ABRAHAM LINCOLN, THE FEDERAL SALES TAX THAT ALMOST WAS
AND A STATE AND LOCAL TAX SOLUTION
A FEW FACTS ABOUT LINCOLN
Abraham Lincoln’s birthday is February 12th. Lincoln is celebrated as the president that successfully preserved the Union of the States and pushed for the elimination of slavery. Although the name of Lincoln is now spoken with reverence, it was the opposite throughout most of his Presidency.
He was an outsider. He served only one term in Congress, had almost no formal education, was self-educated, was not wealthy and had to support himself with a law practice in Springfield, Illinois. He was not part of the “accepted group” that controlled Congress for many years. On top of this, he was the leader during a war which was very unpopular even in the North.
After his election, the Salem Advocate, an Illinois newspaper, said:
“The illustrious Honest Old Abe has continued during the last week to make a fool of himself and to mortify and shame the intelligent people of this great nation…People now marvel how it came to pass that Mr. Lincoln should have been selected as the representative man of any party. His weak, wishy-washy, namby-pamby efforts, imbecile in matter, disgusting in manner, have made us the laughing stock of the whole world. The European powers will despise us because we have no better material out of which to make a President.”
Edward Everett, a former Governor of Massachusetts and famous orator, wrote in his diary: "He is evidently a person of very inferior cast of character, wholly unequal to the crisis." Congressman Charles Francis Adams, the son of President John Quincy Adams and grandson of John Adams, wrote, "His speeches have fallen like a wet blanket here. They put to flight all notions of greatness."
It was only in the last few months of his Presidency that Lincoln began to become more universally loved and respected. Of course, after his assassination, his actual greatness was acknowledged and respect for Lincoln has continued to grow.
LINCOLN AND TAX POLICY
Lincoln believed that he, as President, was charged to preserve the Union and ensure that the rights promised by the Declaration of Independence were protected for all future generations of Americans—regardless of the color of their skin or their ethnicity. To accomplish this, Lincoln did a number of things that were contrary to law. He abolished the right to Habeas Corpus (the right to be brought before a court to determine if you could be incarcerated) and allowed improper searches and seizures. He also proposed an income tax, even though many in his cabinet didn’t believe it was Constitutional.
In a famous exchange with then Chief Justice Roger Taney who was attacking his suspension of habeas corpus and other violations, “Are all the laws but one to go unexecuted, and the Government itself go to pieces lest that one be violated? Even in such a case, would not the official oath be broken if the Government should be overthrown when it was believed that disregarding the single law would tend to preserve it?”
Desperate for revenues to fund the Civil War, Lincoln signed The Revenue Act of 1861 on August 5, 1861. The bill taxed imports, land, and levied a tax of 3 percent on individual incomes over $800 (which, in current dollars, is about $18,000). The Revenue Act of 1862 created the Internal Revenue Service and levied the first progressive income tax on Americans. More brackets were added in 1864 and it was repealed in 1871. It is estimated that during the Civil War, 10% of Northern households voluntarily filed and paid the income tax. The same article pointed out that during the Civil War the inflation in the Northern states reached 80%.
Apparently, Lincoln didn’t seriously consider imposing a federal retail sales tax, a Constitutionally allowed excise tax, because there was no effective way to collect a federal sales tax on retail purchases.
It was not until nearly seventy years later in 1921 that West Virginia became the first state to institute a sales tax on new goods. A number of other states passed retail sales taxes and by 1947, the state sales tax became the largest source of state revenues.
THE FEDERAL RETAIL SALES TAX THAT ALMOST WAS ENACTED
In 1944, the U.S. almost got a federal retail sales tax. This was because even after income tax withholding was instituted in 1943, the revenues to the Treasury were still thought inadequate and no one felt that the people would tolerate increasing the income tax rates more.
An article posted by CQ Researcher stated, “Senator Byrd (D., Va.), Senator Taft (R., O.), Rep. Disney D., Okla.), and Rep. Knutson (R., Minn.), have recently expressed the opinion that no satisfactory alternative exists to the sales tax. Except for Doughton only one member of the House Ways and Means Committee—Rep. Gearhart (R., Calif.)—has recently spoken in opposition to the sales tax.”
“Advocates of the sales tax point out that a levy on retail sales would impose no burden on the taxpayer, aside from payment of the tax; that the payments would be made in small amounts, “almost painlessly”; that the tax would yield as much additional revenue as Congress is willing to assess at this time; that it would do more to curb inflation than all other tax proposals combined.”
The same article said that President Roosevelt had expressed his support for the federal sales tax but only as a way to help fund the war. The federal sales tax proposal was opposed by many labor unions.
David Bradford was a respected economics professor at Princeton and early supporter of consumption-based taxes who tragically died in a fire in 2005. When speaking with David in the 1990’s, he told me that there was a contingency plan at the Treasury developed in the event that there was a widespread refusal of employers to either withhold or remit withheld income/payroll taxes. The plan-- immediately institute a federal retail sales tax.
A SIMPLE STATE AND LOCAL TAX SOLUTION
Governor Cuomo of New York is blaming the $42 billion reduction in New York revenue collection on the state and local tax (“SALT”) limitation of $10,000. He is scheduled to meet with President Trump to urge him to increase the SALT deduction.
In 2015, the SALT deduction totaled $553 billion. Over $240 billion of this amount was from California, New York, New Jersey and Illinois. A person who is paying $100,000 in SALT is only able to deduct $10,000 and must pay approximately 30% of $90,000 or $27,000 in additional taxes under the new law.
To these people, contributing $25,000 to a group that is lobbying to repeal the SALT limit of $10,000 will be a good investment because they would get this money back in one year if the SALT limit is repealed. Multiply this $25,000 by 1,000 similarly situated people and you have $25,000,000 that can go to lobbyists and be shared with Members of Congress. The true amount will likely be many times the $25,000,000, but that is an example.
If the debate continues for several years, then more and more money is extorted by D.C. This illustrates again why the Swamp so fiercely opposes the FAIRtax. Rather than being at the mercy of the Swamp, the SALT deduction and other deductions that allow people to pay less income tax will no longer be necessary.
Under the FAIRtax, each person will receive their entire earnings, not diminished by any federal income tax withholding. Then when each person purchases new retail goods and retail services, the FAIRtax will be payable. However, payments of taxes to the states and local governments are not subject to the FAIRtax.
Instead of begging for some money back, all of us can pay our state and local taxes with 100% of our earnings not reduced by federal withholding.
CONCLUSION
As Lincoln said, “America will never be destroyed from the outside. If we falter and lose our freedoms, it will be because we destroyed ourselves.”
If we continue to let the Swamp play their games of pitting us against each other solely for their profit and our loss, then we will continue on the way to destroying ourselves. We can change who is the master and who is the subject. We can start by eliminating the income/payroll tax system that benefits only the Swamp and replace it with the FAIRtax!
Isn’t it time to take back control from D.C.?
President Trump, “Embrace the FAIRtax and real tax reform! What have you got to lose?”
It is time to PASS THE FAIRTAX!
The truth is the truth. Remember, if we don't continue to tell the truth and demand a change, then this quote from George Orwell's 1984 may foretell our children's future:
“If you want a picture of the future, imagine a boot stamping on a human face—forever.”
WHAT CAN EACH OF US DO
- I am sure that Representative ____ or Senator ____ is in favor of everyone obeying the income tax laws.
- After they assure you that their boss is not in favor of anyone breaking the law, ask if they are aware of the Cebula study showing $9 trillion of evaded income/payroll taxes over the next ten years.
- Since most will say they don’t believe their boss has seen the study, either drop off a copy or get an email address and send a copy to them for their boss.
- Say you are going to call back in a week and ask what the Representative or Senator is going to do to stop this evasion.
- In a week, call back and ask specifically what the Representative or Senator is going to do to enforce the law.
- They probably will say their boss believes that simplifying the income tax will handle the problem.
- Explain that when people evade income taxes, they are also evading the 15.3% payroll/Medicare tax and state income tax. So it is unlikely that they are going to pay 30% or 40% when they were paying 0% because they have already decided it is okay to cheat.
- Say that the only way to reduce evasion is to increase by tens or hundreds of thousands the number of comprehensive IRS audits done each year.
- Point out that Evaders do not self-identify by putting an “E” on their income tax return.
- 80% of the people likely to be audited are trying to comply, but they will be forced to endure these IRS audits as well.
- Ask if the Member is in favor of this?
- If they say no, then ask again how the Member proposes to stop people breaking the income tax laws.
- Then explain that the way to handle evasion without unleashing the IRS audits is the FAIRtax.
If you can see your Member or attend a town hall and ask these questions, you can be even more effective.
FAIRTAX POWER RADIO
#147 Back to Basics with the Red Book
If you had a letter signed by 76 professionals endorsing a product, would that make an impact on you?
The FAIRtax Guys use the open letter in the introduction of the second (Red covered) FAIRtax book by Boortz and Linder to help make the case for the FAIRtax. In this letter, a number of the many benefits of the FAIRtax are listed and discussed. The FAIRtax Guys use this episode to expand on these benefits as pointed out by these professional economists.
Listen and gather more ammunition in your arsenal of facts supporting the FAIRtax. The more you learn about the FAIRtax, the more able you are to make the case for the FAIRtax. And you are a very important soldier in the battle for REAL tax reform for our country.
Please listen and enjoy.
If you believe the FAIRtax is good for America, let others know by turning them onto FAIRtax Power Radio - the ONLY weekly FAIRtax digital TV show in the country! Watch every Wednesday at 11:30 AM (ET). We are streaming to Facebook LIVE (www.facebook.com/fairtax). If you’re not a fan of Facebook, you can watch the show on www.xcluded.tv at the same broadcast time - or any time.
FTPR podcasts for each show are posted on Spreaker (http://bit.ly/2oesbk7), iTunes & iHeart Radio every Friday morning. A free FAIRtax Power Radio app is available for iOS and Android. Since it’s a podcast, you can download it and play it whenever it’s convenient for you.
The FTPR weekly episodes are shared to a number of Facebook pages:
- FAIRtax Official (https://www.facebook.com/FairTax/)
- The FAIRtax Guys (https://www.facebook.com/thefairtaxguys/)
- Democrats for FAIRtax (https://www.facebook.com/DemocratsForFairTax/)
- and many others
www.xcluded.tv is a subscription based site which costs $30 per year and features a number of other shows along with FTPR with no commercial interruption.
Please help us educate as many Americans about the FAIRtax as possible. Be sure to tell everyone you know about this great new format for FAIRtax Power Radio. Whether you watch the weekly video or listen to the weekly podcast, this is a great way for more Americans to learn about the best tax reform plan in Congress at this time.
Tune into our video broadcast each Wednesday. Or, if you prefer, you can listen to the podcast of the show later. You can listen to FTPR on any platform - Mac or PC, iPhone or Android. And it’s 100% free. Listen on Spreaker.com (http://bit.ly/2oesbk7), iTunes (http://apple.co/1Te8VdF) or iHeart Radio (http://bit.ly/2eqEG7y) on your computer or smartphone. The easiest way to listen to FTPR on your smartphone is by downloading the free FTPR app. Just search for “FAIRtax Power Radio” in your app store, download the app and start listening.
Remember, FTPR digital TV every Wednesday at 11:30 AM (ET) followed by the podcast on Friday morning. Please listen and tell everyone you know about the FAIRtax Power Radio. The FAIRtax: Once You Understand It, You’ll Demand It!
A SIMPLE INTRO TO THE FAIRTAX - AMERICA’S BIG SOLUTION
America’s Big Solution provides a starting point in your study of the FAIRtax and is meant for people of any age. And you can download it to your tablet or smartphone right now. It’s also available in print form. See below.
Do you know someone who would like an introduction to the FAIRtax and would prefer to read about it in a booklet rather than search online for Tweets, Posts and Shares? If so, America’s Big Solution is their best choice.
America’s Big Solution is an introduction to the FAIRtax written by Terry Tibbetts, author of A Spartan Game: The Life and Loss of Don Holleder, with help from Ron Maiellaro, President of the Florida FAIRtax Educational Association.
You can buy an electronic version of ABS as follows: AMERICA’S BIG SOLUTION is available for only $2.99 for the Amazon Kindle (http://amzn.to/1WIRHry), the Barnes & Noble Nook (http://bit.ly/1XeG8bH) and Apple iOS (http://apple.co/1tnqK0P).
You can purchase a print copy at the same Amazon link above for $9.25. Regardless of whether you choose the electronic format or the print format, you’ll find AMERICA’S BIG SOLUTION will give someone the boost they need to begin their study of the FAIRtax and the suggested resources to learn more. Buy AMERICA’S BIG SOLUTION now!
LINKS TO MORE INFORMATION
These links will help you promote and support the FAIRtax, make yourself familiar with the links below. We always do our best to keep our AFFT community up to date, and you can stay ahead of the curve using these convenient sites.
- The website of Americans for Fair Taxation (www.fairtax.org)
- Read the Summary of the Evasion Study
- Welcome to the Online FAIRtax Community (member.fairtax.org)
- The website at which you can help make it happen (bigsolution.org)
- The Facebook page for Americans for Fair Taxation
- The Facebook page for The FAIRtax Guys
- The Twitter page for Americans for Fair Taxation
- YouTube channel for AFFT
- YouTube channel for The FAIRtax Guys
- The Official FAIRtax Logo Store (www.fairtaxlogostore.org)
- www.xcluded.tv - A new platform for FAIRtax Power Radio Video and other shows
- POPVOX - Make your FAIRtax voice heard on this national self-survey platform
Thank You for Opening The FAIRtax Chronicles, Our Sponsored Mailings
We plan to do several of these mailings each month. If you take a minute to open the sponsored emails and click through to the website, you are making an in kind contribution to AFFT. It is not required to actually make a purchase, but your minute of time will ensure that AFFT is paid ever larger amounts from people paying for us to send their offers to our supporters.
Again, we are making every effort to ensure that we work with only reputable companies. If you feel that any FAIRtax-sponsored email is objectionable, please email us at info@fairtax.org and tell us why. You can also opt to not receive these sponsored email messages but still receive FAIRtax emails.
Thank you for staying FAIRtax strong!