Monday, January 7, 2013

Regarding Tax reform , a movement to abolish the IRS and replace the Agency with a consumption tax has been refloated......considering the fancy foot moves of the rich , this could be a more equitable way to raise money as we know the rich will spend ! Get rid of the IRS infrastructure , the armies of tax lawyers and lobbyists for the rich - everyone just pays the same consumption tax on new purchases....


http://www.infowars.com/if-obama-can-just-create-a-trillion-dollar-coin-then-why-do-we-have-to-pay-taxes/


If Obama Can Just Create A Trillion Dollar Coin, Then Why Do We Have To Pay Taxes?

  •  The Alex Jones ChannelAlex Jones Show podcastPrison Planet TVInfowars.com TwitterAlex Jones' FacebookInfowars store
Michael Snyder
Economic Collapse
Jan 8, 2013
If Barack Obama can “solve” the debt ceiling crisis by printing up some trillion dollar coins, then why does the federal government need our money?  As another debt ceiling showdown approaches, many in the liberal media are suggesting that if Congress does not raise the debt ceiling that Obama should just have the U.S. Treasury create a trillion dollar platinum coin and use it to pay our bills.  It sounds crazy, but many notable voices (including Paul Krugman of the New York Times) are supporting this idea.  But if the federal government has had the power to create trillion dollar coins out of thin air all this time, then why do we have to pay taxes?  Not only that, why do we have a national debt?  If the federal government can just create money whenever it wants, then why does the federal government ever have to borrow it from others?  The U.S. Constitution actually grants Congress the power to “coin money”, so why is the Federal Reserve doing it?  Those are some very important questions.  Most Americans don’t even realize that the U.S. government never actually needed to borrow a single penny from anyone else.  The U.S. Congress has the authority to create debt-free money whenever it wants to.  Conceivably, the entire federal government could be funded without ever borrowing a single dollar and without ever receiving a single dollar from any of us in taxes.  Just imagine that – a nation without a single penny of national debt, no income tax and no IRS.  What a wonderful world that would be.  Of course there would be other potential dangers under such a system (such as runaway inflation), and those dangers would have to be addressed.  But the truth is that we don’t have to have an income tax or 16 trillion dollars of government debt.  We only have those things because we have chosen to have those things.
Sometimes, a crisis can illuminate options that most people had not considered previously.  As another debt ceiling crisis draws closer, many are looking for ways for the U.S. government to be able to continue to pay its bills if Congress does not authorize an increase in the debt ceiling.
If a debt ceiling agreement is not worked out, the U.S. government will soon only be able to pay about half the bills that are coming due after interest payments on the national debt (which will almost certainly be prioritized) are made.
That is why a lot of people on the left are pushing the “trillion dollar coin” alternative.  So how would this work exactly?  The mechanics were recently explained by Jim Pethokoukis on his American Enterprise Institute blog
There are limits on how much paper money the U.S. can circulate and rules that govern coinage on gold, silver, and copper.  BUT, the Treasury has broad discretion on coins made from platinum.  The theory goes that the U.S. Mint would create a handful of trillion dollar (or more) platinum coins.  The President would then order the coins deposited at the Fed, who would then put the coin(s) in the Treasury who now can pay all their bills and a default is removed from the equation.  The effects on the currency market and inflation are unclear, to say the least.
In my opinion, if anyone in the federal government is going to be creating money out of thin air, it should be the U.S. Congress.  After all, according to Article I, Section 8 of the U.S. Constitution, it is the U.S. Congress that has been granted the authority to “coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures”.
But those that are pushing Obama to create a “trillion dollar coin” point to a law that Congress passed that allows the U.S. Treasury to mint platinum coins.  The following is from a recent CNN article
Normally, the Federal Reserve is charged with issuing currency. But U.S. law, specifically 31 USC § 5112, also grants Treasury permission to “mint and issue platinum bullion coins and proof platinum coins.”
This section of law was meant to allow for the printing of commemorative coins and the like. But the Treasury Secretary has the authority to mint these coins in any denomination he or she sees fit.
But it wouldn’t quite be that easy.  According to a recent ABC News article, some elements of the coin design would have to be determined by legislation…
The more difficult part comes sometime after the decision is made to coin the platinum and before the Mint gets to work in sculpting the pieces.
At that point, the American people must decide whose face will adorn the trillion dollar trinket. The process to determine the “specs” of the coin, U.S. Mint Public Affairs Specialist Genevieve Billia warns, must be “determined by legislation,” creating the potential for another congressional impasse.
So we would likely end up back at square one.
But if printing up a “trillion dollar coin” does not work out, Paul Krugman of the New York Times has come up with another option
Don’t like the platinum coin option? Here’s a functionally equivalent alternative: have the Treasury sell pieces of paper labeled “moral obligation coupons”, which declare the intention of the government to redeem these coupons at face value in one year.
It should be clearly stated on the coupons that the government has no, repeat no, legal obligation to pay anything at all; you see, they’re not debt, and therefore don’t count against the debt limit. But that shouldn’t keep them from having substantial market value.
Of course there is a very, very low probability that any of these wild ideas will ever be tried, but this debate has raised some very interesting points.
The truth is that we do not have to have a system where more money is only created when more debt is created.  We could have a system where the federal government directly creates debt-free money that is spent directly into circulation by the federal government.
In fact, this has happened before.
As I have written about previously, during the presidency of JFK a limited number of debt-free United States Notes were issued by the U.S. Treasury and spent by the U.S. government directly into circulation without any new debt being created.  In fact, each bill said “United States Note” right at the top.
Unfortunately, after JFK’s presidency no more debt-free United States Notes were ever issued.
But even before JFK, there were times when debt-free United States Notes were being used.  According to Wikipedia, United States Notes were first used during the Civil War….
They were originally issued directly into circulation by the U.S. Treasury to pay expenses incurred by the Union during the American Civil War. Over the next century, the legislation governing these notes was modified many times and numerous versions have been issued by the Treasury.
So why are we using debt-based Federal Reserve Notes today instead of debt-free United States Notes?
If the Federal Reserve did not exist and the U.S. government directly created money instead of borrowing it, it is conceivable that we could have a national debt of $0.00 today instead of $16,432,707,263,449.56.


Which option do you think our children and our grandchildren will wish that we had opted for?
In a system where the government directly created money, it is also conceivable that we could completely do away with the income tax and the IRS completely.  The U.S. once prospered greatly without an income tax, and it could do so again.
And the truth is that our system of taxation is broken beyond repair.  If you doubt this, just read this article.
So what would the downside be to such a system?  Well, of course rampant inflation would be a huge danger.  Allowing Congress to print up money whenever they wanted to would be playing with fire.  That is why it would be imperative for there to be a hard cap on what the federal government could spend.  For example, you could set the cap on spending by the federal government at 20 percent of GDP.  That way we would hopefully never end up looking like the Weimar Republic.
And the current federal debt could be paid down a little at a time using newly created debt-free currency.  This would have to be done slowly to keep inflation under control, but it could be done.
Of course if you wanted to continue to fund the federal government through taxation, there are other options that would still allow you to do away with the income tax.  For example, one of the ways that our founders intended for the federal government to be funded was through tariffs, and we could definitely raise a lot of money that way.  Plus, that would have the added benefit of making American companies much more competitive again and it would reduce the flow of American jobsout of the country.
So am I in favor of having Barack Obama create a trillion dollar coin to get around the debt ceiling crisis?
Most definitely not.  If it does not violate the letter of the Constitution (which I believe it does), it sure does violate the spirit of it.
But if the U.S. Congress decided to shut down the Federal Reserve and the IRS and they decided to abolish the income tax, and instead they started directly issuing debt-free currency directly into circulation, that is something I would very much be in favor of.
Yes, that system would not be perfect either, but it would be far more preferable to what we have today.
So what do you think?  Should we keep our current system of debt-based money, or would a system of debt-free money be better?
Please feel free to post a comment with your opinion below…
 








http://thehill.com/blogs/floor-action/house/275697-house-gop-seeks-to-abolish-irs-replace-income-tax-with-consumption-tax#.UOnpPaZFcnE.twitter#ixzz2HKR7Q6w4


House GOP seeks to abolish IRS, replace income tax with consumption tax

By Pete Kasperowicz 01/04/13 03:34 PM ET
Fifty-four House Republicans on Thursday reintroduced legislation that would terminate the IRS and replace the system of income taxes on people and corporations with a consumption tax.

The FairTax Act, from Rep. Rob Woodall (R-Ga.), would abolish the 16th Amendment, which was ratified 100 years ago this February. That amendment gives Congress the power to impose income taxes without having to spend the revenues evenly among the states.
Woodall's bill, H.R. 25, would replace the current tax system with a 23 percent consumption tax on all new goods and services. He said Thursday that this change would eliminate the need for a complicated tax code, and would be the kind of tax reform that helps reinvigorate the economy.


"The momentum is building for fundamental tax reform, and it's fueled by the American people," he said. "By passing the FairTax, Congress can shield middle-class Americans from the burden of the payroll tax, the largest tax burden that most American families bear.

"The FairTax would make it easier for businesses to grow and hire new workers by abolishing America's corporate income tax, currently the highest in the world."

Woodall argues that eliminating the corporate income tax would give companies an incentive to repatriate billions of dollars from overseas that would be subject to taxes under current law.

Specifically, the bill would repeal the payroll tax, individual and corporate income taxes, the self-employment tax, and estate and gift taxes.

It would be replaced with a 23 percent consumption tax that people living at or below the poverty rate would not have to pay. The bill would require a "probate" to be paid to all residents that is equal to the consumption tax the poor would normally pay, thus sparing them from taxes completely.

Among the 53 Republican co-sponsors are House Financial Services Committee Chairman Jeb Hensarling (R-Texas) and Oversight and Government Reform Committee Chairman Darrell Issa (R-Calif.).


The 112th Congress ended with 70 co-sponsors for Woodall's last version of his FairTax bill.



and........


http://beforeitsnews.com/economics-and-politics/2013/01/house-gop-seeks-to-abolish-irs-replace-income-tax-with-consumption-tax-2448496.html


I love the idea of Ending the Fed, shutting down the IRS, ruling federal income taxes to be unconstitutional, again! (Hello, Pollock v. Farmers’ Loan and Trust Co, circa 1894!).  But if we’re going to champion a cause, let’s not dress as liars to better sell the message. Before 1913, no one paid FEDERAL Income Tax, but the statement “Americans kept 100% of their earnings” is misleading. It makes it sound as if we paid ZERO income tax across the board, both state and federal.  Although there was a rapid increase in state taxation in 1913 after the passage of the 16th amendment, states have had a long history of imposing income and income-like taxes on citizens since the creation of this republic.  Also, in order to pay off some of our war debt, we had short periods of imposed income tax, although it was low and only imposed on the rich (relatively rich), it still happened a few times in our history before 1913, but it was overturned a few times. Still, some of those tax dollars helped pay off war debt that we incurred while fighting and winning some of these wars. I don’t agree that taxation was the best way around this war debt and neither did Lincoln, who tried to issue Greenbacks instead of levying a tax. [insert conspiracy theory here]. I’m all for abolishing income taxes, at least on a federal level, and controlling the spending and debt that Congress incurs due to having access to so much money, but let’s be honest about the history on which we rely on to win the debate.  @Suga_Shane

A new bill has been introduced in Congress by Republican Representative Rob Woodall from Georgia that would abolish the IRS and replace it with a ‘consumption tax’. As someone who is completely against any attempt by the government to extort and rob Americans of their hard earned wages, I think that this will be a HUGE step in the right direction. Let those who consume the most pay the most; meanwhile, protect those people who choose not to ‘consume’. The IRS is a TOTAL SCAM and attempting to force Americans to pay money to them is nothing less than criminal. DEFUND THEM!!!! The story below from The Hill.


Fifty-four House Republicans on Thursday reintroduced legislation that would terminate the IRS and replace the system of income taxes on people and corporations with a consumption tax.
The FairTax Act, from Rep. Rob Woodall (R-Ga.), would abolish the 16th Amendment, which was ratified 100 years ago this February. That amendment gives Congress the power to impose income taxes without having to spend the revenues evenly among the states.

Woodall’s bill, H.R. 25, would replace the current tax system with a 23 percent consumption tax on all new goods and services. He said Thursday that this change would eliminate the need for a complicated tax code, and would be the kind of tax reform that helps reinvigorate the economy.


No comments:

Post a Comment