With a debt over 14 Trillion dollars, yes I said 14 Trillion, Now 14 Trillion looks like this… $14,000,000,000,000, leaves you with the question “Where do you start?” In my humble opinion you start with the Federal Tax Code. The KEY to taking back our country is getting control of our money.
Tackling the Federal Tax Code is actually very simple. You SCRAP the existing system. The current Federal Tax Code is over 64,000 pages thick and is full of corruption and it needs to be REPLACED with a new Federal Tax Code that I believe should be what is commonly known as a Value Added Tax (VAT). I prefer to call it what it is a National Sales Tax. Now this is not a new idea but I believe it could be the answer to our dysfunctional tax code.
The National Sales Tax will replace ALL Federal Taxes, Fees and any revenue enhancement programs excluding Social Security and Medicare/Medicaid. Social Security and Medicare/Medicaid has to be addressed separately which I will go into at another time.
So how will this National Sales Tax work?
The National Sale Tax
The National Sales Tax (NST) should have a range between 1% to 5% at the point of sale with NO EXCEPTIONS and NO EXCLUSIONS. I suggest a 5% NST. For example let’s use that ear of corn you just bought at the grocery store as an example.
When the Farmer bought the seed, fertilizer, herbicide, etc. that he would need to plant his corn crop he would pay a 5% NST.
After the corn is harvested the Wholesaler would pay a 5% NST on the Farmer’s corn crop.
When the Grocery Store Chain buy’s a supply of corn from the Wholesaler they would pay a 5% NST.
That ear of corn you picked out in the produce section of the Grocery Store you will pay a 5% NST.
Of course all the NST paid by the Farmer, Wholesaler and Grocery Store Chain may be included in the price you pay for that ear of corn. You may ask, “Is that right?” The answer is yes.
All of the actual or estimated taxes that the Farmer, Wholesaler and Grocery Store Chain will pay under the current Federal Tax Code are included in the price of that ear of corn. So nothing will change when it comes to passing the cost of doing business.
What will the NST apply to?
The NST applies to all aspects of the U.S. economy. Which means it will apply to agriculture, industry, finance, service, investments, energy, etc., remember I said NO EXCEPTIONS and NO EXCLUSIONS. For example it will apply to Houses, Cars, Bubble Gum, Insurance Policy’s, Lawyer Fees, Gasoline, Food, Medicine, Stocks, Doctor Bill’s, etc. Do you get the picture now?
What is the advantage of the NST over a Flat Tax or the Fair Tax?
As stated above the NST will not exceed 5% at all levels of purchase and applies to all sales without exception. Your income is NOT TAXED!
The Flat Tax of 10% to 20%, which ever rate they decide on will still tax your income and require you to file a return every year just like you do now. Most if not all of the exceptions are eliminated. Check the following link for more information.
The Fair Tax resembles the NST because it does tax you when you buy something. The problem with the Fair Tax is that it will tax you about 25% at the retail level and will have some exceptions and exclusions. Check the following link for more information.
How do we keep Congress from raising the NST rate or creating new taxes?
We all know that Congress will do their best to raise the NST rate or will create new taxes weather we like it or not so they can spend more money on their pet projects. How do we stop it? It will take a Constitutional Amendment to guarantee that Congress will not pervert the NST.
What will this Constitutional Amendment look like?
1. Repeal the 16th Amendment.
2. The NST will not exceed 5% without a National Referendum. There are two exceptions to this rule.
Exception 1: In case of a Natural Disaster Congress can enact up to a 1% increase in the NST above the 5% limit until either the public infrastructure that was damaged is replaced and paid for or it is approved by the voters on the next first Tuesday in November in a National Referendum with 60% of the vote or more.
Exception 2: In case of a Declared War by Congress, Congress can enact up to a 1% increase in the NST above the 5% limit until either the War is over and paid for or it is approved by the voters on the next first Tuesday in November in a National Referendum with 60% of the vote or more.
3. Congress CANNOT increase the NST above 5% without the prior approval of the public through a National Referendum requiring 60% of the vote or more. All increases will be limited to 1% without exception.
4. Any increase in the NST above the 5% limit CANNOT exceed 5 years. The public must re-approve the previous NST increase in a National Referendum requiring 60% of the vote or more.
5. The President will have the power of a Budget Line-Item-Veto.
6. Congress MUST maintain a Balanced Budget.
7. All Budget Deficits must be balanced with Spending Cuts.
8. All Budget Surpluses must be applied to the National Debt or in case the National Debt has been paid then it must be refunded to the citizens (above 18 years old) of the United States of America equally.
This new Constitutional Amendment if passed will Fundamentally Change the way our Federal Government works. It will literally take most of the power of taxation away from Congress and give it back to “The People”. Think about that for a minute. You will through a “National Referendum” for the first time in our history have control over your tax money.
I firmly believe that this proposed Federal Tax Code will bring in the revenue to help balance our budget along with spending cuts. I also believe that this new Federal Tax Code will allow business's to bring manufactoring back to the USA!
We must elect people who will truly reform our Federal Government.