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Friday, April 20, 2012

FairTax and the Constitution

Disclaimer

It is my intention to provide factual information about the serious conditions our country faces with the current tax system, and the solutions FairTax brings to the debate.  Also, to provide tools to those who wish to promote FairTax in their community.  Let it be understood, all content shown on this website is produced by me using data from sources believed to be truthful.  Any errors, oversights or misleading statements are purely by accident with no intention to misrepresent.  If incorrect information is found on this website, please bring it to my attention promptly along with substantiating data from a reliable source(s).

I hope you benefit from my efforts.   FairTax Dave

The Power to Tax 

There are only 3 places in the Constitution that address the laying and collecting of taxes.   Article I, Section 8, clause 1 identifies Duties, Imposts and Excises as the only targets of taxation.  We know they are the only approved targets because they are repeated in the sentence.  So what are they?  Duties are taxes on imported & exported products, Imposts are specific taxes on imported products only, and Excise taxes are assessed on products produced within the country.   Taxation takes place at easily controlled collection points such as Ports of Entry and domestic Manufacturers or Distributors of taxable products.  These are taxes on consumption, i.e. sales taxes at the production or distribution level that are passed onto the public without notification.  They are hidden taxes that are difficult if not impossible to remove.

Alexander Hamilton said...“There is no method of steering clear of this inconvenience [taxes], but by authorizing the national government to raise its own revenues in its own way. Imposts, excises, and, in general, all duties upon articles of consumption, may be compared to a fluid, which will, in time, find its level with the means of paying them. The amount to be contributed by each citizen will ,in a degree be at his own option, and can be regulated by an attention to his resources.”  

Of the 18 Enumerated Powers granted by the States to the federal government, the very first power is the power to tax.  This is not a coincidence.  After all, we fought a war against the best armed, best trained, best fed military of its time over taxes and our God given rights.

The Articles of Confederation severely limited the federal government to the point it could barely function.  Money is power, and the States had it.  The sharing of power was the topic of many a heated debate in Philadelphia in 1787.  After 6 years of existing under the Articles of Confederation it became clear a better way had to be found.  So, in the early months of 1787, 56 patriots met to form a more functional government.  Their first action was to determine if the Articles of Confederation could be salvaged through revision.  They decided to scrap it and create a new document.

The Constitution of the United States addressed the shortfalls of the Articles of Confederation by including Article II which established the Executive Branch.  Article I, Section 2 defined in greater detail the responsibilities of the House of Representatives.  Article I, Section 3 created the Senate comprised of two Senators from each State chosen by the State Legislature who held power over them.  This power was lost in 1913 by the ratification of the 17th amendment which changed the election of Senators to a popular vote in each State.  Article III established the Judicial Branch.  Finally, Article I, Section 8 described what could be taxed and Article I, Section 9 identified what could not be taxed.  For the first 125 years of our country (except 5 to 10 years during and after the Civil War) the federal government was funded by consumption taxes.
 
Article I, Section 9, clause 4 which is among the 8 powers not granted to the federal government restricts the power to tax.  "No Capitation or direct tax shall be laid,"  Capitation is described as "a tax upon a person" commonly known as a Head Tax or Poll Tax.  Clearly our founding fathers did not want any direct tax on the individual American citizen.  It was their belief that taxes on consumption would restrict the growth of the federal government, and increased tax revenue would be the result of a growing economy and country.  The greater the population, the greater the consumption, the greater the tax revenue.  Furthermore, personal taxes were viewed as a threat to personal freedoms.  Article I, Section 9, clause 4 was specifically placed in our Constitution to prevent politicians from perverting our government to gain power for themselves, and to protect our individual liberties.  ...bind him down from mischief...

Thomas Jefferson said... "In questions of power, then, let no more be heard of confidence in man, but bind him down from mischief by the chains of the Constitution.”         
     
FairTax is a consumption tax (but only at the retail level) that fully complies with the original Constitution and the intentions of our founding fathers.  Our current tax system required a constitutional amendment to be legal.  In fact, in 1894 an Income Tax was passed and signed into law.  The following year the Supreme Court declared it unconstitutional because it violated Article 1, Section 9, clause 4.  Our Constitution and the three branch system of checks and balances worked, but not for long.

My next entry will discuss the constitutional amendment ratified in 1913 that changed our country, our politics, our way of doing business, our lives and our privacy...and unleashed the destructive evils of greed and envy (otherwise known as Class Warfare) on our society.  Until then, may I suggest you read or re-read the Constitution and the Articles of Confederation.  Knowledge is power, know your history.