03/16 11:03 Republicans revive bid to scrap U.S. tax code

WASHINGTON, March 16 (Reuters) - Republican lawmakers revived legislation on Tuesday to scrap the existing U.S. tax code, capitalizing on public frustration with the system.

Sen. Tim Hutchinson of Arkansas and Rep. Steve Largent of Oklahoma said the "Tax Code Termination Act" would eliminate the existing code and direct the Republican-controlled Congress to enact a "fairer and simpler" system by Dec. 31, 2003.

A similar measure was approved by the House of Representatives in June 1998, but stalled in the Senate.

Democratic leaders in Congress and the Clinton administration opposed the measure in 1998, saying it would create uncertainty for businesses and families. They were expected to fight against it again this year.

In a statement Hutchinson said the existing tax code was "monstrous," and that his legislation would "focus on the need for fundamental tax reform."

A spokeswoman for Hutchinson said Sen. Larry Craig of Idaho, a member of the Republican leadership, and 18 other lawmakers would co-sponsor the Senate bill. In the House the measure has more than 100 co-sponsors.

Republican leaders have made tax policy the centerpiece of their post-impeachment agenda even though Democrats point to polls showing Americans are more interested in bolstering Social Security and Medicare.

But Republicans have not arrived at a consensus over what type of tax system should be enacted.

House Republican Leader Dick Armey of Texas introduced legislation to replace the current tax system with a flat 17 percent tax on all income.

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"direct the Republican-controlled Congress to enact a "fairer and simpler" system by Dec. 31, 2003. "

Might be a lot sooner than this !!

Ray

-- Ray (ray@totacc.com), March 16, 1999

Answers

My vote - dump the IRS and go with a national sales tax! If you don't spend, you don't get taxed. Also a good way to fix the IRS Y2K problem! <:)=

-- Sysman (y2kboard@yahoo.com), March 16, 1999.

Existing tax code (IRS -- income tax) is not applicable to most of you -- employees, independent businessmen, professionals, investors. No changes necessary. The tax code is for taxpayers -- people subject to and liable for a given tax. Most of us are NOT subject to and liable for the income tax.

http://www.goodbiz.com/tbks/
or
http://goodbiz.com/tbks/

-- A (A@AisA.com), March 16, 1999.

Sales tax pretty much solves all problems. The only kicker is that you would need to constitutionally prohibit income tax at the same time, otherwise you'd just end up with two parallel tax systems as in Europe/Great Britain.

-- Puddintame (dit@dot.com), March 16, 1999.

Is it possible that congress KNOWS that the IRS will not be compliant in time????????

Ray

-- Ray (ray@totacc.com), March 16, 1999.

The way I see it, a sales tax might hamper spending on discretionary items, and we could see black markets for certain things emerging as a result. For example, Michigan has a heavy tax on cigarettes. I don't smoke, but I know of people who will drive to Indiana just to buy cigarettes! Of course, if the troopers pull them over and find numerous cartons of cigarettes stowed, they're busted :-)

Would a flat tax be a better solution?

-- Tim (pixmo@pixelquest.com), March 16, 1999.

Hmmmn. Interesting timing, isn't it Ray?

May be (most likely) will be too late though - but I'm willing to bet that whatever is left of the IRS would rather deal with 25 million businesses, most of whom have accountants and audtis and who stay in one place and write trackable checks, rather than face 260 million taxpayers who have 250 million cigar boxes filled with paper and no receipts, and still have to work with the same 25 million businesses about other taxes.

-- Robert A. Cook, P.E. (Kennesaw, GA) (cook.r@csaatl.com), March 16, 1999.

If the IRS goes down, doesn't it make sense that other infrastructures will go down as well . . . say banking and financial? How are we going to pay taxes at all? I hope an agent doesn't come to my door demanding back taxes in the form of livestock or canned goods! (That will be 50 chickens, a cow, and 2 cases of Spam for year 2000)

-- linda (smitmom@hotmail.com), March 16, 1999.

Yeah, those guys from Hagar the Horrible will show up, black hoods and big axes...

-- Shimrod (shimrod@lycosmail.com), March 16, 1999.

Tim - "a sales tax might hamper spending on discretionary items" - true. However, wouldn't it also encourage people to save?I don't think there is an easy answer, but this is my favorite. Just my $.02 <:)=

-- Sysman (y2kboard@yahoo.com), March 16, 1999.

My bet is that they'll push flat tax, not sales tax. Sales tax would stimulate underground economy too much, and that is what they are trying to get rid of with all these auto file and deposit rules.

Hey anyone read that new GAO report on the IRS?

-- Mitchell Barnes (spanda@inreach.com), March 16, 1999.

A 17% flat national income tax would be outrageous, and unsupportably regressive. The working-class stiffs, such as myself, couldn't handle it.

For me, that'd be an extra 300.00/month gone - taking with it all "consumer" spending.

I better look further into this.

-- Lisa (lisa@work.nonono), March 16, 1999.

Sysman:
Flat tax or sales tax, either will be an improvement if TSDNHTF I told my accountant about this thread, and he said, "WHAT?!? ;-)

-- Tim (pixmo@pixelquest.com), March 16, 1999.

Lisa -

All us working stiffs get hit for more than 17% right now (some of us much more.) Flat tax would simplify everyone's life and get rid of that pork-ridden, idiotic, social-engineering kludge they call the Tax Code. Congresscritters could spend their time far more beneficially than coming up with new wrinkles in the Code...

You know why the IRS can't ever update or remediate its systems? Because you can't engineer a reliable software system that contains no logic.

-- Mac (sneak@lurk.com), March 16, 1999.

Think about it. Charging more tax for persons who make more -- even in overtime or 2nd jobs -- and charging more on ALL they make, no less -- is literally anti-capitalistic. It is punishing people for the crime of working overtime, or going to school to get better jobs, or what have you. The existing tax structure is totally antithetical to everything capitalism is supposed to stand for.

The most logical (and perhaps probable) tax would be a VAT, which is "value added tax," which was mentioned above as a form of sales tax. It's a tax applied to products, and the tax amount is different depending upon the luxury value of the item. E.g., bottled water has no or almost no tax; candy has quite a bit; cigarettes and fur coats are outrageous.

VAT also has the advantage of avoiding the double-taxation system already faced by many such as waiters, for example. It also falls more in line with the actual movement of the economy (purchases) rather than salary.

I pay about 30% taxes on each paycheck and I think it pretty much sucks. But, I'd be more happy to do it if only the money was used in some useful fashion, and if only it weren't collected by the administrative gestapo of the land.

PJ

-- PJ Gaenir (fire@firedocs.com), March 16, 1999.

There is a national sales tax on top of provincial sales taxes up in Canada where capital formation is virtually non existant.

Their stock market is getting sick and their dollar is even sicker.

They would probably welcome a Y2K paralysis of their taxing authorities if it were not for all of their multitude of beloved healthcare and welfare dependencies.

-- Watchful (seethesea@msn.com), March 16, 1999.

Where in the Constitution is a "sales" tax authorized? Do you know what types of taxes are authorized? Probably not. There would have to be an amendment for that. The only reason the "income" tax is legal is that it is voluntary. 16th amendment didn't authorize an "income" tax as we know it; it merely codified some court decisions.

Again, don't assume you know what the income tax is and whether you are subject to it and liable for it.

http://goodbiz.com/tbks/

-- A (A@AisA.com), March 17, 1999.

A National Sales Tax will NEVER pass Legislation. The Constitution says "twice" that "No direct tax shall be laid"! Our Founding Fathers were so dead set against ANY income tax, that they wanted to be sure Americans would understand that, so they put it in the Contitution TWICE! This is the ONLY thing in the Constitution that is mentioned TWICE!!!

The ONLY tax system that can be Constitutional is the present tax systam, which is "voluntary!" Many yearly tax intructions claim the tax is voluntary. This can even be found in IRS Agents handbooks!

Americans pay a voluntary tax, because they are lazy and complacent and most have NEVER read or studied the Constitution!

They don't even know that they do not have to show their drivers license to a cop when pulled over. The Bill of Rights protects you from excessive fines! When pulled over you can invoke the protection of your 1st, 4th, 5th and 8th Amendments Rights and there is NOTHING a cop can do because he has made an oath to uphold the Constitution!

The 1st gives you freedom of speech, It gives you the freedom to speak or not to speak, so you don't have to talk to the cop after you tell him YOUR RIGHTS! The 4th protects your papers, like a drivers license. The 5th tells you that you are not required to be a witness against your self, so you don't have to give him your drivers license, or give him any other information! The 8th protects you aginst EXCESSIVE FINES! It says NO EXCESSIVE FINES SHALL BE IMPOSED!

The cop MUST let you go when you invoke the protection of the Bill of Rights, or you can sue him for damages! Americans, start studying the Constitution and YOUR Bill of Rights so your Government will stop walking all over you!

-- IRS sucks (IRSsucks@Nopaytax.com), March 18, 1999.