent (we've also seen it use Homeland Security for the same purpose); and
The IRS has successfully chilled the fundamental rights that Americans are entitled to under the US Constitution (and specifically, the Bill of Rights); and
When government goes after political opponents, that is the very definition of tyranny; and
Americans have a rightful expectation to have trust in their government. Trust in government is a hallmark of a free society. The current IRS scandal has destroyed that trust; and
Because trust in government has been destroyed and because it appears that the IRS has become a Gestapo agency, the American people cannot be expected to allow it to be the enforcement arm of Obamacare – the healthcare program the government has forced them to comply with; and
Therefore, be it –
Resolved, that the American people can no longer trust the IRS to enforce Obamacare, apply tax laws fairly, evenly, and without bias, and to be respectful of the information shared in healthcare records, tax records, and even private, personal information to be mined through Common Core; and
Resolved, that the progressive federal income tax has become arbitrary, unfair, overly convoluted, and an exercise of government plunder, and the IRS has become an agency used by government for the improper scrutiny of American citizens; and
Resolved, that the ________________________ (group name) believes the time has come to reform the tax code and by extension, abolish the Internal Revenue Service.
The US Constitution
The Fair Tax – http://www.fairtax.org
Congressional Record-House, July 12, 1909, p.4404
Congressional Record-House, July 12, 1909, p.439
Pollock v. Farmers Loan & Trust Company, 157 U.S. 429 (1895)
Federalist No. 10. http://www.constitution.org/fed/federa10.htm
"The Income Tax Arrives," Tax History. http://www.taxhistory.org/www/website.nsf/Web/THM1901
"How Some States Did Not Legally Ratify the Sixteenth Amendment" –http://www.givemeliberty.org/features/taxes/notratified.htm
Jack Kenny and John Larabell, "100 Years Ago: Instituting the Income Tax," The New American, February 4, 2013. Referenced at: http://www.thenewamerican.com/culture/history/item/14410-100-years-ago-instituting-the-income-tax
Sheldon D. Pollack, "Origins of the Modern Income Tax," Tax Lawyer Winter, Vol. 66, No. 2, Winter 2013. (Very detailed history of the Modern Income Tax). Referenced at: https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=3&ved=0CFsQFjAC&url=http%3A%2F%2Fwww.buec.udel.edu%2Fpollacks%2FDownloaded%2520SDP%2520articles%2C%2520etc%2Facademic%2520articles%2FOrigins%2520of%2520the%2520Modern%2520Income%2520Tax%2520in%2520Tax%2520Lawyer%2520Winter%25202013.pdf&ei=-67IUZLPM9On4AOuoYDAAg&usg=AFQjCNELWbU-x8YvwgSiReYZAXs18HA36A&sig2=znteVrEa3AsercrlR6YVCA
W. Cleon Skousen, "History of the 16th Amendment," Latter Day Conservative. Referenced at: http://www.latterdayconservative.com/articles/history-of-the-16th-amendment/
Burton Fulsom, "The Progressive Income Tax in US History," The Freeman, May 1, 2003. Referenced at: http://www.fee.org/the_freeman/detail/the-progressive-income-tax-in-us-history
"History of Federal Individual Income Bottom and Top Bracket Rates," National Taxpayers Union. Referenced at: http://www.ntu.org/tax-basics/history-of-federal-individual-1.html
Diane Schrader, "The Top 7 Reasons (and One Promising Way) to Abolish the IRS For Good," News Real Blog, February 2, 2011. Referenced at: http://www.newsrealblog.com/2011/02/02/the-top-7-reasons-and-one-promising-way-to-abolish-the-irs-for-good-1/
Frederic Bestiat (1801-1850) – http://mises.org/page/1447/Biography-of-Frederic-Bastiat-18011850
"Policy Basics: Where Do Our Federal Tax Dollars Go?," Center on Budget and Policy Priorities, March 12, 2013. Referenced at: http://www.cbpp.org/cms/?fa=view&id=1258
Gail Russell Chaddock, "Playing the IRS Card: Six Presidents Who Used the IRS to Bash Political Foes,"The Christian Science Monitor, May 17, 2013. Referenced at: http://www.csmonitor.com/USA/DC-Decoder/2013/0517/Playing-the-IRS-card-Six-presidents-who-used-the-IRS-to-bash-political-foes/President-John-Kennedy-D
"IRS Conservative Witch Hunt is Just Latest of Many Offenses," Judicial Watch, May 17, 2013. Referenced at: http://www.judicialwatch.org/blog/2013/05/irs-conservative-witch-hunt-just-latest-of-many-offenses/
APPENDIX:
I. HOW SOME STATES DID NOT LEGALLY RATIFY THE 16TH AMENDMENT
http://www.givemeliberty.org/features/taxes/notratified.htm
Bill Benson's findings, published in "The Law That Never Was," make a convincing case that the 16th amendment was not legally ratified and that Secretary of State Philander Knox was not merely in error, but committed fraud when he declared it ratified in February 1913. What follows is a summary of some of the major findings for many of the states, showing that their ratifications were not legal and should not have been counted.
The 16th amendment had been sent out in 1909 to the state governors for ratification by the state legislatures after having been passed by Congress. There were 48 states at that time, and three-fourths, or 36, of them were required to give their approval in order for it to be ratified. The process took almost the whole term of the Taft administration, from 1909 to 1913.
Secretary Knox had received responses from 42 states when he declared the 16th amendment ratified on February 25, 1913, just a few days before leaving office to make way for the administration of Woodrow Wilson. Knox acknowledged that four of those states (Utah, Conn, R.I. and N.H.) had rejected it, and he counted 38 states as having approved it. We will now examine some of the key evidence Bill Benson found regarding the approval of the amendment in many of those states.
In Kentucky, the legislature acted on the amendment without even having received it from the governor (the governor of each state was to transmit the proposed amendment to the state legislature). The version of the amendment that the Kentucky legislature made up and acted upon omitted the words "on income" from the text, so they weren't even voting on an income tax! When they straightened that out (with the help of the governor), the Kentucky senate rejected the amendment. Yet Philander Knox counted Kentucky as approving it!
In Oklahoma, the legislature changed the wording of the amendment so that its meaning was virtually the opposite of what was intended by Congress, and this was the version they sent back to Knox. Yet Knox counted Oklahoma as approving it, despite a memo from his chief legal counsel, Reuben Clark, that states were not allowed to change it in any way.
Attorneys who have studied the subject have agreed that Kentucky and Oklahoma should not have been counted as approvals by Philander Knox, and, moreover, if any state could be shown to have violated its own state constitution or laws in its approval process, then that state's approval would have to be thrown out. That gets us past the "presumptive conclusion" argument, which says that the actions of an executive official cannot be judged by a court, and admits that Knox could be wrong.
If we subtract Kentucky and Oklahoma from the 38 approvals above, the count of valid approvals falls to 36, the exact number needed for ratification. If any more states can be shown to have had invalid approvals, the 16th amendment must be regarded as null and void.
The state constitution of Tennessee prohibited the state legislature from acting on any proposed amendment to the U.S. Constitution sent by Congress until after the next election of state legislators. The intent, of course, is to give the proposed amendment a chance to become an issue in the state legislative elections so that the people can have a voice in determining the outcome. It also provides a cooling off period to reduce the tendency to approve an idea just because it happens to be the moment's trend. You've probably already guessed that the Tennessee legislature did not hold off on voting for the amendment until after the next election, and you'd be right – they didn't; hence, they acted upon it illegally before they were authorized to do so. They also violated their own state constitution by failing to read the resolution on three different days as prescribed by Article II, Section 18. These state constitutional violations make their approval of the amendment null and void. Their approval is and was invalid, and it brings the number of approving states down to 35, one less than required for ratification.
Texas and Louisiana violated provisions in their state constitutions prohibiting the legislatures from empowering the federal government with any additional taxing authority. Now the number is down to 33.
Twelve other states, besides Tennessee, violated provisions in their constitutions requiring that a bill be read on three different days before voting on it. This is not a trivial requirement. It allows for a cooling off period; it enables members who may be absent one day to be present on another; it allows for a better familiarity with, and understanding of, the measure under consideration, since some members may not always read a bill or resolution before voting on it (believe it or not!). States violating this procedure were: Mississippi, Ohio, Arkansas, Minnesota, New Mexico, West Virginia, Indiana, Nevada, North Carolina, North Dakota, Colorado, and Illinois. Now the number is reduced to 21 states legally ratifying the amendment.
When Secretary Knox transmitted the proposed amendment to the states, official certified and sealed copies were sent. Likewise, when state results were returned to Knox, it was required that the documents, including the resolution that was actually approved, be properly certified, signed, and sealed by the appropriate official(s). This is no more than any ordinary citizen has to do in filing any legal document, so that it's authenticity is assured; otherwise it is not acceptable and is meaningless. How much more important it is to authenticate a constitutional amendment! Yet a number of states did not do this, returning uncertified, unsigned, and/or unsealed copies, and did not rectify their negligence even after being reminded and warned by Knox. The most egregious offenders were Ohio, California, Arkansas, Mississippi, and Minnesota – which did not send any copy at all, so Knox could not have known what they even voted on! Since four of these states were already disqualified above, California is now subtracted from the list of valid approvals, reducing it to 20.
These last five states, along with Kentucky and Oklahoma, have particularly strong implications with regard to the fraud charge against Knox, in that he cannot be excused for not knowing they shouldn't have been counted. Why was he in such a hurry? Why did he not demand that they send proper documentation? They never did.
Further review would make the list dwindle down much more, but with the number down to 20, sixteen fewer than required, this is a suitable place to rest, without getting into the matter of several states whose constitutions limited the taxing authority of their legislatures, which could not give to the federal govern authority they did not have.
The results from the six states Knox had not heard from at the time he made his proclamation do not affect the conclusion that the amendment was not legally ratified. Of those six: two (Virginia and Pennsylvania) he never did hear from, because they ignored the proposed amendment; Florida rejected it; two others (Vermont and Massachusetts) had rejected it much earlier by recorded votes, but, strangely, submitted to the Secretary within a few days of his ratification proclamation that they had passed it (without recorded votes); West Virginia had purportedly approved it at the end of January 1913, but its notification had not yet been received (remember that West Virginia had violated its own constitution, as noted above).
THERE IS NO LAW REQUIRING ORDINARY AMERICAN EMPLOYEES TO PAY FEDERAL INCOME TAX !! – http://www.youtube.com/watch?feature=player_embedded&v=1UCcW0RoNdc#at=282
*** Bill Benson wrote a book in 1985 – The Law That Never Was. Summary: The authority of the federal government to collect its income tax depends upon the 16th Amendment to the U.S. Constitution, the federal income tax amendment, which was allegedly ratified in 1913. After a year of extensive research, Bill Benson discovered that the 16th Amendment was not ratified by the required 3/4 of the states, but nevertheless Secretary of State Philander Knox fraudulently announced ratification.
Article V of the U.S. Constitution defines the ratification process and requires three-fourths of the states to ratify any amendment proposed by Congress. There were forty-eight states in the American Union in 1913, meaning that affirmative action of thirty-six was necessary for ratification. In February 1913, Secretary of State Philander Knox proclaimed that thirty-eight had ratified the Amendment.
In 1984 Bill Benson began a research project, never before performed, to investigate the process of ratification of the 16th Amendment. After traveling to the capitols of the New England states and reviewing the journals of the state legislative bodies, he saw that many states had not ratified. He continued his research at the National Archives in Washington, D.C.; it was here that Bill found his Golden Key.
This damning piece of evidence is a sixteen-page memorandum from the Solicitor of the Department of State, among whose duties is the provision of legal opinions for the Secretary of State. In this memorandum, the Solicitor lists the many errors he found in the ratification process.
These four states are among the thirty-eight from which Philander Knox claimed ratification:
California: The legislature never recorded any vote on any proposal to adopt the amendment proposed by Congress.
Kentucky: The Senate voted on the resolution, but rejected it by a vote of nine in favor and twenty-two opposed.
Minnesota: The State sent nothing to the Secretary of State in Washington.
Oklahoma: The Senate amended the language of the 16th Amendment to have a precisely opposite meaning.
When his project was finished at the end of 1984, Bill had visited the capitol of every state from 1913 and knew that not a single one had actually and legally ratified the proposal to amend the U.S. Constitution. Thirty-three states engaged in the unauthorized activity of altering the language of an amendment proposed by Congress, a power that the states do not possess.
Since thirty-six states were needed for ratification, the failure of thirteen to ratify was fatal to the Amendment. This occurs within the major (first three) defects tabulated in Defects in Ratification of the 16th Amendment. Even if we were to ignore defects of spelling, capitalization and punctuation, we would still have only two states which successfully ratified.
II. Historical Income Tax Rates & Brackets
Top bracket
Calendar Year
(percent)
Taxable Income Up to
Income over
1 20,000 7 500,000
2 20,000 15 2,000,000
2 2,000 67 2,000,000
4 4,000 56 200,000
1.5 4,000 46 500,000
1? 4,000 25 100,000
Hoover, then FDR
4.4 4,000 81.1 5,000,000
10 2,000 81 5,000,000
19 2,000 88 200,000
FDR, then Truman
19 2,000 86.45 200,000
16.6 4,000 82.13 400,000
17.4 4,000 91 400,000
814 2,100 70 212,000
13.825 2,100 69.125 212,000
11 3,000 38.5 90,000
15 29,750 28 29,750
15 36,900 39.6 250,000
15 42, 200 39.1 297,350
III. WHERE DO OUR FEDERAL TAX DOLLARS GO?
April 12, 2013, Center on Budget and Policy Priorities
The federal government collects taxes to finance various public services. As policymakers and citizens weigh key decisions about revenues and expenditures, it is instructive to examine what the government does with the money it collects.
In fiscal year 2012, the federal government spent $3.5 trillion, amounting to 23 percent of the nation's Gross Domestic Product (GDP). Of that $3.5 trillion, nearly $2.5 trillion was financed by federal revenues. The remaining amount (about $1.1 trillion) was financed by borrowing; this deficit will ultimately be paid for by future taxpayers. As the graph on the next page shows, three major areas of spending each make up about one-fifth of the budget:
Defense and international security assistance: In 2012, 19 percent of the budget, or $689 billion, paid for defense and security-related international activities. The bulk of the spending in this category reflects the underlying costs of the Department of Defense. The total also includes the cost of supporting operations in Afghanistan and other related activities, described as Overseas Contingency Operations in the budget, funding for which totaled $127 billion in 2012.
Social Security: Another 22 percent of the budget, or $773 billion, paid for Social Security, which provided monthly retirement benefits averaging $1,262 to 36.7 million retired workers in December 2012. Social Security also provided benefits to 2.9 million spouses and children of retired workers, 6.3 million surviving children and spouses of deceased workers, and 10.9 million disabled workers and their eligible dependents in December 2012.
Medicare, Medicaid, and CHIP: Three health insurance programs — Medicare, Medicaid, and the Children's Health Insurance Program (CHIP) — together accounted for 21 percent of the budget in 2012, or $732 billion. Nearly two-thirds of this amount, or $472 billion, went to Medicare, which provides health coverage to around 48 million people who are over the age of 65 or have disabilities. The remainder of this category funds Medicaid and CHIP, which in a typical month in 2012 provided health care or long-term care to about 60 million low-income children, parents, elderly people, and people with disabilities. Both Medicaid and CHIP require matching payments from the states.
Two other categories together account for another fifth of federal spending:
Safety net programs: About 12 percent of the federal budget in 2012, or $411 billion, supported programs that provide aid (other than health insurance or Social Security benefits) to individuals and families facing hardship. Spending on safety net programs declined in both nominal and real terms between 2011 and 2012 as the economy continued to improve.
These programs include: the refundable portions of the Earned Income Tax Credit and Child Tax Credit, which assist low- and moderate-income working families through the tax code; programs that provide cash payments to eligible individuals or households, including Supplemental Security Income for the elderly or disabled poor and unemployment insurance; various forms of in-kind assistance for low-income families and individuals, including SNAP (food stamps), school meals, low-income housing assistance, child care assistance, and assistance in meeting home energy bills; and various other programs such as those that aid abused and neglected children.
Such programs keep millions of people out of poverty each year. A CBPP analysis shows that government safety net programs kept some 25 million people out of poverty in 2010. Without any government income assistance, either from safety net programs or other income supports like Social Security, the poverty rate would have been 28.6 percent in 2010, nearly double the actual 15.5 percent.
Interest on the national debt: The federal government must make regular interest payments on the money it has borrowed to finance past deficits — that is, on the national debt held by the public, which reached $11 trillion by the end of fiscal year 2012. In 2012, these interest payments claimed $220 billion, or about 6 percent of the budget.
As the chart above shows, the remaining fifth of federal spending goes to support a wide variety of other public services. These include providing health care and other benefits to veterans and retirement benefits to retired federal employees, assuring safe food and drugs, protecting the environment, and investing in education, scientific and medical research, and basic infrastructure such as roads, bridges, and airports. A very small slice — about 1 percent of the total budget — goes to non-security programs that operate internationally, including programs that provide humanitarian aid.
*** Estimates of spending in fiscal year 2012 were based on the most recent historical data released by the Office of Management and Budget (OMB). (The federal fiscal year 2012 ran from October 1, 2011 to September 30, 2012.)
Reference: "Policy Basics: Where Do Our Federal Tax Dollars Go?," Center on Budget and Policy Priorities, March 12, 2013. Accessed at: http://www.cbpp.org/cms/?fa=view&id=1258
Posted in Uncategorized	| Tagged 16th Amendment, 1913, abolish the income tax, abolish the IRS, Abraham Lincoln, apportionment of taxes, Article I Section 8, Article I Section 9, audit, Bailey Bill, Bestiat, Bill Benson, Bill Clinton, Civil War, Constitution, entitlement, exemptions, Fair Tax, FDR, federal income tax, gestapo, gradual, graduated, income tax, Internal Revenue Service, IRS, IRS audit, IRS scandal, James Madison, JFK, legal plunder, legalized plunder, Lincoln, Nelson Aldrich, Nixon, Obama, plunder, Pollock v. Farmers Loan, progressive, progressive income tax, redistribution of wealth, resolution, revenue, Revenue Act of 1862, Sereno Payne, Sixteenth Amendment, Soak the Rich, social, Springer v. US, Tariff Act of 1909, Tax Code, tax reform, taxation, Teddy Roosevelt, Thomas Jefferson, Underwood, wealth redistribution, welfare, William Howard Taft, Woodrow Wilson	| Leave a reply
RESOLUTION – To Abolish the Federal Income Tax and the IRS
Posted on July 9, 2013 by forloveofgodandcountry
Whereas, with the IRS able to look at the financial records of Americans, it gives the government power to make decisions as to when certain citizens "have enough already," and then wage war on their "excess"; and
"How Some States Did Not Legally Ratify the Sixteenth Amendment" – http://www.givemeliberty.org/features/taxes/notratified.htm
Gail Russell Chaddock, "Playing the IRS Card: Six Presidents Who Used the IRS to Bash Political Foes," The Christian Science Monitor, May 17, 2013. Referenced at: http://www.csmonitor.com/USA/DC-Decoder/2013/0517/Playing-the-IRS-card-Six-presidents-who-used-the-IRS-to-bash-political-foes/President-John-Kennedy-D
Posted in Uncategorized	| Tagged 16th Amendment, abolish the income tax, abolish the IRS, audit, Fair Tax, federal income tax, gestapo, graduated, income tax, Internal Revenue Service, IRS, IRS audit, progressive, progressive income tax, resolution, revenue, Sixteenth Amendment, Tax Code, tax reform, taxation	| Leave a reply
Has the Time Come for Us to Switch to the Fair Tax?
Although the federal income tax system was designed and intended to make up for revenue losses due to tariff reform, it quickly became a primary means to fund the programs of our bloated federal government. The Constitution provides that Congress is authorized to tax and spend for its constitutional purposes, but the reverse is also true… it is NOT empowered to tax and spend for unconstitutional objects. As we all know, the "General Welfare" clause, as well as the "Necessary and Proper" Clause, are not separate grants of power.
The income tax, as used by our government, has become an arbitrary tool to plunder the property, income, assets, savings, gifts, etc of American citizens, burdening their very freedom and chilling their Pursuit of Happiness. Thomas Jefferson wrote: "To take from one, because it is thought his own industry and that of his father's has acquired too much, in order to spare to others, who, or whose fathers, have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, the guarantee to everyone the free exercise of his industry and the fruits acquired by it." Furthermore, the federal government is engaged in so many unconstitutional objects that it is currently using taxation to force Americans to support programs, speech, religion, ideology, and social views that many find offensive. Again, Jefferson wrote on the subject: "To compel a man to subsidize with his taxes the propagation of ideas which he disbelieves and abhors is sinful and tyrannical."
We need to return to a taxation system similar to the one established by our Founding Fathers. They did not penalize productivity through taxes the way we do today. They had no Internal Revenue Service. They believed in minimal taxation. They didn't believe in income taxes, which were prohibited by the Constitution ("unless in proportion to the census or enumeration before directed to be taken") – that is, unless such taxation was uniform and equally applied. They would have been horrified at the enormity of tax schemes crafted to plunder Americans' income and property in order to fund a bloated government – income taxes, employment taxes, capital gains taxes, estate taxes, corporate taxes, property taxes, Social Security taxes, gas taxes, etc. It was excessive taxation like this that drove our founding patriots and Founding Fathers to rebel against Great Britain in the first place. They did not believe in paying export taxes, which also were prohibited by the Constitution. But they did believe revenue to fund the responsibilities of the federal government should be raised by taxing imports. The Founders believed in free trade within our own borders and a system of tariffs on imported goods.
That's a system that makes sense. It is a system designed to preserve individual liberty and encourage productivity (through no income taxes and no discouragement of domestic production through export taxes) while choosing to keep taxes as painless as possible (through taxes on foreign imports). And it doesn't require an IRS to run it.
All of the Founders were opposed to domestic taxes. They regarded high taxes and aggressive tax collectors as tyrannical and always to be guarded against. Patrick Henry warned: "Excisemen may come in multitudes, for the limitation of their numbers no man knows. They may, unless the general government be restrained by a bill of rights or some similar restriction, go into your cellars and rooms and search, ransack and measure everything you eat, drink and wear." (A prophetic statement?)
The Internal Revenue Service was started in 1862 – nearly 100 years after the Revolutionary War – as the Bureau of Internal Revenue. It was created to collect the income tax that President Lincoln and Congress imposed on the states and territories of the Union to pay for the costs of the Civil War. The Revenue Act of 1862 was allowed to expired 10 years later, but was revived in 1894, although temporarily. It was struck down by the Supreme Court as unconstitutional in 1895. In 1913, Congress was able to devise a scheme ("Soaking the Rich") to get around the "uniformity" requirements of the US Constitution with an income tax and that scheme became the Sixteenth Amendment. "Soaking the Rich" was an easy concept to sell to the states at the time. It soon became clear to anyone with substantial knowledge of the tax code that obtaining tax breaks for the wealthy would be a lucrative business. The tax lobbyists in Washington DC were born.
There were times in our history when the government taxed income at the highest brackets at almost 100%. Complete confiscation. For example, at its highest taxation level (94%; 1944-45), FDR explained: "Taxes shall be levied according to ability to pay. That's our American principle." That was also the time FDR was singing the praises of "Uncle Joe" (Joseph Stalin). FDR's "American principle" was really a Marxist principle – from Karl Marx' Communist Manifesto: "From each according to his abilities, to each according to his needs."
Ever since the passage of the Sixteenth Amendment and the direct ability the federal government had to take whatever it needed from the income of its citizens and the value of their assets and property, the income tax has deprived families of their rightful earnings, restricted our liberties, and deprived our economy of money that could have been invested in productive enterprises. It has been a "dull journey" to this point in history – the 21st century – where it seems many things are free except us.
Today the tax code is a complex, convoluted monstrosity of rules and exemptions. It is modified an average of three times daily when Congress is in session. It was modified a total of 579 times alone in 2010.
Today the IRS is the No. 1 enemy of your pocketbook. Who doesn't fear an IRS audit? It's the only federal agency that considers you guilty until proven innocent. It can't be overhauled or even reformed (Congress' attempts have failed), and the power to audit is a powerful tool tyrants in government can use to silence, intimidate, and harass political opponents and enemies.
In 1994, three Houston businessmen met for lunch – Jack Trotter, Bob McNair, and Leo Linbeck, Jr. As was common at their luncheons, they began to complain about the federal income tax system. But at this particular lunch, they decided to do more than just talk. They decided to try to do something about it. Each of them pledged $1.5 million as seed money to hire the best tax experts in America to identify the faults with the current federal tax system, to determine what American citizens would like to see in tax reform, and then to design the best system of taxation. With their initial investment of $4.5 million, Trotter, McNair, and Linbeck went on to raise an additional $17 million to fund focus groups and finance/fiscal studies, and additional research. The research was extensive and distinguished the Fair Tax from every other tax reform proposal ever put forward.
The tax policy experts hired to research and develop the Fair Tax include:
Professors David Burton and Dan Mastromarco, University of Maryland and The Argus Group
Professor Larry Kotlikoff, Boston University
Stephen Moore, The Cato Institute
Professor Dale Jorgenson, Harvard University
Bill Beach, The Heritage Foundation
Jim Poterba, The National Bureau of Economic Research
Professor George Zodrow, Rice University and the Baker Institute for Public Policy
Professor Joseph Kahn, Massachusetts Institute of Technology
The FairTax is a thoroughly and professionally-researched response to the question: "What do the American people want in their tax system?" In 1999, the Fair Tax plan was submitted in the US House as a bi-partisan bill – H.R. 2525 ("The Fair Tax Act of 1999″) – by Rep. John Linder (R-GA) and Rep. Collin Peterson (D-MN). In
January 2006, an additional $2 million was spent in research to make sure the Fair Tax was still the best tax replacement solution for our nation's current economic situation and the results concluded that it was. It was then resubmitted in the 111th Congress in January 2009 as H.R. 25 ("The Fair Tax Act of 2009").
The studies conducted by Trotter, McNair, and Linbeck in the 1990′s, and then continued in 2006, make the Fair Tax the most well-researched tax plan ever presented to Congress. The Fair Tax is also supported by a growing number of Americans, a growing number of groups across the political spectrum, and by a growing number of representatives in Washington DC. Governor Mike Huckabee is a huge supporter. In talking about the Fair Tax, he asks: "Wouldn't it be nice if April 15 were just another sunny spring day?"
It would be nice for hard-working Americans to enjoy the fruits of their education, mind, creativity, labor, and investment and have the flexibility to use them in the best way they deem fit to benefit their own families, their personal pursuits of happiness, and their retirement. It's time we had a system in which people didn't have to figure out ways to cheat in order to save their money.
If the Founding Fathers were here today, I believe they would support the Fair Tax. They favored a consumption tax and rejected an income tax. As James Madison said, "Taxes on consumption are always least burdensome because they are least felt and are borne, too, by those who are both willing and able to pay them…" Our Founders were students of history, and as their intention was to secure the Rights of Man as firmly and securely as possible, hopefully into perpetuity, they would have rejected the oppression that naturally comes when governments have the power of plunder. Thomas Paine wrote the following inThe Rights of Man (1791): "If, from the more wretched parts of the old world, we look at those which are in an advanced stage of improvement, we still find the greedy hand of government thrusting itself into every corner and crevice of industry, and grasping the spoil of the multitude. Invention is continually exercised, to furnish new pretenses for revenues and taxation. It watches prosperity as its prey and permits none to escape without tribute."
No one is suggesting that we don't need the revenue that taxes generate. We just need a system that is fair and aligns our government again with its purpose: to protect the "Life, Liberty, and Pursuit of Happiness" of every individual. The income tax and the IRS have perverted that purpose and have become instruments of wealth re-distribution and oppression.
We protested against the king and the parliament of Great Britain over a 3% tax on tea. Our early colonists were wise enough to understand that the protest wasn't really about the minute tax on tea but rather about the assault on individual liberty in general. As James Madison put it: "The people of the U.S. owe their Independence and their liberty to the wisdom of descrying in the minute tax of 3 pence on tea, the magnitude of the evil comprised in the precedent. Let them exert the same wisdom, in watching against every evil lurking under plausible disguises, and growing up from small beginnings." The income tax is far more oppressive and offensive than the Tea Act.
We don't need tax reform. We don't need Congress to amend or simplify the current Tax Code. We need it abolished. We need another tax protest and another tax revolution!
The following resolution addresses the many benefits of the Fair Tax and how it will restore property rights and the free exercise thereof.
RESOLUTION TO REPLACE THE INCOME TAX WITH THE FAIR TAX
The Fair Tax is a popular tax scheme that has become even more popular with the current IRS scandal and the growing population of Americans that contributes nothing to the revenue generated through federal income taxation. The Fair Tax plan replaces all federal income and payroll-based taxes with a national retail sales tax that is fair, simple, and understandable. Under this plan, no one pays any federal taxes on the purchase of basic necessities; yet it raises the same amount of revenue as does the income tax system. The Fair Tax Act of 2013 (H.R. 25/S. 122) is nonpartisan legislation that abolishes all federal personal and corporate income taxes, gift, estate, capital gains, alternative minimum, Social Security, Medicare, and self-employment taxes and replaces them with one simple, visible, 23% (inclusive) federal retail sales tax paid at the cash register. Individuals no longer file federal income tax returns and the IRS is eliminated through companion legislation. The FairTax applies to everyone in America, including illegal immigrants, foreign visitors (about 50,000 each year), and those who evade paying taxes under the income tax system. This innovative, extensively researched, grassroots supported tax system is a fair, efficient, transparent, and intelligent replacement of the frustrating, inequitable income tax system.
Our current tax scheme allows the government to assess and tax one of the fundamental legs of our very freedom – our property….. the fruits of our mind and labor and one of our most sacred pursuits of solitude, privacy, and happiness. The Fair Tax, on the other hand, is a consumption tax and therefore fair, non-arbitrary, and non-destructive of freedom. Since it is not an income tax, the Fair Tax renders the Sixteenth Amendment useless (so it can be repealed and off the books forever!) and the IRS as well (so it can be defunded and dismantled).
The Fair Tax is a national sales tax that would apply to every person that makes a purchase of new goods and services in the United States. It has been proposed by the US House as bill H.R. 25. The Fair Tax rate is 23%, which was calculated to equal to the lowest current income tax bracket (15%) combined with employee payroll taxes (7.65%), both of which will be eliminated. It achieves three goals at once: tax reform, boosts the economy, and generates jobs. The Congressional Joint Committee on Taxation studied what would happen if a national consumption tax were implemented (in place of our current progressive income tax) and economists from both ends of the political spectrum – from the far left to the far right – agreed that America's economy would grow faster if the switch were made to a true consumption tax. With the Fair Tax, not only will businesses be encouraged to stay in the United States and new businesses attracted to do business here, the people with their money offshore could bring it back to invest in our country, which would give a huge boost to our economy. It's the biggest stimulation package there is. As the FairTax website says, "Think of it as the World's Biggest Economic Jumper Cable."
The Fair Tax treats every person equally, broadens the tax base enormously, allows American businesses to thrive, encourages businesses which have left the country because of an onerous tax burden to return (as well as inviting new businesses here), all while generating the same or greater tax revenue as the current four-million-word-plus word tax code. Under the Fair Tax, every person living in the United States pays a sales tax (23%) on purchases of new goods and services, excluding those which are considered essential goods and services (ie, basic necessities) due to what's called a "prebate."
Under the Fair Tax, every American (irregardless of income earned or generated) can purchase essential goods and services tax-free up to the national poverty level through a tool called the prebate. A prebate would be a check from the federal government sent to every registered family at the beginning of each month to cover the costs of basic living. The amount of the prebate that each family would receive would be based on the U.S. Health and Human Services report of the Federal poverty level, estimated at the beginning of each year. This estimate would determine just how much money a family needs to meet their basic living expenses, and these expenses would be made totally tax free.
Whereas, the Fair Tax would tax consumption rather than production, providing a more transparent method of taxation and would repeal the 16th Amendment to the US Constitution thus eliminating the Internal Revenue Service. All taxes would be collected at the point of purchase and withholding taxes from citizen's paychecks and all hidden taxes passed to consumers would be eliminated; and
Whereas, the Fair Tax plan replaces all federal income and payroll-based taxes with a national retail sales tax that is fair, simple, understandable, and sure to cause no undue hardship on any consumer (see below regarding embedded taxes); and
Whereas, the Fair Tax would eliminate all federal taxes on businesses and corporations (the Fair Tax is strictly a personal consumption tax), providing a much better environment in which to conduct business, thereby improving the financial health of the United States and creating jobs; and
Whereas, the Fair Tax would encourage individuals, businesses, and corporations who are holding their money in offshore accounts (in order to shield those funds from excessive US taxation) to reinvest those funds in the US economy, also revitalizing the US economy;
Whereas, the IRS scandal has renewed interest in the Fair Tax, in particular because it renders the IRS unnecessary;
Whereas: There are currently bills in Congress – H.R.25, sponsored by Rep. Woodall (R-Ga.) with 67 co-sponsors including NC Representatives (Republican) Virginia Foxx and Mark Meadows, and S.122, sponsored by Senator Chambliss (Ga.) with seven co-sponsors including NC Senator Richard Burr – to pass legislation implementing the FairTax [1]; and
Whereas, Congress bears a moral responsibility to protect individual property rights, the right to Pursue Happiness (not burden or punish that pursuit), and economic liberty; and
Whereas, it has become a moral imperative and an urgent imperative to secure fundamental notions of liberty and abolish the federal progressive tax, it is our position that it should be replaced with the Fair Tax (a national sales tax of about 23%, on new items for personal consumption only, that would replace both federal income tax and the payroll tax );
Whereas, the Fair Tax is supported because it is the most studied legislative proposal in the history of the United States; and
Whereas, the Fair Tax would provide the country a more reliable tax base during both periods of economic expansion and periods of economic contraction; and
Whereas, the Fair Tax is better than an income tax for the following reasons:
– It eliminates the inherent unfairness, problems, and costs associated with the progressive income tax mentioned above; and
– It renders the Sixteenth Amendment obsolete (enabling it to be repealed), eliminates the voluminous, incomprehensible Tax Code, eliminates the IRS (and all audits of federal income tax returns), and eliminates income tax entirely!! In other words, it eliminates payroll taxes of all kinds, including Social Security and Medicare taxes, as well as corporate, gift, estate, capital gains, death, self-employment, and alternative minimum taxes. It also eliminates the income tax credit. (They are all gone!) Social Security and Medicare benefits would continue; only the means of collecting revenue to fund these programs changes;
– It makes federal tax collection fairer, smarter and apolitical; and
– It alleviates the criticisms and objections of ordinary Americans who feel that corporations, wealthy individuals and families, and special interest groups have unfair access to loopholes and exemptions that help them avoid paying their "fair share"; and
– It ends the unhealthy relationship which exists between the tax lobbyist, the wealthy client, and certain members of congress; and
– It broadens the tax base; it includes EVERY person who spends money in the US, including tourists!! (tourists alone will add some 51 million extra taxpayers every year); and
– It treats everyone the same with no deductions, exemptions, loopholes or interference by lobbyists; and
– The Fair Tax is the only system that shows Americans clearly and concisely exactly how much money they are sending to the federal government – 23% on every purchase of new goods and services. It is the only proposal to completely eliminate all loopholes, exceptions, and exemptions so that all Americans know their neighbor has just as much skin in the game as they do; and
– The Fair Tax is the only system that puts Americans in control of how much they want to contribute to the federal government. Since the tax is only on NEW goods and products, individuals can keep more of their money if they choose to purchase used items or make the effort to shop frugally; and
– It requires very little bureaucracy. Collection of the national sales tax (Fair Tax) can use systems already in place at the state level without adding any additional (significant) burden. The Fair Tax lays out a plan for the states to easily collect and transfer money to the federal government; and
– It saves a lot of money and time for the American taxpayer. Saving and collecting records and receipts is time-consuming, a hassle, and a big headache. Just complying with our voluminous and complicated federal tax system costs Americans about $431 billion a year, according to economist Arthur Laffer (although other estimates go as high as $600 billion). American taxpaying families often have to hire a CPA. Furthermore, another $1000 to $2000 in embedded costs are passed on to the average consumer each year by businesses who have to add the cost of tax compliance to their "cost of doing business" and therefore to the cost of their products and services (for every dollar sent to the IRS, it costs 30 cents in compliance); and
– It is mindful of the poverty limit. It provides a prebate to ensure that no American pays federal taxes on spending up to the poverty level. (Another option discussed, to avoid any arbitrary assignment of "poverty limit," is to not tax food items); and
– It would force drug dealers and other criminals to pay their fair share in taxes. Gang members, mafioso, and drug dealers don't pay income tax on their sometimes considerable ill-gotten income, but with the Fair Tax, they would pay their taxes just like everyone else; and
– It would force even illegal immigrations to pay their fair share in taxes. Immigrants who are here illegally (ie, broke the law to be here), are not paying any federal income tax yet they are sucking the lifeblood out of government benefits and other social programs, including public education and subsidized healthcare. With the Fair Tax, they would pay their taxes just like everyone else; and
– It would eliminate the temptation to commit a number of crimes. For one thing, there would be no benefit to working "under the table." Right now, people who don't report their income (tax cheaters) are not only not paying into the system, but they are often sending large sums of their unreported income back to their home countries. With the Fair Tax, this problem vanishes, as does every other tax fraud-related crime, which currently costs the Treasury a figure running into at least the tens of billions; and
– It would also eliminate crimes of political corruption, as politicians would be unable to repay big donors with tax favors; and
– It would eliminate even the possibility that an otherwise honest taxpaying citizen might be tempted to cheat the system. There is no opportunity to cheat on sales tax. If you don't pay the tax, the purchase is not complete; and
– It would restore individual privacy rights. After all, if the federal government is such a big fan of privacy in the bedroom, in the abortion clinic, and in the sex of who we choose to marry, shouldn't it also respect the privacy associated with our career advances, our income, our wallets, our bank accounts, and in our property; and
– Also speaking of privacy, it eliminates the need to declare who you live with (marriage clarification); and
– By abolishing the IRS, it restores to churches and nonprofit organizations the First Amendment rights they now hesitate to use, for fear of losing tax-exempt status; and
– By allowing individuals and families to keep more of their income, it will encourage greater charitable donations; and
– It would eliminate the opportunity the government has of using taxation as a means of political harassment, intimidation, oppression, or retribution. The government cannot use the tax code or the IRS' audit powers to penalize any one group or individual; and
– It honors the American ideal that the more one is willing to work, the harder you are willing to work, the more you are willing to invest in your education and career, the more one should benefit and enjoy the fruits of his/her labor and the more wealth one should be able to accumulate. In other words, they don't PUNISH success or stigmatize it and they don't penalize and weaken the American work ethic (by sending the message that with government providing handouts on the one hand to those who won't work and plundering the salaries of those who work on the other hand, it is more desirable to go with option #1); and
– It enables workers and retirees to receive 100% of their paychecks and pension benefits; and
– It encourages saving and investing, thereby providing capital needed for creation of jobs and economic growth; and
– It classifies tuition as an investment in human capital rather than consumption, thereby making education about half as expensive as it is now; and
– Along with other economic advantages, the Fair Tax would actually bring down the cost of goods by eliminating embedded taxes included in the price of goods and services. Approximately 20% of what a consumer pays for any given good or service right now represents what the business has to tack on to cover the cost of compliance with our onerous tax regulations (and as we all know, businesses always pass those costs on to the consumer). Without these costs, the prices of goods and services will come down approximately 20%. If the Fair Tax imposes a 23% national sales tax while at the same time reducing current costs by 20% due to imbedded taxes that are not longer required, then consumers would essentially be paying the exact same price for goods and services without having to file a tax return in April and surrender any more of their earnings and property; and
– It would create jobs!! The Fair Tax would reverse the current destructive trend whereby businesses and jobs are being chased out of the country because of a burdensome, insanely-complex tax code. It would bring all those businesses and jobs back to America. Even more, the promise of no corporate taxes and no tax compliance costs ($3 in compliance costs to pay $1 in payroll and income taxes) would lure new businesses and jobs here. The US could become the most attractive tax-free haven in the world for doing business; and
– It solves the problem of double-taxation (for example, when a publicly-traded company pays corporate taxes on its earnings and then passes on some of those earnings onto shareholders as dividends, on which they must pay individual income tax or capital gains tax); and
– It would further the "Go Green!" movement by making obsolete the process of sending out 8 billion pages of forms and instructions every year (Fun facts: (1) It takes 30,000 trees each year to produce all the paper the IRS needs, even with the availability of electronic filing. (2) If all these pages were laid end-to-end, they would circle around the Earth 28 times); and
– Further, with respect to the 'conservation of resources' movement, since the Fair Tax applies to the purchase of new products (such as homes, cars, furniture, clothes), it encourages proper maintenance and care, recycling and reuse. People will not only first look to buy used homes, cars, etc, but owners will take better care of their items; and
– It supports every aspect of the working world. The Fair Tax applies only to items for personal consumption. If the new item is NOT for personal consumption, it is not taxed. (For example, if a business owner buys a piece of new equipment for his business or a farmer buys a new tractor for his farm, they do not pay the consumption tax on those item. In this way, the Fair Tax supports every aspect of the working world, from the business owner to the working man; and
– It eliminates the stress and anxiety of wondering if tax returns were filled out properly, if income was declared correctly, and if one will be subjected or targeted for an audit (As Will Rogers said: "The income tax has made more liars out of the American people than golf has. Even when you make a tax form out on the level, you don't know when it's through if you are a crook or a martyr."); and
– It is capable of being understood by all persons and don't require the assistance and services (not cheap!) of a CPA; and
– It eliminates the present bias against work, saving, and investment caused by taxing income and instead, substitutes a moral-based system of contributing to the government (ie, everyone contributes to a government that serves them equally). Eliminating this bias will lead to higher rates of economic growth, greater productivity of labor, rising real wages, more jobs, lower interest rates, and a higher standard of living for all Americans; and
– It offers other economic benefits:
1. U.S. exports could compete with foreign goods, as imports would be subject to the same Fair Tax as domestic products;
2. Reduces production costs for currently subsidized businesses like farming, leading to a reduction in subsidies, which would reduce the federal budget (aka spending cuts)
3. Consumption has been shown to be more stable than income, therefore the tax revenue stream would likely be a more predictable amount and inflation could be better prevented
4. By eliminating capital gains tax, investments in business would be encouraged
5. By eliminating the death tax, families could keep their farms and businesses
6. By eliminating the gift tax, individuals could offer tax-free assistance to each other
7. By eliminating the need for states, counties, municipalities and school districts to pay FICA, those entities would see significant increases in their available budget revenues.
Therefore, be it ….
Resolved, that to be competitive in the next century and to renew the American dream, we must change the way we fund our national government; and
Resolved, that the ________________________ (group name) believes that the benefits of the Fair Tax are compelling and offer solutions far beyond mere tax reform; and
Resolved, that eliminating the income tax will do more than anything else to shift the power from Washington back to the People; and
Resolved, that the ________________________ (group name) requests that North Carolina representatives in both the US House and US Senate move to bring bills H.R.25 and S.122 to their respective floor for discussion and vote; and let it be further
Resolved, that the ________________________ (group name) urges all representatives in both the NC and US Houses and Senate to publically declare their positions on the FairTax bills.
[1] – H.R. 25 is also called the "Fair Tax Act of 2013." It's full title is: "Bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national sales tax to be administered primarily by the States." Bill Summary: "Fair Tax Act of 2013 – (i) Repeals the income tax, employment tax, and estate and gift tax. (ii) Re-designates the Internal Revenue Code of 1986 as the Internal Revenue Code of 2013. (iii) Imposes a national sales tax on the use or consumption in the United States of taxable property or services. (iv) Sets the sales tax rate at 23% in 2015, with adjustments to the rate in subsequent years. (v) Allows exemptions from the tax for property or services purchased for business, export, or investment purposes, and for state government functions….." Assigned to Congressional Committee Jan. 3, 2013]http://www.govtrack.us/congress/bills/113/hr25 and http://www.govtrack.us/congress/bills/113/s122
Posted in Uncategorized	| Tagged Fair Tax, graduated, income tax, IRS, national sales tax, Neil Boortz, progressive, resolution, Tax Code, tax reform	| Leave a reply
Posted on June 21, 2013 by forloveofgodandcountry
by Diane Rufino (who attended the rally)
On Wednesday, June 19th, a protest event, termed "Audit the IRS" Rally, was held on the front lawn of the US Capitol to demand accountability for the actions of the Obama administration, in particular the IRS and Homeland Security for using the powers of government to intimidate, harass, and silence conservative organizations and ordinary Americans who have done nothing wrong. The actions of government have amounted to gross civil rights violations – the violation of the fundamental rights of free speech/expression and assembly (1st Amendment), conscience (1st Amendment), and privacy (4th Amendment), as well as interference with the right to vote. It's ironic that Voter ID laws must be cleared by the DOJ so that the government can make sure minorities are not harmed in any way in the exercise of their right to vote but the same government can directly stand in the way of conservatives trying to vote and get involved in the election process.
The protest event featured about 20-30 Congressmen, FreedomWorks activists, Restore America's Voice, Americans for Prosperity, Patriot Action Network, Brent Bozell, authors, Tea Party leaders, victims of IRS inquisitions, and groups such as the ACLJ (American Center for Law & Justice; Jordan Sekulow) who are defending the rights of approximately 50 conservative groups which have been targeted by the government. The event's featured speaker, however, was none other than Glenn Beck, who delivered a riveting speech outlining exactly what is at stake in the government's concerted scheme to shut down political opposition. In a nutshell, Beck alleged that what is going on today is about the encroachment on American's civil rights from an abusive tyrannical government and outlined how we need to get back to our founding principles to win this battle against the progressive agenda which ultimately seeks to transform our system from one that protects the rights of the individual to one that seeks to govern for the best of the collective.
In part, Beck delivered the following comments:
"Today, inside, they dedicated a new statue of another American giant, Fredrick Douglas – a man born into slavery, but who knew instinctively that he was not born a slave. No man is.
To keep a man a slave you do much the same as the cruel circus masters did to the elephant around the turn of last century. Clamp heavy chains around their legs and stake them to the ground. Then beat and terrorize them. After a while you no longer even have to stake the chain; the elephant gives up and just the mere rattle of the chain convinces the elephant there is no hope, so they give up and do whatever it is the circus requires.
Fredrick Douglas was lucky enough to live in a house where he was taught to read, write and think. He knew God did not make men masters over others. Nor did he ever intend any man to impose unrighteous dominion over another man or beast.
It is time we remind ourselves of this truth again, and begin to rise up against the intimidation before the handful of peanuts from our new political circus masters is considered a kindness and not the symbol of evil cruelty.
In the building behind me, they are now excusing storing all data, phone calls, financial transactions, geotracking on every American for our "safety," while allowing anyone to cross our borders either on foot or in underground tunnels without any worry or consequence. They have not suspended or fired but promoted those at the IRS who rattled the chains of control to any group that disagreed with their policies. Whatever the reason, too many are no longer willing to call evil by its name.
Someone has always been on the losing end of the stick of power. Blacks are the most obvious, the Chinese, the Native Americans, but let's not forget the Irish, the Catholics, the Mormons, the Jews, and now it seems that all those of faith who will not conform are the targets. Man doesn't vanquish hatred or bigotry. The target keeps moving. From the blacks to the Irish. Atheists to Christians.
But as always, there are a few leaders: Ben Franklin, John Quincy Adams, Harriet Beecher Stowe, Abraham Lincoln, Fredrick Douglas, Booker T. Washington, Gandhi and Martin Luther King. They know that the march toward freedom never ends; man must be ever-vigilant and pray less with his lips and more with his legs. They never forget that truth, justice, and freedom are the wellspring from which the waters of man's civil rights come. And so they must be upheld for all men – those you know, those you do not, and maybe more importantly — they must be upheld for those who you do know but do not like or agree with at all. If they are lost for one, in the end they are lost for all.
In the past, these historic stands which we now call civil rights movements were done by a small but dedicated portion of our citizens which led to great shifts in our culture. The rights that so many Americans ignorantly preach about so often are not really their rights. They belong to God and they are given to us for stewardship. They are pretty important and obvious. So obvious that we used to say they were "self-evident," meaning that humans don't need to be taught; you instinctively know that you have a right not to be executed without a trial, held without charge, searched without warrant or spied upon without cause.
The government is no longer the protector of those civil rights, and so we must be. When we are told that it is okay for the IRS, EPA, ATF, FBI or anyone to hassle, threaten or intimidate others because of their skin color, religion or political belief, we stop being the country that we all want to build, and start being the country the world should fear.
Men may make progress, but man never changes. Man loves power and money. No matter the skin color, religion or income level. These symbols of our nation make men drunk with power, who then justify their lust for more by claiming they are public servants. The only difference between Las Vegas and Washington, D.C. is that at least Vegas has the decency to admit the town is full of hookers and crooks
The long train of abuses regarding these rights are the same MLK marched against, and the very same our dusty Founders warned us about losing.
We must sober up and admit that too many of the Republicans and the Democrats have played us, lied to us and stolen from us, while the getaway car was driven by the media. A media that can no longer claim with a straight face the role of journalist. Journalists print the things the powerful don't want printed. What they do is public relations. Those PR firms will not print the truth about the average American who finds himself concerned with the direction of our country today. So we must. We are not violent. We are not racist. We are not anti-immigrant. We are not anti-government. And we will not be silent anymore.
We come today to declare our independence, to reaffirm our founding principles. We, as a nation, acknowledge a creator. We acknowledge that he gives certain natural, guaranteed rights to man. We declare that government exists primarily to protect these natural, God-given rights. He has established right and wrong. He is just and therefore, man must pay for his mistakes either now on Earth, or through God's justice later.
Those who wish to use unrighteous dominion over mankind are not enemies of ours; they are enemies of God, and He will not be silent much longer either. There is no such thing as social justice. Only God can balance things out, and we are not God. But honest and decent men can fight for and establish equal justice.
We will no longer accept the lies, the corruption, or the information and data gathering. It is evil. And we come here today to send a message that we will surround all of those who wish to stand and break the cycle of corruption. We will use ourselves as shields to protect those in the system, the elected officials or whistle blowers with the courage to stand.
We come here today to respectfully, but with the power of the spirit, demand to be treated as an equal members of society. I answer to only one King and His kingdom will come, His will be done. We have chosen sides and we choose God. America as a nation must do the same, as well."
To hear the entire content of Glenn Beck's speech, go to http://savingtherepublic.com/blog/2013/06/glenn-beck-rocks-at-the-audit-the-irs-rally-is-this-country-even-worth-defending-anymore-full-speech/
Brent Bozell asked: "Do you want a federal investigation?" He said: "I am sick and tired of not getting answers from my government when my government is abusing my freedoms. It is time to fire Eric Holder." And Steve Lonegan, former GOP candidate for Governor of NJ and current chair of the NJ chapter of Americans for Prosperity, led the crowd to chant: "Don't Tread on Me!"
The speakers reminded the crowd of what the Founders wrote in the Declaration of Independence – (i) that power was delegated to government by sovereign individuals, by a "consent of the governed," (ii) for the primary purpose of protecting and securing their God-given inalienable rights, and (iii) when any government becomes destructive of those ends, the people have a right and a duty to alter and abolish that government and establish a government that better protects their "safety and happiness." The clear message of the afternoon was that our current government has become destructive of the purpose and end of government and it needs to be altered, and specifically, by abolishing the IRS.
For example, Rick Morlen of the NM Tea Party, spoke:
"Our Founding Fathers weren't acting on behalf of a political party when they wrote the Declaration of Independence. They were simply trying to secure individual liberty by creating a limited government that would stand for certain principles and stand the test of time. They wrote that that all men are created equal and endowed by their Creator with certain unalienable rights and that governments deriving their just powers from the consent of the governed must secure those rights. They wrote that people must, infrequently, consider altering their government whenever it becomes destructive of their rights. The Declaration listed a series of grievances against the King of England which propelled the colonies to seek their independence. Listen while I remind you of some of those grievances: for refusing to pass laws of immediate importance, for invading the rights of the people, for suspending our legislatures and himself with the power to legislate for us, for denying our citizens the benefit of a trial by jury, for erecting a multitude of new offices, and sending forth swarms of officers to harass our people and eat out their substance, for keeping among us – in times of peace – standing armies without the consent of our legislatures, to render the military independent of and superior to civil power, for subjecting us to the jurisdiction of law that is foreign to our constitution, and for taking away our Charters, abolishing our most valuable Laws, and altering fundamentally the forms of our governments.
We are not here to set up a new government. We are here to bear witness that we need to alter the government of this great country and to bring it back under the control of the people. And one way is to abolish the IRS. We acknowledge that there is a need to tax the people for the constitutionally-limited purposes of government, but that taxation should be fair and borne by all the people who enjoy living under this republic."
Ken Hoagland, chairman of Restore America's Voice, spoke after Glenn Beck, Senator Rand Paul and Senator Mike Lee. Hoagland attended the event first to deliver 2 million petitions to Repeal Obamacare that his organization collected from citizens (with the help of Mike Huckabee) and also to speak. He quickly became a crowd-pleaser with his words:
"I want you to remember this name – Bob Bauer. Bob Bauer, who was the top lawyer for the Democratic National Committee, Senator Barack Obama's mentor, the White House's counsel, and then the General Counsel for the Obama-Biden re-election campaign, sent memo after memo to the Justice Department, the IRS, and 'all interested parties,' urging them to go after all law-abiding citizens who wanted to end voter fraud and exercise their rights of free speech to stop an out-of-control federal government. This abuse of Americans was directed by Washington at the very highest levels of the Obama administration and campaign. Bob Bauer.
No natural disaster or foreign enemy has hurt us as much as our own government. The economic collapse that still has 12 million citizens unemployed was caused by the government insisting that all Americans are entitled to a home and then disastrously insisting that the marketplace not be purged of the toxic mortgages provided for those homes. We didn't do that; the government did. Adding insult to injury, the government then forced taxpayers to use their hard-earned money to bail out the guilty parties and give them bonuses. Then it passed Obamacare – ramming it down our throats. As if this wasn't enough, Obama recently appointed the same woman who oversaw the abuse of Tea Party groups to be in charge of Obamacare at the IRS. All of this was done without the consent of the governed, as guaranteed in the Declaration of Independence. We didn't consent to the bail-outs, we didn't consent to Obamacare, and we didn't consent to be spied on.
Our Founding Fathers wrote the Declaration of Independence, remembering the actions of a King who swept up citizens and held secret hearings to condemn them. The true traitors are those self-important brutes in our government who work behind closed doors and in session to dismantle the Bill of Rights and other constitutional protects without the consent of the governed.
We will never be free until we abolish the IRS and close its doors forever. We will never be free until we rid the government of that power over the People."
Rep. Tom Price (R-GA) reminded those who attended the rally of the abuses of the IRS:
"I believe that trust in government is vital in a free society. and I believe that trust in our government has been violated. Nowhere is that trust more important and more violated than with the IRS, an agency that access to personal information about your finances and associations. We've learned outrageous things about what the IRS has been doing since 2009. The IRS has targeted your groups. The IRS has tried to extort money from you in order to shut you down because you are proven organizers of opposition. The IRS has leaked information about your donors and then targeted those donors. This is different than anything we've seen before because it's not the government going after Republicans or Democrats. It's the government going after just plain folks – just plain 'ol folks like you. We all know that the IRS is the enforcement arm of Obamacare. Do you want the IFS involved in your healthcare? Do you want the IRS knowing about your healthcare? I certainly don't."
Two bills have been introduced which address the abuse at the hands of the IRS. One was introduced by Rep. Tom Price and the other by Rep. John Fleming (R-LA), who also spoke at the rally. Rep. Price introduced H.R. 2009 on May 16, termed the "Keep the IRS Off Your Healthcare Act of 2013," which would prohibit the Secretary of the Treasury from enforcing Obamacare. Specifically, it says that the IRS may NOT enforce or implement any portion of Obamacare. Rep. Fleming introduced H.R. 2045 on May 17, termed the "Halt the IRS Act," which would prohibit officers and employees of the Internal Revenue Service from initiating any new audits for 180 days (to give the House the opportunity to get to the bottom of the scandal). To track these bills, go tohttp://www.govtrack.us/congress/bills/113/hr2045 and http://www.govtrack.us/congress/bills/113/hr2009
One has to be concerned that an organization that has become the gestapo arm of the Obama administration will be in charge of implementing Obamacare. Will elder conservative leaders be denied life-saving health services because they happen to belong to a Tea Party group, teach about the Founding Fathers, attend Tea Party rallies, promote the Right to Life, criticize President Obama, or support the limitations set forth in the Constitution? Of course, the surest way to abolish the IRS is to push for the Fair Tax, a national consumption tax, or a Flat Tax. A tax that requires that the burden to fund the government be shared among every American will eliminate the "progressive income tax" that was ushered in with the 16th Amendment and which resulted in the establishment of the tax code and the Internal Revenue Service (IRS). A Fair Tax or Flat Tax will render the 16th Amendment useless (so we can abolish it) and will eliminate the IRS. Americans will be able to file their taxes by simply filling out a postcard. As Ken Hoagland said: "Repeal of the Income Tax will do more than anything to shift the power from Washington back to the People!"
The protest also addressed the Immigration Reform bill (AMNESTY, in short!) and the Cornyn Amendment, which was co-sponsored by our very own Senator Burr), which are currently being pushed by Congress. The legislation and the amendment are simply BAD and will grant amnesty to approximately 15-20 million illegal immigrants who have chosen to enter our country illegally and take advantage of our welfare, Food Stamps, healthcare, and education, to name a few services (without providing a fair proportion of federal income taxes). With the passage of this legislation, the democrats will be assured of millions of additional voters who like this country for its benefits rather than liberties. The greatest legal objection to the immigration bill and Cornyn Amendment is that they propose amnesty without addressing immigration reform or ENFORCEMENT!! There is talk of securing the border, but only AFTER illegal immigrants are granted amnesty and immediate voting rights. Proponents of the bill try to divert attention from this fact by claiming that it is not an amnesty bill because it "has plenty of penalties and hurdles for those here illegally who seek citizenship."
For anyone who wants to understand the gravity and the likely consequences of this bill, just review what happened when the government tried this very thing back in 1986 under Ronald Reagan. To be clear, the 1986 Immigration Reform bill also offered the same "roadblocks" to citizenship. But the roadblocks were effectively in ink only.
The Reagan administration passed the 1986 Immigration Reform and Control Act to address the massive immigration of Hispanics. That law essentially told those in the US illegally that if they had arrived in the U.S. prior to 1982 and wanted to become citizens, all they had to do was simply raise their right hand.
The 1986 act didn't turn illegal immigrants into citizens on the spot. It granted temporary resident status only to those who could prove they had resided continuously in America for five years. After 18 months, their status could be upgraded to permanent residency, and only after another five years could they become U.S. citizens.
But advancement to citizenship was not automatic. Immigrants had to satisfy various requirements along the way. They had to pay application fees, learn to speak English, understand American civics, pass a medical exam and register for military selective service. Those with convictions for a felony or three misdemeanors were ineligible.
If these "roadblocks" sound familiar, that's because they are all in the current immigration bill. It's pretty much the same "penalties and hurdles" set forth by the Senate's Gang of Eight (including NY Chuck Schumer, John McCain, and Lindsey Graham) and the House's Gang of Eight. In their bill, they call it a "roadmap to citizenship." Ronald Reagan called it "amnesty."
The '86 reform bill also had supposedly "rigorous" border security and immigration law enforcement provisions. So how did that pan out? On the day Reagan signed "comprehensive" reform into law, only one thing changed: Millions of unlawful immigrants gained "legal" status. The promised crackdowns on security and enforcement never happened. Only amnesty prevailed.
Since the 1986 amnesty, the number of illegal immigrants has quadrupled. That should teach Congress a very important lesson: Amnesty "bends" the rule of law. And bending the rule of law to reach a "comprehensive" deal winds up provoking wholesale breaking of the law. Ultimately, it encourages millions more to risk entering the country illegally in the hope that one day they, too, might receive amnesty.
On legislation as important as this, lawmakers must take the time to read the bill, not rely on others' characterizations of what it says. We can't afford to have Congress once again "pass the bill to find out what's in it." And we can't have Republicans once again compromise on principles that define what it means to be a "constitutional republic."
The entire "Audit the IRS" rally can be viewed at: https://www.youtube.com/watch?v=qB8JLMJV_iM
Please contact your representatives in DC and let them know that you DEMAND a complete and comprehensive investigation into the conduct of the IRS and any other branches that potentially were used to harass and target conservative groups (such as Homeland Security and its Report on "Rightwing Extremism") and that you OPPOSE this type of irresponsible Immigration Reform.
For those who are not familiar with the immigration bill or Cornyn Amendment, it is probably one of the most important items that the Congress is taking up this year and it is worthy of at least a cursory review. This immigration initiative is a top priority of President Obama – now that Obamacare has been passed. Conservative talk show radio hosts such as Glenn Beck believe that this initiative is an attempt to increase the voter support for the Democratic party and to make sure that Republicans don't win another presidential election in the near future.
The Immigration bill was proposed by the Senate's "Gang of Eight" – John McCain, Lindsey Graham, Marco Rubio, Chuck Schumer, Mike Bennet, Dick Durbin, Jeff Flake, and Bob Menendez – and is more the attempt to deal with the 15-24 million illegal immigrants currently in this country (the 11 million figure that has been cited repeatedly by the government is simply a sharp under-representation). Ron Paul estimated the number of Illegals at 21 million back in 2008.
The "Gang of Eight" bill would allow undocumented immigrants to gain provisional status, which would let them remain in the country legally and work. It would later create a path to citizenship – first a green card and then eventual naturalization, but only if there are certain border security measures. That is, the bill would require the Department of Homeland Security submit a plan within 6 months of its adoption. In other words, under the Immigration bill, immigrants who are here illegally are given temporary legal status before the border security conditions are met, which, in essence, is amnesty.
The Cornyn Amendment was proposed by Senator John Cornyn (R-TX) to help the bill pass in the Senate by supposedly addressing some of the concerns of the Republican members. Cornyn promised that if his amendment was included, he would vote for the bill. The Cornyn Amendment, in its 134 pages, calls for enhanced US security and requires certain laws to be enforced more aggressively. The most notable addition is a requirement that DHS implement a biometric entry and exit program, but even there, the amendment only applies that requirement to air and sea ports of entry, but not land ports of entry. Moreover, it does not require the implementation of a biometric exit program at land ports of entry any time in the future. Furthermore, it requires no fencing or physical barrier along the southern border nor does it set any money aside to construct such fencing or barrier.
Despite its provisions, the Cornyn Amendment does nothing to alter the general spirit of the law, which is Amnesty first and then addressing border security maybe or at best, later on. Many are skeptical of the Amendment, claiming that it doesn't do enough to make the U.S. more secure. It uses weak, arbitrary benchmarks that can be manipulated by DHS and do not guarantee future security or enforcement. Additionally, it says nothing about new flows of illegal immigration. Under the Cornyn Amendment, there could still be a sizable number of illegal immigrants entering the U.S. every year, but DHS would still be able to certify that the border is secure, thus allowing LPR status to be given out. Despite these concerns, several GOP Senators have signed-on as co-sponsors to the Amendment, including Sens. Lamar Alexander (TN), John Barrasso (WY), Roy Blunt (MO), Richard Burr (NC), Saxby Chambliss (GA), Mike Crapo (ID), Orrin Hatch (UT), Johnny Isakson (GA), Mike Johanns (NE), Mark Kirk (IL), Rob Portman (OH), Pat Roberts (KS), and Roger Wicker (MS).
Amazingly, despite the fact that the Cornyn amendment still does not place a single obstacle in the way of illegal aliens gaining amnesty plus work and travel authorization, some Gang of Eight Senators are opposing it, calling the amendment a "poison pill" aimed at taking down the bill. John McCain, a gift to the Democratic Party, said: "It's not possible for us to support Senator Cornyn's amendment as it is presently written. It's a poison pill." Senator Schumer called it a "deal killer."
The National Review calls describes the proposed legislation as: "an amnesty-first, enforcement-maybe program drawn up mainly to reflect the priorities of 11 million citizens of other countries rather than the concerns of more than 300 million citizens of the United States." Needless to say, the National Review, as well as conservative leaders all over the country, have been urging Republican Senator Rubio to vote against the bill that he helped craft. (They know McCain and Graham are lost causes).
Today, GOP Senators John Hoeven (ND) and Bob Corker (TN) introduced a bi-partisan compromise amendment, hoping to ensure Senate passage of the immigration reform bill by increasing Republican support for it. The amendment would call for a border agent every 1,000 feet, every hour of every day, supported by 700 miles of fencing along the Mexican frontier. Furthermore, it would provide that no green cards be issued for the "11 million immigrants living illegally in America" until those steps and others to enhance border controls are taken. (Of course, it would take a couple of years to train and deploy the new agents in an expansion that would almost double the current force). The compromise amendment still doesn't address the fundamental flaw of the immigration reform effort, which is that it is an amnesty measure and not a security measure. Senator Jeff Sessions (R-AL) said the compromise means "amnesty will still occur" and Roy Beck, president of Numbers USA, a group that opposes the immigration reform measure, called the compromise "a desperate political move by pro-amnesty forces to provide cover to pass a bill that would otherwise not pass."
The Immigration Reform effort does nothing to address the serious concerns surrounding the massive immigration of low-skilled Hispanics over the past 20 years or so. For one, it will cost taxpayers hundreds of billions of dollars in welfare benefits. Granting amnesty to millions of low-skilled Hispanics sends the message that the United States only enforces immigration laws against those who are educated and can offer the country professional skills, something we are in need of. It also ensures that law-abiding American citizens will continue to suffer from unemployment and salaries will decrease. Speaking today on the Rush Limbaugh, Senator Ted Cruz (R-TX) said that the Senate immigration bill "sets up affirmative action – a strong preference in hiring – for those who are here illegally." Cruz argued that because illegal immigrants who are granted legal status would be exempt from Obamacare, it would be cheaper for employers to hire them than to hire native-born workers. "If you're a small-business owner," said Cruz, "if you hire an American or if you hire a legal immigrant, you're subject to a $2,000 dollar fine per employee if you're not providing health-care under Obamacare. It's a massive economic incentive for employers to not hire Americans."
The reform bill undermines our rule of law, is a slap in the face to everyone who entered the country legally and had to wait and follow the mandates of the law, continues to impress upon law-abiding American citizens that there is no such thing as "one set of laws for everyone," and will be an enormous drain on those who pay the bulk of taxes.
One must ask: "Shouldn't border security and upholding the immigration laws be a priority regardless of other immigration reforms?" Regrettably, the President and some in Congress seem to be treating security and upholding the law as an afterthought or a bargaining chip, not as one of the core purposes of government. In fact, the President appears to be intentionally ignoring his role as our head Enforcer and refuses to enforce the laws already on the books. We see this in sanctuary cities, we see this in repeat offenders who are here illegally being turned loose on the streets, we see this in the appeasement policy the current administration has with the President of Mexico and other Mexican authorities, and we see this in the refusal of government to enforce laws that make sure that illegal immigrants are not able to avail themselves of our welfare programs.
Before 1996, legal immigrants were eligible for public benefits on similar terms as citizens, while illegal immigrants were NOT eligible. The 1996 Welfare Reform Act, officially titled "The Personal Responsibility and Work Opportunity Reconciliation Act" (PRWORA), restricted access to TANF (Temporary Assistance for Needy Families), Medicaid, and SNAP for many legal immigrants. In other words, it was supposed to make it difficult for immigrants after 1996 to live as wards of the state and to burden law-abiding taxpayers. The 1996 law states that "self-sufficiency has been a basic principle of United States immigration law." In particular, it reads: "aliens within the Nation's borders should not depend on public resources to meet their needs," and "the availability of public benefits should not constitute an incentive for immigration to the United States" (U.S. Congress 1996). The Welfare Reform Act established two categories of immigrants for eligibility purposes (qualified and nonqualified immigrants) and restricted eligibility for qualified immigrants based on time of arrival into the United States (pre-enactment versus post-enactment immigrants), and length of U.S. residency (more than five years versus five years or less). Stated most generally, welfare reform allowed benefits for qualified immigrants, most of whom are legal permanent residents (LPRs), who arrived in the United States prior to the enactment of PRWORA (on August 22, 1996), and it restricted benefits for most immigrants who arrived after enactment for their first five years of qualified residency in the United States. As a result of these reforms, eligibility for public benefits can vary within families based on each family member's citizenship, immigration status, time of arrival, and length of residence in the United States.
Over the past 20 years, the foreign-born population in the United States has more than doubled. In the 20 years from 1990 to 2010, the population increased from 20 million in 1990 to 40 million in 2010 (US Census Bureau 2011). Immigrant families include nearly 17 million children, more than 15 million of whom are U.S.-born citizens. It is estimated that one in every 2 or 3 Hispanic immigrants is here illegally. While foreign-born adults have high employment rates and many do well economically, they are also more likely to work in low-wage jobs and less likely to have health insurance coverage from their employers than native-born adults. Several of our public assistance programs are available to them. Despite the instructions outlined in the 1996 Welfare Reform Act, several major public programs, including Medicaid and the Children's Health Insurance Program (CHIP), the Supplemental Nutrition Assistance Program (SNAP), and Temporary Assistance to Needy Families (TANF) are available to all low-income immigrants. The problem is that federal public benefits include a variety of "safety-net services" which can be paid for by federal funds But the welfare law's definition does not specify which particular programs are covered by the term, leaving that clarification to each federal benefit granting agency.
For anyone wanting to know what immigration to the United States was like when many European immigrants came here, look at the "Ellis Island and Immigration Experience" at http://freepages.family.rootsweb.ancestry.com/~gregkrenzelok/Ellis%20Island.html
The Immigration Reform bill, even including the amendments, does nothing to alter the fundamental truth that amnesty will be granted before any meaningful security measures are put in place. The bottom line is that this very same effort was tried once before and was a dismal failure. It sent the message to our neighboring countries and others around the world that the United States is not interested in taking any strong measures to effect a sensible immigration policy that furthers important national interests. Immigration has become political. Instead of a furthering important national interests, immigration is being used to further political interests.
One thing is certain: If we subsidize them, they will come. We have rolled out the social services red carpet, so it is no surprise that many from other countries are eager to come take advantage of our very generous system. The magnet used to be our unlimited freedom and a government that would leave people alone. Today that magnet is free stuff. Today that magnet is social pandering – in order to advance a progressive agenda and tear down traditional American norms. We must return to the Rule of Law and the American principle of personal responsibility. We must expect those who come here to respect our laws and to take care of themselves. Not only is this the right thing to do for our overtaxed citizens, but it sets a standard that should define all Americans, including those who have recently immigrated here. We simply have no choice. We can't afford our relaxed, "politically-correct" policies anymore.
Again, please contact your representatives in DC and let them know that you oppose any immigration reform effort that includes amnesty. The primary objective of immigration reform should be border security and enforcement of an immigration policy that serves legitimate national goals (and not political goals). And don't forget to demand an investigation of the IRS and Homeland Security.
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