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Date: Wed, 16 Jul 1997 12:41:50 -0700
To: (Recipient list suppressed)
From: Paul Andrew Mitchell [address in tool bar]
Subject: SLS: An All-American Tax System (fwd)

>July 14, 1997
>These are truly the dog days of the Republican Party.
>Successive national tickets have been defeated by Bill Clinton as 
>convincingly as the GOP Congress has been cowed. If the incoming mail of 
>one writer on public affairs is a reliable barometer of public sentiment, 
>the party is in trouble-for that mail is full of anger, despair and 
>derision for the Republican leadership.
>To endure, a great party must be more than a line on a ballot or a vehicle 
>for advancement. It must embody people's hopes. It must be, and be seen as, 
>the vessel of a cause larger than itself. With the Cold War over, what is 
>the great cause of the Grand Old Party?
>If that cause is to stand for lower taxes, and smaller, less intrusive 
>government, it is time to revisit an idea broached here years ago: 
>replacement of the U.S. income tax with a national sales tax. What would a 
>national sales tax (NST) -- already adopted by Rep.  Bill Archer, chairman 
>of the House Ways and Means Committee- accomplish? It would:
>* End, in one stroke, all federal taxation of salaries, wages,
>dividends, interest, gifts, estates and capital gains.
>* Eliminate all federal income tax forms, saving 5.4 billion work hours 
>spent each year filling them out.
>* Shift the U.S. tax burden off work, savings and investment onto 
>consumption-as economists have urged for years.
>* Eliminate the Internal Revenue Service.
>* Tax the "cash economy" and "underground economy" for the first time. All 
>present tax evaders-from tourists to tax cheats, from illegal aliens to 
>organized crime-would become U.S. taxpayers, chipping in, like the rest of 
>us, every time they spent a dollar.
>* Eliminate the need for hundreds of thousands of accountants, bookkeepers, 
>tax lawyers and trust lawyers, turning them loose for more productive work 
>than exploring the U.S. tax code for loopholes.
>* Eliminate thousands of lobbyists now prowling the nation's capital for 
>special tax breaks for their industries or corporations.
>A shift to an national sales tax would also have a dramatically favorable 
>impact on the U.S. trade deficit. An NST of 15 percent would end the 
>scandalous tax evasion by foreign corporations, putting U.S. goods on a 
>level playing field with imports. Moreover, eliminating income and 
>corporate taxes from the sticker price of U.S.  products would strengthen 
>America's competitive position in world markets.
>With all federal taxes on income and investment lifted, wealth would pour 
>into the United States. Foreign corporations would move here.  Wealthy 
>foreigners would stampede to make America their official residence for tax 
>purposes. U.S. citizens who have moved their money abroad to evade income 
>or estate taxes would come scurrying home.
>America would become the world's greatest enterprise zone!
>In the great GOP debate, between advocates of a flat tax and advocates of 
>NST, the latter seem to this writer to have much the stronger case, for the 
>flat tax has several fatal flaws.
>First, a flat tax of 17 percent on all incomes above $35,000 would give the 
>scores of millions of Americans earning less than $35,000 no incentive to 
>cut federal spending and every incentive to increase it.
>Second, since all capital gains and dividends go untaxed under a flat tax, 
>the idle rich and the David Rockefellers, Warren Buffetts and their heirs 
>would never pay a dime, though their employees would pay 17 percent a year. 
>This exemption for coupon-clippers and trust-fund babies will never pass 
>muster with Congress or the country.
>The strongest argument against an NST has been that, under it, the poor, 
>working poor and elderly living only on Social Security, who pay no income 
>tax, would get a sharp tax hike-since all their income is spent. But the 
>wealthiest Americans, who are taxed today at near 40 percent of income, 
>would get a hefty tax cut.
>GOP Reps. Billy Tauzin and Dan Schaefer propose a way around this 
>formidable obstacle. Under their NST, food, clothing and shelter are 
>exempt, and the poor and working poor are made whole with rebates.
>As Rep. Tauzin argues, the U.S. income tax does not need to be reformed-it 
>needs to be pulled up by its roots. No system will satisfy all, and none is 
>perfect, but the NST seems to be the best of all possible worlds.
>It eliminates the IRS. It ensures that everyone pays-but only when we 
>consume, not when we earn, save or invest. Tax evaders would now pony up, 
>like everyone else. Imports would carry the same taxes as U.S.-made goods. 
>Exports would go untaxed.
>Everyone would contribute to the national defense and all the other 
>necessary duties of government, which is as it should be. In a democratic 
>republic, there should be no freeloaders.
>The NST-call it "America's tax code"!
>copyright Patrick J. Buchanan 1997
>(o?o)    Dean Howard Stanton    (o?o)
>subscribe:		mailto:deanstan@cybertron.com
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Paul Andrew Mitchell                 : Counselor at Law, federal witness
B.A., Political Science, UCLA;  M.S., Public Administration, U.C. Irvine

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