Independent American

Mr. Independent?

2009-10-05T18:15:00.000-07:00

...And it appears to be a long - no, it has been a long time. That said, I'm going to get right down to what's on my mind. I notice that CNN's Lou Dobbs has adopted the monicker of "Mr. Independent." I've watched his show in the past, and he did appear at times to be breaking out of the strictly right-leaning mode of thought that seemed suitable for his "Moneyline" persona. I had hoped that his views would have continued their course of moderation, and that the new "Mr. Independent" would be what he was promising to be. Voices of reason in the mass media are rarer than white tigers in the wild, and I hoped to be able to add Lou to the short list of these voices. Unfortunately, Lou is no more "independent" than Bill O'Reilly. He's just as right-leaning as Bill, but he sounds reasonable rather than maniacal. Sorry Lou, but simply denying political party loyalty or adherance to an ideology does not qualify you as "Independent". I do, however, remain open-minded and will reserve final judgment until I've watched a bit more. My initial impression remains an unfavorable one.

Independent American: One Bereaved War Mother Arrested. How Many More?

2006-10-28T22:18:00.000-07:00

The lady I wrote about in this article has been nominated for the Nobel Peace Prize. Independent American: One Bereaved War Mother Arrested. How Many More?

What A True Independent Is

2006-08-24T22:03:00.000-07:00

True Independents are a rare breed. Many people who call themselves Independent are nothing of the sort. Some believe that being labeled "Independent" will mean that others will have to perceive them as being objective, non-biased, and judging things based solely on sober analysis. Often, all people like this are really doing is trying to create a smoke screen for their own partisan hackery. Or they're just trying to find a way to weasel into an election they already lost.

Anyone who has a shred of integrity and actually does soberly analyze things objectively comes to understand the detrimental effects of party politics on society in general. George Washington spoke of this in his Farewell Address in 1796:

"I have already intimated to you the danger of parties in the state, with particular reference to the founding of them on geographical discriminations. Let me now take a more comprehensive view, and warn you in the most solemn manner against the baneful effects of the spirit of party generally.

This spirit, unfortunately, is inseparable from our nature, having its root in the strongest passions of the human mind. It exists under different shapes in all governments, more or less stifled, controlled, or repressed; but in those of the popular form it is seen in its greatest rankness and is truly their worst enemy.
The alternate domination of one faction over another, sharpened by the spirit of revenge natural to party dissension, which in different ages and countries has perpetrated the most horrid enormities, is itself a frightful despotism. But this leads at length to a more formal and permanent despotism. The disorders and miseries which result gradually incline the minds of men to seek security and repose in the absolute power of an individual, and sooner or later the chief of some prevailing faction, more able or more fortunate than his competitors, turns this disposition to the purposes of his own elevation on the ruins of public liberty.
Without looking forward to an extremity of this kind (which nevertheless ought not to be entirely out of sight), the common and continual mischiefs of the spirit of party are sufficient to make it the interest and duty of a wise people to discourage and restrain it. "

Two centuries of party politics in this country appear to have played out as Washington predicted that they would.

True Independents are to party politics what atheists are to organized religion. We are outside of it because we have seen inside of it, and have seen it for what is really is, stripped of the rhetoric and symbolism. We're not actively trying to destroy it, however, because we realize that it's not going anywhere until enough people discover what's happening for themselves.

Interestingly enough, a true Independent Mind tends to lean to the left side of contemporary political thinking modes. True Independent thought is Godless, but not it the atavistic way implied by certain partisan political hacks who will not be named. It is Godless in that it does not worship systems, groups, organizations, political parties and the like. Liberalism and modern Conservatism both claim to place the worth of the individual over that of the collective. Only Independents correctly view individualism as NOT an enemy of community, but rather as community's most vital pillar. Valuing individuals as the people they are and understanding that no community can stand strong without this perspective as a guiding principle is the basis of true Liberty as well as successful democratic government.

Conservatism seeks to "conserve" the old order of monarchies, oligarchies, and plutocracies where one group of people seeks to constitute themselves as an elite ruling class over all others. Life as a non-elite in a conservative-run society is miserable to say the least. This is nothing that true Independents want to conserve.

Independence IS democracy. Independent of a ruling class, people can live free.

I'm not undecided. I'm not an apologist for some political party's beliefs. I'm Independent.

State of Which Nation?

2006-07-06T12:49:00.001-07:00

The American Socio-Political climate is kaliedoscopic in the variety of issues at the fore. Let's start by looking at the NSA wiretapping/phone record collection issue. In this country, the land of the free and the home of the 4th Amendment, Independent Americans are correct to be leery of the idea of domestically-focused intelligence gathering. Some in the media have attempted to frame the issue as an idea Americans "don't mind", which is what a recent Washington Post poll that attempts to do:

The new survey found that 63 percent of Americans said they found the NSA program to be an acceptable way to investigate terrorism, including 44 percent who strongly endorsed the effort. Another 35 percent said the program was unacceptable, which included 24 percent who strongly objected to it. A total of 502 randomly selected adults were interviewed Thursday night for this survey. Margin of sampling error is five percentage points for the overall results. The practical difficulties of doing a survey in a single night represents another potential source of error.

At first glance, the Post is providing evidence of wide support for the NSA's program that involves acquiring millions of phone call records without warrants or congressional oversight. However, it amounts to not much more than a textbook example of spin, and here's why.

The opening statement is a half-truth. The actual question that the 63% answered "acceptable to" was:

It's been reported that the National Security Agency has been collecting the phone call records of tens of millions of Americans. It then analyzes calling patterns in an effort to identify possible terrorism suspects, without listening to or recording the conversations. Would you consider this an acceptable or unacceptable way for the federal government to investigate terrorism? Do you feel that way strongly or somewhat?

The conclusion the Post draws does not factor in the effect of the phrase "without listening to or recording the conversations." This dramatically alters the nature of what "acceptability" means relative to the larger issue.

To be sure, the vast majority of Americans are not involved in terrorist activities ala Al Qaida, thus it is of little consequence to them if somebody knows who they call, when they call, or who calls them. The rationale is, "I'm not doing anything wrong, so I have nothing to hide." Another take on this could be: "I'm innocent, so go ahead and prove I'm guilty." The problem with this attitude is that it accepts Government pursuit of criminal investigations based on two things:

1. Assumed Guilt
2. Lack of Probable Cause

People who take the "I have nothing to hide" attitude are placing personal pride above the Canon Law upon which the existence of this country depends. Accepting a dismissal of fundamental constitutional rights in the name of "national security" has to make one wonder exactly what happened to the spirit of "Don't Tread on Me" that once defined America.

America's Debt Problem

2006-06-29T03:36:00.000-07:00

The root of the debt problem lies more in the fact that fractional reserve banking creates an economic situation in which a few people make enormous profits from the debt of others in the form of interest and fees, while putting virtually nothing at stake. Those making the profits put themselves in a position where they control everything, from the government on down. Forget the law as the "ultimate backstage pass" as Al Pacino said in the movie "The Devil's Advocate", banking is where it's at.

The fractional banking system allows private banks, rather than the people (via government) to create money. The Constitution gives Congress the power to create money, but they've abdicated this power to a private bank called the Federal Reserve. That is why all of the paper money says "Federal Reserve Note." You may say, "but the U.S. Mint prints the money." Yes, but only after the U.S. Treasury sells Treasury notes to the Fed, who then creates an entry in a ledger that is equivalent to the amount of the notes sold. The treasury can then have the Mint print that amount of money, which the Treasury pays full face value for, while the Fed's cost on the bills is minimal and the same regardless of denomination.

Our tax dollars go to pay the interest on the Government debt to the Federal Reserve (which is NOT a government agency - they are only 'Federal' in the same way that 'Federal Express' is). The IRS is the collection agency, and boy, have they been busy. Tax cuts for the mega-rich have been accompanied by stepped-up enforcement on everybody else. That interest has got to be paid, and those who benefit from that interest surely aren't going to stand for a situation that requires that they tax themselves! Thus, we have the Conservative push for tax cut packages that benefit the wealthiest Americans, and - here is where the real ignorance kicks in - millions of Americans who support Conservative policies because they allow themselves to be hoodwinked by wedge issues rather than understand the implications of giving fewer people more money, and thus more power. The Founders of this country fought a war to break free of just such a situation. Conservatism pushes to bring those days back, and anyone who supports Conservatism is not capable of being 'patriotic'. Being true to your country means standing behind what the country was built upon, not just blindly following whatever those at the reins of the Government say.

America was built upon the right people are born with to live free, not to be ruled by a monarch or something like it. The Conservatives talk about "smaller government" and they do mean that, but only in the sense of there being no central point for the people to gather and try to mutually decide upon the framework for their destinies - you see, the Conservatives would rather not have that - it gets in the way of allowing a minority to consolidate power. Whenever anyone starts talking about "smaller government" to me, I like to point out that a King and Queen make a for a pretty small government. I may be a bit guilty of equivocation, but many people get the point of what I'm saying.

Freedom isn't free, but it's not some nebulous "terrorists" who we have to fight for it, it's the forces of American Conservatism. I only hope I'm around to see the day when the blowback hits these lying, manipulative bastards square in their un-patriotic faces.

Tell Ted Nugent that it doesn't matter how good of a shot he is, or Charlie Daniels for that matter, they are mistaken to think that "liberals" (the Conservative catch-all term for anyone who disagrees with them) pose the danger to America that their buddies in the Republican party do. Being famous does not automatically make them any kind of authority on anything, but the Conservatives have been able to increase the mega-rich/poor divide by using shills like these guys to help further their cause among the people they hurt the most.

If anyone thinks that Osama bin Ladin was going to get a boot in his ass (as the song goes), he'll be getting off light compared to what's going to happen to these fake patriots when the Real Americans realize they have been attacked in a way much more devastating and insidious than 9/11 or Pearl Harbor. The realization is already starting to happen, and no amount of NSA spying, Halliburton-built detention camps, or disinformation spread by hacks and shills is going to stop it. American Revolution, version 2.0 - coming to a country near you - BE THERE!

(For an excellent, concise read on the root cause of wealth inequality today, see Money vs. Wealth by David Korten, who has an MBA and PhD from Stanford University's Graduate School of Business, has served on the faculty at the Harvard Graduate School of Business, and has spent many years in Asia on assignment from the Ford Foundation and the US Agency for International Development.)

Responsible Economic Policy: An Ideological Comparison

2006-05-23T17:02:00.000-07:00

The epithet "tax-and-spend liberal" is wielded by conservatives as a killing stroke against their liberal opponents. The fact that this term has any effect on voters is more a testament to the political right's adeptness at manipulating language than it is an accurate assessment of left-wing economic policy. "Tax-and-spend", as used by the right wing, implies that taxation will be increased automatically, as a matter of course. Since nobody likes taxes, the association of liberals to taxation has been a powerful rhetorical tool for the conservatives. Those who buy into the notion of "tax-and-spend" as oppressive economic policy and support a policy of tax cuts are short-sighted, not to mention ignoring the obvious. "Tax-and-spend" is by far the more responsible economic policy to follow. "Tax-and-spend" means that any spending that occurs will have a source of funding. The alternative is to borrow the money and create debt. That would make the current U.S. Administration "Credit Card Conservatives", and the "credit card" they're using is "American Taxpayer Express." As far as a sound economic policy goes, Independent Americans prefer "pay-as-you-go" to perpetual snowballing debt, and the dependent, vulnerable mindset of indebtedness.

Patrick Henry

2006-03-03T17:03:00.000-08:00

If you make the citizens of this country agree to become the subjects of one great consolidated empire of America, your Government will not have sufficient energy to keep them together: Such a Government is incompatible with the genius of republicanism: There will be no checks, no real balances, in this Government: What can avail your specious imaginary balances, your rope-dancing, chain-rattling, ridiculous ideal checks and contrivances? But, Sir, we are not feared by foreigners: we do not make nations tremble: Would this, Sir, constitute happiness, or secure liberty? I trust, Sir, our political hemisphere will ever direct their operations to the security of those objects.

Consider our situation, Sir: Go to the poor man, ask him what he does; he will inform you, that he enjoys the fruits of his labour, under his own fig-tree, with his wife and children around him, in peace and security. Go to every other member of society, you will find the same tranquil ease and content; you will find no alarms or disturbances: Why then tell us of dangers to terrify us into an adoption of this new Government? And yet who knows the dangers that this new system may produce; they are out of the sight of the common people: They cannot foresee latent consequences: I dread the operation of it on the middling and lower classes of people: It is for them I fear the adoption of this system.

- Patrick Henry, in his argument against establishing a strong federal system of government for the new United States.

So, was he right?

The "United States" vs. "America"?

2006-03-03T01:50:00.000-08:00

The United States of America. In general, the very name of our country is now far removed from its meaning. The country of the United States has been subtly replaced by "America," a mega-state of all the states. We think of ourselves as "Americans" above all, and state members like "Californians" or "Floridians" as a side note. However, that was not the intent of the creation of the United States, and the federal government superseding the states is an aberration that the Constitution was designed to prevent - as the founders knew history, and feared the day when the United States would become one country as it is now. Is it any wonder they feared such a thing, given the current State of the Union with its ever-consolidating power? The issue of "State's Rights" that we learned about in jr. high history was about this very issue, the right of a state to declare a federal law null and void within that state. The Civil War was about this issue more than any other. Slavery is what we are taught to be at the root of the Civil War, but really, the real cause was the battle for state's rights - the right of states to remain the autonomous entities they originally were, and the Federal portion of government remaining relegated to maintaining a loose unity (confederacy) among them for mutual benefit. Issues such as common defense, the basic structure for a common law, and ensuring free trade and travel between the states were paramount. The role of the federal government was meant to be one of very general administration. That's why the Constitution had to be ratified by each state individually. Each wanted to make sure that in this common administration, no state would have an advantage over any other, particularly in interstate commerce. Each state, then, could adapt its own internal administration to suit the specific wishes of its own citizens without adversely affecting any other state. If it could affect another state adversely, then Federal Law would have authority to right the wrong - that was the intended extent of Federal power as stated in the Constitution. We were taught that the South wanted to keep slavery, the North abhorred it, and so they went to war for the sake of the slaves. The North won, and Lincoln preserved the Union by defeating the Confederacy. But a Confederacy is what the United States was always [I]supposed [/I]to be, what it was designed to be. What the South was really fighting for was to keep the "United States" exactly that. United States that were in the part of the world commonly called America and were largely self-governing (LIBERTY!), but giving a little autonomy to the Federal government to maintain an equable partnership with other states (JUSTICE FOR ALL!). The Union was trying to consolidate more power and autonomy at the Federal level, the roots of the super-state "America." When the South decided the United States was becoming bigger at the federal level than the sum of its parts, they said, "This isn't the United States of America anymore" and broke off on their own to make a new confederacy. The Union, though, did not want to lose this newfound power and deficit-spent into war to force the South to get back on board. Lincoln is revered for preserving the Union, but could he have known what it would lead to? Did he foresee the effects of growing Federal authority over the states as a path to tyranny? Could he have? The Constitution was designed to allow for Federal authority by consent, as the framers were wise enough to know that that is the far more effective way to go than authority by force. England had been asserting authority by force, and the colonies fought against it. It is then reasonable to assume that the founders of the mutual alliance of the colonies would want to create a way for states to remain free, but subject themselves to the least amount of outside authority as possible while still maintaining the benefits of being as one country with the other states, namely freedom to live, work, trade, and move about while keeping a mutual framework for banding together to defend the interests of all against other countries. Enter the document called the Articles of Confederacy, a first draft for what would become The Constitution. Current fans of the Iraq war like to compare Iraq's problems in building a democracy with those faced by the young United States, but the comparison is invalid on many counts. First, Iraq as a country had not rebelled en masse against authority by force; their authority was defeated for them by a foreign country with its own interests in mind. Because this change did not emanate from within, there was not a pre-existing core of leaders, no "Continental Congress" from which the foundations for a new government would have been built. "Democracy" was forced upon them at gunpoint, and they were forced to work within the confines another country's structure. "Here, Iraq - we just took down the only government structure you know, now here's what you're going to do: get together, elect some people, and write a constitution. It worked for us, and since we just kicked your old government's ass, you know it's going to work for you. So do it. It's called 'Freedom and Democracy,' and we'll keep our soldiers around to make sure you're doing it right and watch your oil for you. Yeah, and we'll leave whenever you tell us, or whenever we get around to it." Authority by consent or authority by force? Some Iraqis, of course, know history, too - and they aren't down with it. Many INSURGE, much like the U.S. Revolutionary army - but now, there's more than one, and they're fighting against each other to make their own autonomous states as well as against the occupying force that started this debacle in the first place. This occupying force in Iraq is the result of the quantum consolidation of Federal power and authority by force that overtook the United States during the Civil War. It is the result of the death of the "United States" at the hands of "America." Whether we like it or not, we're Americans because we're forced to be, not because we want to be. The Federal Government has a say in every aspect of our lives from cradle to grave. Laws are imposed upon states that do not reflect the states' individual values as reflected in the decisions of the citizens themselves. California's people and the people of a growing number of states (no pun intended) democratically chose to make Marijuana legal for medical purposes as a reflection of the collective values of the citizens. Some states have not. Yet, Federal Law imposes a single standard upon ALL states. This is a prime example illustrating that "America,” that is to say the Federal Government, IS the only "true" state now. The intent behind the design of the "United States" was to prevent the Federal level from overriding the Autonomy of the States. The North's victory in the Civil War was the birth of the "America" we know now, and ended the noble experiment of the "United States.” The Constitution is kept around now to give the illusion that the "United States" still exists, when, in fact, it has not existed for a long time. The "Constitutional Crisis" we face is nothing less than the illusion fading away before our eyes as we wonder, "How is the Federal government able to thumb its nose at the Constitution so easily?" We realize that it can only be because those who swear to "uphold it" know that it is, as they've suggested, a DEAD document. The Feds don't use it, as they have no need of it. The Constitution has long since been replaced by other Codes, and the Supreme Court is a purely political body that is used to maintain the illusion of "Constitutionality" in our laws. The Feds do not need "laws," as they have military power and economic control consolidated in their hands, which they use at will to advance their agenda. People can still believe in the Founding Fathers, and quote the Bill of Rights all they want, and they can argue Constitutionality all the way to the Supreme Court, who then decides, "should we throw them a bone here, or not? First Amendment case, sure let them have that one. Eminent Domain? Heck, no. Warrantless wiretaps? What, I didn't catch that one..." It's all to feed the illusion that the "United States" as we are taught in school (coincidence?) actually exists. It doesn't. We think that it does, and this is the core of the authority of the Oligarchy in Washington. It is authority by force, but with our consent. Forced consent, but consent nevertheless, based on true patriotism for a country that only exists in our minds. There are some who believe in a One World Government conspiracy, or the Illuminati, or the NWO, what have you. None of them, though, is the "real deal." These are carefully crafted fantasies designed to keep people guessing about who seems to have the shadowy power to control the world. It's a bit like Poe's story "The Purloined Letter." The police are looking for a letter, but despite hard work, they never find it because it is sitting out right in the open. Their own prejudices and lack of imagination do not allow them to see the obvious, they insist that it has to be hidden somewhere. The real WMDs are Weapons of Mass Distraction, and we are attacked with them everyday. Until true Patriots can collectively neutralize the effects of WMDs, they will be chasing shadows, and the last hope of making the United States something more than a fond dream of the Founders will be gone. Yes, the Union made a big issue of Abolition, but managed to expand slavery instead. The ending of the oppression of blacks was the only good thing to come from the Civil War, but that too is an illusion. U.S. Grant made about as much effort to help blacks in the South during Reconstruction as Bush did in New Orleans. THIS IS HARDLY A COINCIDENCE. To be continued, perhaps...

More Analysis of the FairTax

2006-02-23T01:11:00.000-08:00

Last fall, Independent American reported impressions of the FairTax plan, and came to the conclusion that it was not a good idea. The Presidential Tax Reform Advisory Panel agreed, rejecting the FairTax plan among many others. Three weeks ago, Leonard Burman of the Tax Policy Center gave Congressional Testimony in front of the Panel, and included his own assessment of the FairTax:

“[T]he NRST (National Retail Sales Tax) is uniquely flawed and unworkable.”

What follows is an excerpt of Mr. Burman’s Testimony.

Testimony on Tax Reform, National Retail Sales Taxes, and Small Businesses Leonard E. Burman February 1, 2006

National Retail Sales Tax

The Tax Reform Panel rejected a National Retail Sales Tax (NRST) as an option. A NRST, called the FairTax by its proponents, is a single flat tax rate applied to an extremely comprehensive base of final retail sales. To offset the regressivity of a sales tax (low-income people spend much more of their income on consumption than those with higher incomes do), every household would receive cash payments from the government equal to the sales tax owed on a poverty- level income. Advocates claim that all federal taxes could be replaced by a single 23 percent flat-rate NRST on a tax- inclusive basis (30 percent on the more conventional tax-exclusive basis against which other sales taxes are typically measured).2

However, this low tax rate implicitly assumes that all federal, state, and local government expenditures are in the tax base and that nominal government spending doesn’t change. In other words, the FairTax proponents’ math only works if real (after-tax) government purchases are cut by 23 percent across the board. William G. Gale has calculated that if state and local governments are exempt from the tax and federal government spending doesn’t change, the 23 percent NRST would increase the deficit by $268 billion in 2005 and almost $600 billion in 2010 compared with current law.3 Put differently, the revenue-neutral tax rate would be 31 percent on a tax- inclusive basis (44 percent if tax-exclusive), and that is under the implausibly optimistic assumptions of FairTax supporters: no avoidance, evasion, or erosion of the tax base.

In fact, even those high tax rates vastly understate the combined federal and state sales tax burdens, for numerous reasons. First, even if it were feasible to include purchases by state and local governments in the tax base (as assumed by FairTax advocates), doing so would require state governments to collect even higher taxes, so the combined state and federal tax rates would have to be much higher than assuming unchanging state tax rates. Moreover, as the report notes, taxing state and local government purchases would be problematic at best in our federal system of government.

Another problem for the states is that, if there were no federal income tax, it would be very difficult to maintain a state income tax. States benefit from the IRS’s information collection and auditing procedures, which would no longer exist. The compliance burden of state income taxes would be very high relative to the comparatively small amount of revenue collected by states, and taxpayers would pressure state lawmakers to eliminate their income taxes. (If they didn’t, many of the simplification gains from eliminating the federal income tax would evaporate since taxpayers would still have to deal with income tax complexity at the state level.) But without a state income tax, states would have to increase their own sales tax rates significantly.

The report assumes zero evasion, which is implausible. At the rates necessary to finance federal, state, and local governments, evasion would be rampant. This evasion would hurt compliant taxpayers and require still higher rates. It would also trickle down to the states, which would lose a significant portion of their tax bases. As a result, the required combined federal and state tax rates would be exorbitant. As a practical matter, government at all levels would have to be much smaller.

NRST advocates also assume that almost all forms of spending will be included in the federal retail sales tax base—including new homes, medical expenses, and financial services (which are notoriously hard to measure). Can policymakers really justify 40 to 80 percent tax rates on insulin? Would such a tax on new home sales be politically feasible? If it isn’t, the tax rates would have to be higher still.

The Tax Reform Panel concluded that NRST rates would have to be between 49 and 89 percent on a tax-exclusive basis, assuming a moderate amount of evasion, depending on how broad the tax base is. The Joint Committee on Taxation, as reported by Martin A. Sullivan, and William G. Gale reached similar conclusions.4 On top of those high federal rates, state sales tax rates would have to be 10 percent or more in many states.

The Panel report also shows that adopting the NRST would shift the tax burden significantly onto the middle class. Low-income people would pay lower taxes than under current law because of the cash subsidy, or “prebate,” and high-income people would pay much less because consumption is such a small share of their income. Thus, to raise the same amount of revenue, taxes would have to increase dramatically on the middle class. What’s more, the prebate would be “by far the largest [entitlement program] in American history.”5

There would also be problems in distinguishing final (taxable) from intermediate (nontaxable) sales (e.g., PCs). But taxing intermediate sales, as many states do, creates cascading rates (taxes applied on both inputs and outputs), which distorts investment decisions. And there could be problems in coordinating across states since state tax bases differ from each other and from the federal tax base.

Finally, the proposal would impose a disproportionate compliance burden on small businesses. The Tax Reform Panel cites a well regarded study of experience in Washington State, which found that compliance costs for small firms were 6.5 times as large as those for large firms.

The rampant evasion would hurt legitimate businesses, which would suffer relative to the growing underground economy. It would also undermine confidence in the fairness of the tax system (which would fuel more evasion).

Enormous transition problems can also be expected. If businesses can’t deduct unused depreciation, they would suffer an immediate and large capital loss. But if they are permitted to take those deductions, the NRST rate would have to be larger still to make up the lost revenue. Moreover, absent intervention by monetary authorities, prices would rise by the amount of the tax. Those higher prices would immediately erode the savings of elderly Americans. (Social Security benefits would be maintained in real terms because they are indexed to changes in the price level.) If instead prices were held fixed by monetary policy, then the tax would effectively be borne by stockholders (in the form of capital losses) and workers (in the form of lower wages). Again, retirees, whose stock portfolios would be devalued, would suffer disproportionately.

To be clear, many of these problems are unique to the NRST. Other forms of consumption tax, such as a VAT, flat tax, or X-tax, would likely be no more difficult to administer than the current income tax and would not undermine compliance with state sales taxes.6 But the NRST is uniquely flawed and unworkable. No wonder that no developed country has ever tried this radical experiment.

With your permission, I’d like to include an article Bill Gale and I wrote on the Tax Reform Panel report into the record as part of my written testimony. 7 Thank you. I would be happy to answer any questions.

2 As the Panel’s report points out, sales taxes can be represented on a tax-inclusive or tax-exclusive basis. Ordinarily, sales taxes are measured as a percentage of the pre-tax sale price of a good. Income taxes,however, are usually measured as a percentage of income including taxes. A 30 percent sales tax on a tax-exclusive basis would equal 23 percent of the after-tax price (0.30/1.30 = 0.23). The Panel report presents sales tax rates on a tax-exclusive basis to make them readily comparable with other sales taxes. 3 William G. Gale, “The National Retail Sales Tax: What Would the Rate Have to Be?” Tax Notes, May 16, 2005, pp. 889–911. 4 See Martin A. Sullivan, “The Rise and Fall of the National Sales Tax,” Tax Notes, November 15, 2004, pp. 916–21; and Gale, “The National Retail Sales Tax.” 5 The President’s Advisory Panel on Federal Tax Reform, Simple, Fair, and Pro-Growth (Washington, DC: U.S. Government Printing Office, 2005), p. 208. 6 They would share other drawbacks with a NRST. They would tend to shift the tax burden away from those most able to pay and would create similar transition problems. Moreover, a flat tax or X-tax may not be border tax–adjustable under WTO rules, as noted by the Tax Reform Panel in its discussion of the GIT (which is based on the X-tax). 7 Leonard E. Burman and William G. Gale, “A Preliminary Evaluation of the Tax Reform Panel’s Report,” Tax Notes, December 5, 2005, pp. 1349–68.

An Article For Thought

2006-02-04T00:37:00.000-08:00

I usually don't repost entire articles, but I believed that I should do my part to awaken all Americans to the real danger that we are facing.

Experts Claim Official 9/11 Story is a Hoax

Mon Jan 30, 11:37 AM ET (PRWEB) - Duluth, MN (PRWEB) January 30, 2006 -- A group of distinguished experts and scholars, including Robert M. Bowman, James H. Fetzer, Wayne Madsen, John McMurtry, Morgan Reynolds, and Andreas von Buelow, have concluded that senior government officials have covered up crucial facts about what really happened on 9/11. They have joined with others in common cause as members of "Scholars for 9/11 Truth" (S9/11T), because they are convinced, based on their own research, that the administration has been deceiving the nation about critical events in New York and Washington, D.C. These experts suggest these events may have been orchestrated by elements within the administration to manipulate Americans into supporting policies at home and abroad they would never have condoned absent "another Pearl Harbor." They believe that this White House is incapable of investigating itself and hope the possibility that Congress might hold an unaccountable administration accountable is not merely naive or wishful thinking. They are encouraging news services around the world to secure scientific advice by taking advantage of university resources to verify or to falsify their discoveries. Extraordinary situations, they believe, require extraordinary measures. If this were done, they contend, one of the great hoaxes of history would stand naked before the eyes of the world and its perpetrators would be clearly exposed, which may be the only hope for saving this nation from ever greater abuse. They hope this might include The New York Times, which, in their opinion, has repeatedly failed to exercise the leadership expecedt from our nation's newspaper of record by a series of inexplicable lapses. It has failed to vigorously investigate tainted elections, lies leading to the war in Iraq, or illegal NSA spying on the American people, major unconstitutional events. In their view, The Times might compensate for its loss of stature by helping to reveal the truth about one of the great turning-point events of modern history. Stunning as it may be to acknowledge, they observe, the government has brought but one indictment against anyone and, to the best of their knowledge, has not even reprimanded anyone for incompetence or dereliction of duty. The official conspiracy theory--that nineteen Arab hijackers under control of one man in the wilds of Afghanistan brought this about--is unsupportable by the evidential data, which they have studied. They even believe there are good reasons for suspecting that video tapes officially attributed to Osama bin Laden are not genuine. They have found the government's own investigiation to be severely flawed. The 9/11 Commission, designated to investigate the attack, was directed by Philip Zelikow, part of the Bush transition team in the NSA sector and the co-author of a book with Condoleezza Rice. A Bush supporter and director of national security affairs, he could hardly be expected to conduct an objective and impartial investigation. They have discovered that The 9/11 Commission Report is replete with omissions, distortions, and factual errors, which David Ray Griffin has documented in his book, The 9/11 Commission Report: Omissions and Distortions. The official report, for example, entirely ignores the collapse of WTC7, a 47-story building, which was hit by no airplanes, was only damaged by a few small fires, and fell seven hours after the attack. Here are some of the kinds of considerations that these experts and scholar find profoundly troubling: * In the history of structural engineering, steel-frame high-rise buildings have never been brought down due to fires either before or since 9/11, so how can fires have brought down three in one day? How is this possible? * The BBC has reported that at least five of the nineteen alleged "hijackers" have turned up alive and well living in Saudi Arabia, yet according to the FBI, they were among those killed in the attacks. How is this possible? * Frank DeMartini, a project manager for the WTC, said the buildings were designed with load redistribution capabilities to withstand the impact of airliners, whose effects would be like "puncturing mosquito netting with a pencil." Yet they completely collapsed. How is this possible? * Since the melting point of steel is about 2,700*F, the temperature of jet fuel fires does not exceed 1,800*F under optimal conditions, and UL certified the steel used to 2,000*F for six hours, the buildings cannot have collapsed due to heat from the fires. How is this possible? * Flight 77, which allegedly hit the building, left the radar screen in the vicinity of the Ohio/Kentucky border, only to "reappear" in very close proximity to the Pentagon shortly before impact. How is this possible? * Foreign "terrorists" who were clever enough to coordinate hijacking four commercial airliners seemingly did not know that the least damage to the Pentagon would be done by hitting its west wing. How is this possible? * Secretary of Transportation Norman Mineta, in an underground bunker at the White House, watched Vice President Cheney castigate a young officer for asking, as the plane drew closer and closer to the Pentagon, "Do the orders still stand?" The order cannot have been to shoot it down, but must have been the opposite. How is this possible? * A former Inspector General for the Air Force has observed that Flight 93, which allegedly crashed in Pennsylvania, should have left debris scattered over an area less than the size of a city block; but it is scattered over an area of about eight square miles. How is this possible? * A tape recording of interviews with air traffic controllers on duty on 9/11 was deliberately crushed, cut into very small pieces, and distributed in assorted places to insure its total destruction. How is this possible? * The Pentagon conducted a training exercise called "MASCAL" simulating the crash of a Boeing 757 into the building on 24 October 2000, and yet Condoleezza Rice, among others, has repeatedly asserted that "no one ever imagined" a domestic airplane could be used as a weapon. How is this possible? Their own physics research has established that only controlled demolitions are consistent with the near-gravity speed of fall and virtually symmetrical collapse of all three of the WTC buildings. While turning concrete into very fine dust, they fell straight-down into their own footprints. These experts and scholars have found themselves obliged to conclude that the 9/11 atrocity represents an instance of the approach--which has been identified by Karl Rove, the President's closest adviser--of "creating our own reality." # # # UNIVERSITY OF MINNESOTA James Fetzer 218 724-2706 E-mail Information

One Bereaved War Mother Arrested. How Many More?

2006-02-01T19:20:00.000-08:00

Cindy Sheehan's arrest for wearing a t-shirt to the State of the Union Address is indefensible, regardless of which side of the aisle you're on. The Capitol Building rules are understandable and clear. The arrest plainly illustrates the degree to which civil and constitutional rights have been eroded. The plain letter of the law now takes a backseat to purely subjective enforcement. Sheehan was arrested because someone interpreted the words on the shirt, derived a meaning from it that he/she didn't approve of, and made a determination that the shirt violated the building code despite the fact that it made no argument or clear reference to a party, organization, or movement. Granted, that describes the process for any situation, but there's a problem with this specific situation. The problem is that the decision to move on Sheehan was purely arbitrary, based only on an implied meaning in the form of a question. If the shirt had read "2,245 Saved. How many more?" would Sheehan have been arrested for an implied message about the Christian Church, which is an organization (actually several)? A consistent application of the code would say yes, but what's becoming more apparent is that codes and laws mean nothing to those in power. The law becomes a moot point. Anyone who considers themselves a "true American" should consider this arrest as a slap in the face to the sacrifices made by Americans (both in the past and today) to protect the freedom our Constitution once provided. Their sacrifices will have been in vain if the current pattern of power abuse is allowed to continue. The State of the Union is shabby, indeed.

The Other Side of Scholarship Essay Contests

2005-12-24T21:27:00.000-08:00

Higher education in America is certainly not cheap. Anyone currently attending college can attest to that fact. The government assistance which helped create today’s leaders is drying up while costs continue to rise. Many students apply for scholarships to help defray the costs, and competition for these limited funds is fierce. I’ve entered a few contests, but have yet to win anything. The winners usually are students at top-tier universities, while those of us at the community college level, particularly non-traditional students, don’t seem to fare too well (A notable exception to this trend is the Datatel Scholarship Program, which features a scholarship specifically for returning students like me, and the winners are RARELY from Div I Universities).

In the case of essay contests, certain sponsors courteously post the winning entries while others do not. I believe the winning entry should always be posted online. Simply posting a notice that says "Congratulations to X for an outstanding essay" does not give a great deal of insight as to how the losing essay writers may improve their writing, nor does it prove that the judging was completely objective. Those who submit their work into the public arena do so with an expectation that their work will be scrutinized, and although they don't expect individual critiques, the opportunity to compare one's work to those of others can be a great educational tool. Isn't the goal of awarding a college scholarship to encourage education? I believe it is, or at least it should be a goal.

So, in the interest of education, I will show the other side of the story. I will post a series of losing essays which I have entered into various scholarship contests, as well as all essays which I enter into future contests. Here’s the first of many to come…

How has the technology of the past 20 years affected the relationship between the individual and society?

“Reach Out and Touch Someone” was the well-known marketing slogan of a major telephone company twenty years ago.  The advertisements usually featured wistful scenes of people separated by a long distance distractedly going about their day, when the telephone rings, and it’s a special someone calling to “just say ‘hi’.”  The recipient is deeply touched by the caller’s act of caring.  The commercial ends, leaving viewers thinking about for whom they could do the same, and checking the time to see if the lower evening rates were in effect yet.

The telephone company’s message successfully connected the practical uses of long-distance communications with the humanistic need for contact, even if the contact is not tactile.  The years since have seen an explosion in the quality, accessibility, and affordability of various modes of communication.  Technology has allowed individuals to “plug and play” in the larger human consciousness.  People on opposite ends of the Earth can converse with each other, share ideas, and learn things as never before.  This greater awareness of the outside world, however, has not translated into a growth of the individual mind.  Technology’s tremendous growth has served to shape individual minds into components of a larger collective mind, a “hive.”

“The Hive” was T.J. Bass’s name for the human society of a distant future.  In his 1974 book “The Godwhale”, the contradictions of advanced technology’s power and its weaknesses are brilliantly illustrated.  The story’s protagonist, Larry Dever, is a young man who becomes paraplegic after his spine is crushed during an accident.  Medical technology could not restore the use of his lower body despite its high level of sophistication.  Hoping for a cure, he chooses to have the paralyzed lower half of his body surgically removed and stored, use a robotic body called a Mannequin to replace his legs, and go into Suspension until medicine could develop the technology to make his body whole again.  Larry Dever symbolizes a society that had developed their technology to a high level, and put increasing faith in technology to make itself whole, a society much like our own.

Larry awakens in the distant future to find humankind completely dependent upon technology, and unable to turn back.  The Earth’s population has grown to 3.5 trillion, and lives inside of a domed city that covers all of the continents.  The inhabitants have lost their humanity and live symbiotically with technology, unable to reproduce or provide adequate food without technological assistance.  Through technology, they have mastered the human genetic code, and mass-produce offspring in giant laboratories. The technology that allowed them to build cyborg whales to harvest the seas until they died now allows them to produce food through molecular manipulation of chemicals and the protein of dead humans.  Each person in society is built for a specific purpose and is part of a class, much like bees in a hive are specialized into workers and drones.  This limited role of self in relation to society becomes more apparent in our 21st Century lives as technology continues to advance, and we become increasingly reliant upon technology to solve our problems and make things easier.

Technology in the last twenty years has indeed made individuals dependent upon society.  Whether an individual chooses this dependence is immaterial, as society cannot exist at the level it does now without it.  Computers are not the clichéd “wave of the future.”  They have become a cybernetic organ within the larger human body, an expansion module of the human nervous system.  Memories, images, and dreams can live completely independent from the minds that created them.  Thoughts, goals, even complete life histories are translated into 1s and 0s, stored in silicon, cloned, mutated, and teleported at the speed of light anywhere in the world, all at the stroke of a key or the click of a mouse.  Individuals realize that society is the keeper of their lives.  The records that prove who they are, or that they even existed at all are keyed into data files for safekeeping.  Every vital record, the net currency of every individual’s worth, is stored in memory banks across the globe. And, like other banks, they charge interest. The interest for individuals is a dependence on technology, and by extension, the society that provides it.  Like Larry Dever, individuals have sought to make themselves “whole” by relying on technology, and they are seeing this aim succeed, though not as they hoped.  They have become whole as a society instead.

Status: LOST
Winners’ Schools: Boston College, University of Pennsylvania, Columbia University

The Good War?

2005-12-19T18:00:00.000-08:00

"The Good War" is an oxymoron. Referring to death and destruction as a "good" thing sounds completely twisted, and in complete conflict with the values of freedom and liberty that America professes to espouse. The most basic freedom is the freedom to live and exist as a human being. Killing a person is the ultimate way to take a person's liberty.

The flip side to this is that dying for a cause is the most noble action a person can take. American deaths in WWII were not the most numerous compared to other wars, and were incredibly small in comparison to the losses of the other combatants. This was partially due to America's later entry into the war, and its preparedness. Military leadership was a great factor, and Patton's quote - "No bastard ever won a war by dying for his country. He won it by making the other poor dumb bastard die for his country." - crystallized American outrage from Pearl Harbor and a determination to win. Until Gulf War I, it was also the last major war that the U.S. won.

WWII lives as "The Good War" in American memory, but the definition of "good" differs. The generation that lived it has a different meaning for "good" than those that followed, who see the events through a filter of history, which as we all know is written by the victors. As Ellen Goodman wrote:

The men I know who have a paid-up membership card in the greatest generation talk less of wartime heroism than of camaraderie and scared-to-the- bones hope of survival. They share a certainty that the war itself was right. By which they mean necessary.

My own research confirms this. I have learned that a longtime suspicion that Roosevelt knew Pearl Harbor was going to be attacked and allowed it to happen has been proven true. The US had broken the Japanese radio code sometime beforehand, and had received plenty of other warnings throughout 1941. I thought how terrible that was, and how many innocent men died. But I also thought about how Pearl Harbor was what got America off its duff in time to win the war. My grandfather, who was barely 30 at the time, said that before Pearl Harbor "we were in no condition to fight a war. The military was in no condition..." A lot of innocent men died. But we won the war.

Another gentleman I spoke to was a military supply truck driver in Burma during WWII, and his recollection was similar to Goodman's observation: "Everybody pulled together. It was quite a time, then." No mention of "We nuked those Japs good! Or "We kicked Hitler's @$$!." This is in direct contrast to how we learned about war in middle school history class, where we learned that America never lost a war and we cheered out loud for American victories (real or perceived) of the past.

Wheatcroft's statement:

Was it ‘‘a noble crusade’’? For the liberation of western Europe, maybe so. Was it a just war? That tricky theological concept has to be weighed against very many injustices. Was it a good war? The phrase itself is dubious. No, there are no good wars, but there are necessary wars, and this was surely one.

is certainly confirmed by recollections of those who lived then and fought in that war. The war was necessary in that it was one, from our side, of self defense, and this was proven to be true. It is known that in war the aggressor sets the rules. Our actions then were just to the extent that we matched the aggressor's brutality with our own. War is hell, and this is why. Winning after being attacked requires that the attacked emulate the attacker, taking on some of the very characteristics and values they are fighting against.

The glorification of the U.S. victory in WWII does distract from the real, more troubling issues that Americans need to deal with at home. Our troops are sent to the other side of the planet to "fight for our freedom", while more is being done to destroy our freedom through economic stresses and curbing of civil liberties in clear violation of the Constitution. A nebulous, faceless group of Arab terrorists don't hate our freedoms, they hate our government. If they hate the American people it is due to our complicity in allowing our government to do what it does in our name. This is why Fascistic governments require an enemy. As a highly qualified fascist, Hermann Goering said at Nuremberg:

"Naturally, the common people don't want war, but after all, it is the leaders of a country who determine the policy...Voice or no voice, the people can always be brought to the bidding of the leaders. This is easy. All you have to do is to tell them they are being attacked, and denounce the pacifists for lack of patriotism and exposing the country to danger. It works the same in every country."

Works Cited

Goodman, Ellen. "Memories of the "Good War"." San Francisco Chronicle 21 May 2004. 06 Jul 2005 http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2004/05/21/EDGD56OL3S1.DTL

Wheatcroft, Geoffery. "How Good was the Good War." The Boston Globe 08 May 2005. 06 Jul 2005 http://www.boston.com/news/globe/ideas/articles/2005/05/08/how_good_was_the_good_war?pg=full

The New Deal and Beyond

2005-12-19T17:53:00.000-08:00

The New Deal marked the change of the Federal Government into a paternalistic, caretaking body of control. The "hub" of the U.S. government became a larger part of the "wheel", while the "spokes" of the "wheel" (State government) became shorter. This fundamental change to the balance of governmental power has been the greatest effect on American life resulting from the Depression. The U.S. was not the only country suffering from economic depression during that time, and comparing the political changes from one country to the next provides a fascinating lesson in political science.

It is common for a country to take an extreme political slant either to the left or the right after an economic collapse. Germany and Italy leaned to the political right with their adoption of ultra-right-wing political systems, which essentially merge government and business into a single sector. The U.S. leaned to the left economically, with a strong socialist bent. The government became a consumer, and took greater control over business. The massive public works projects and programs were funded by large deficits, and government payments were accepted on faith, as there was not enough actual money in the Treasury to cover the costs.

New Deal leaders flirted with the idea of building closer ties between business and government, but some of these efforts did not survive past World War II... While America never took the turn to fascism that similar business-labor-government arrangements did in Germany and Italy, the New Deal initiatives did point to a new sharing of power among these three key economic players. This confluence of power grew even more during the war, as the U.S. government intervened extensively in the economy.(Outline of the U.S. Economy).

Government in America has continued to grow in scope far beyond what the Founding Fathers had envisioned. This has had some apparent benefits for average Americans, and improved opportunities for women and minorities. But, the dependence of the Federal Government on debt and corporate backing has left it vulnerable to influences which use the government as a tool for their own ends. The recent court ruling on eminent domain is a prime example, as it basically allows government to seize private property to give to wealthy developers. Sounds like business controlling government...where have we seen this before?

All American Presidents since have been, at best, faint echoes of F.D. Roosevelt. For the people whom Roosevelt's plans and programs helped, he was regarded as "a god," particularly among women and minorities (Berkin, et al 777). Elected to four terms, his stoicism was America's candle in the darkness.

Americans' experiences during the Great Depression and FDR's leadership gave rise to a belief that the Federal Government has the responsibility of stabilizing the economy and the financial system, and helping citizens during times of economic trouble. "Uncle Sam" became an almost tangible presence for many Americans. Many important government agencies and programs were created in the 30s. Social Security, the Securities and Exchange Commission, the FDIC to insure bank deposits. In addition, The Emergency Banking Act of 1933 abolished the gold standard, meaning the Dollar would no longer be backed by gold or silver, just the credit of the U.S. government. This gave the government an everlasting blank check to fund the massive government spending during the depression and afterward. The cost has been a gradual shift of American politics back to the far right, and a reappearance of some of the same economic conditions that preceded the Great Depression. What could be so bad about that? It helps to recall how the Great Depression and World War II began after right-wing governments took control of the US in the 1920s, and Germany in the 1930s.

Works Cited

Berkin, Carol, et al Making America: A History of the United States, Vol II. Third Ed. Houghton Mifflin 2003.

"Outline of the U.S. Economy." U.S. Department of State. 02 Jul. 2005 http://usinfo.state.gov/products/pubs/oecon/chap3.htm.

What is Democracy All About, Anyway?

2005-12-19T17:34:00.000-08:00

Democracy is commonly equated with freedom itself. This is due to a general lack of understanding about what democracy really is. "...men have never experienced anything near genuine political democracy. What we have had are republics, and they have usually disintegrated into some form of benign, elective monarchy or oligarchy...a true democracy has never existed and never will exist; for it is against the natural order of things that the majority should govern the minority...The `people' have very little power and certainly in nearly all cases they don't rule.(Wirths)." Scott London further clarifies: The framers of the Constitution went to great lengths to establish the United States as a republic, not as a democracy -- as a government of laws, not of people. It is very significant, Wirths notes, that not only is the term "democracy" not mentioned anywhere in the U.S. Constitution, but the word does not appear in the constitutions of any of the fifty states. Given this insight into "democracy," we can see the term for the rhetorical device it really is. Listen to the Presidental speeches now and from years past, and hear them for the works of spin that they are. Democracy, at its core, is a recipe for mob rule, requiring a simple majority - or the illusion of a majority - to make critical decisions affecting the lives of all. Intelligent debate, or mitigating circumstances play no vital role in a decision's outcome - it doesn't have to. Just ask Sacco and Vanzetti. The American perception of democracy is a joke. Consider the fact that even majority opinion doesn't make things happen. The laws and policies of the nation are determined by a very small group of wealthy, priviliged few who attempt to control the minds of the many through the power of mass media and terror, and when necessary, enforce their decrees through paramilitary force. It's the real American way, and has been the case before, during, and after World War I, right up through today. The curbing of civil liberties during wartime has a long history in America, all the way back to the Alien and Sedition Acts of 1798, to wit: There were actually four separate laws making up what is commonly referred to as the "Alien and Sedition Acts": 1. The Alien Enemies Act authorized the president to imprison or deport any alien associated with any nation the United States was fighting in a "declared war," during a war time. 2. The Alien Act authorized the president to deport any alien considered dangerous, even in a peace time. 3. The Naturalization Act extended the duration of residence required for aliens to become citizens, nearly tripling it from five years to 14. 4. The Sedition Act made it a crime to publish "false, scandalous, and malicious writing" against government or government officials. With today's "Patriot Act", just as history proved of the Alien and Sedition Acts, the stated intent does not match the true intent of the laws. The Acts were ostensibly created to provide national security, but turned out to be tool of the political party in power, the Federalist party. Although not directly ruled upon by the High Court, The Sedition Act was seen as a direct violation of the First Amendment. In New York Times v. Sullivan, the Court declared "Although the Sedition Act was never tested in this Court, the attack upon its validity has carried the day in the court of history." 376 U.S. 254, 276 (1964). If there is an America in the future, it will not be proud of the years 2001-2006, which are proving to be closest America has come to destruction in its history, asthe threat eminates from within. The U.S. cannot justify its pattern of squelching dissenting minorities, as it usually uses the pretense of the national emergency of the moment to squelch any minority "it" disapproves of. For example, the current administration, with its Christian backers who coincidentally have a strong anti-gay bias, has seen fit to discharge homosexuals from the military for no other reason than their sexual orientation - even to the detriment of the stated "national security" agenda, as many have been Arabic translation experts. Oh, but who needs them when your declared "enemy" is a group of Islamic fundamentalists? America had better learn from its history if there is any hope for it - for us - to continue to exist.

Works Cited

London, Scott. Democracy - The Myth, The Reality by Wallace Wirths - A Book Review by Scott London. http://www.scottlondon.com/reviews/wirths.html. Jun 28,2005. Wirths, Wallace R. Democracy - The Myth, The Reality Media Specialists. Sussex, NJ: 1993 Wikipedia Alien and Sedition Acts June 28,2005 http://en.wikipedia.org/wiki/Alien_and_Sedition_Acts

Just a question

2005-11-05T19:28:00.000-08:00

There was a time when part of the American spirit was to root for the underdog. Whatever happened to the sense of humility that went with being the greatest country on Earth? If pulling for the underdog has become passe, I didn't get the memo.

Brief Message

2005-11-02T13:29:00.000-08:00

I apologize for my absence these last couple days. I am currently so wrapped up in other projects that this column has had to take a back seat while I work on them. There are writing assignments to finish, and November 2nd is the day of action for "The World Can't Wait." If you had a chance to participate in any "World Can't Wait" activities, please post your experiences here. There will be more to come from I.A. As long as there is something that needs to be said, I.A. will be one of the voices shouting in the darkness.

Quickie: That Eerie Feeling

2005-10-29T21:06:00.000-07:00

I don't know how many people watched the recent CBS "reality" show "Rock Star: INXS," but I have a feeling I'm not alone in feeling disappointed at the outcome. Worse, even though there were clues abounding over the course of the series, I felt as though I'd been had. "Rock Star" became a family event at my house. Every week we debated the merits and shortfalls of each contestant. It was fun. Yet, the winner was the guy we liked the least. Reminds me of the last election.

The Nature of Faith

2005-10-28T19:11:00.000-07:00

Faith is independent of religion, yet supports them all. What causes many problems is the abstract use of the word "faith." Faith is used these days as a code word for "religion." Faith, however, has a true definition outside of religion. Napoleon Hill objectively defined faith in the book Think and Grow Rich: "FAITH is a state of mind which may be induced, or created, by affirmation or repeated instructions to the subconscious mind, through the principle of auto-suggestion. Repetition of affirmation of orders to your subconscious mind is the only known method of voluntary development of the emotion of faith. Perhaps the meaning may be made clearer through the following explanation as to the way men sometimes become criminals. Stated in the words of a famous criminologist, "When men first come into contact with crime, they abhor it. If they remain in contact with crime for a time, they become accustomed to it, and endure it. If they remain in contact with it long enough, they finally embrace it, and become influenced by it." This is the equivalent of saying that any impulse of thought which is repeatedly passed on to the subconscious mind is, finally, accepted and acted upon by the subconscious mind, which proceeds to translate that impulse into its physical equivalent, by the most practical procedure available... All down the ages, the religionists have admonished struggling humanity to "have faith" in this, that, and the other dogma or creed, but they have failed to tell people HOW to have faith. They have not stated that 'faith is a state of mind, and that it may be induced by self-suggestion.' The basis of Christianity is FAITH, no matter how many people may have perverted, or misinterpreted the meaning of this great force, and no matter how many dogmas and creeds have been created in its name, which do not reflect its tenets. The sum and substance of the teachings and the achievements of Christ, which may have been interpreted as "miracles," were nothing more nor less than FAITH. If there are any such phenomena as "miracles" they are produced only through the state of mind known as FAITH! Some teachers of religion, and many who call themselves Christians, neither understand nor practice FAITH..." Although he uses Christianity as an example, Hill describes the method and action of faith based on what it actually is. It is something that is a step above simple belief. It is also very specific. One cannot have faith in a "blanket" way, because faith is a very unique state of mind that can only come about through effort, singularity of purpose, and the absence of fear. Faith itself is the reason for all success or great acheivement. Faith itself is a great and mysterious power that should be revered, but instead it is co-opted by organized religion and obscured by hiding it in plain sight. They tell you to pray, and tell you what you should be saying. This short-circuits faith from the get-go. Faith does not respond to demands, it only enters the mind that has been prepared to receive it. Prayer is merely a means of auto-suggestion, but when done properly, holds the key to the power back of religion. Why does mankind worship in the first place? Because humans are aware of greater forces than they can comprehend. Some humans figured out long ago that by co-opting these forces through claiming knowledge or communication with the forces, they gained the reverence of other humans, and through reverence, power and control in the name of a greater power. They harnessed the power of faith for their own ends. So it remains today. The truth is that "faith" does not belong to anyone, but is available to everyone. It supports all religions, but is a part of none. It's not something you can have a little of, nor is it a general state of mind. By using symbols and deities, the nature of faith is distorted. It is much more specific and takes much more effort to attain than "belief." As Hill said, Christ was really teaching about pure faith. He was not endorsing a new brand of God, and the real miracle of Christ is that enough of his true message has remained through all the distortions to allow anyone to understand what he was saying at all. He discovered the nature and method of faith, that it takes effort and elimination of negative emotions to work for positive ends. He did not believe in his own greatness, saying men will be able to do greater things than He did - because he had just come upon this discovery of faith, and its specific nature. Gandhi serves as a recent historical example applying the principles that Christ taught. He used faith for a specific purpose at a specific moment, and induced the minds of 200 Million Indians to move together as a single mind, and by so doing, gained India's independence. Anyone who tries to get even 2 people to work together for any period finds it a distinct challenge. He brought together 200 Million Indians, both Hindu and Moslem, without the things that other leaders have. He didn't have a military-industrial complex, or billions of dollars, he didn't even own a suit of clothes. But he demonstrated real power through the application of pure faith. It has nothing to do with believing in a symbol or a deity. It is, however, the same force that gives these things their power. It is our direct-dial connection to the power we endow our gods with. And it is available to all of us. It is little wonder then, that the true nature and method of faith is vigorously obscured by those who love power over other humans, and that it remains a subject about which so little is truly understood.

A Quick Neo-Conservative Primer

2005-10-28T11:13:00.000-07:00

A Word about Neo-cons and Neo-libs from politicalcompass.org U.S.neo-conservatives, with their commitment to high military spending and the global assertion of national values, tend to be more authoritarian than hard right. By contrast, neo-liberals, opposed to such moral leadership and, more especially, the ensuing demands on the tax payer, belong to a further right but less authoritarian region. Paradoxically, the "free market", in neo-con parlance, also allows for the large-scale subsidy of the military-industrial complex, a considerable degree of corporate welfare, and protectionism when deemed in the national interest. These are viewed by neo-libs as impediments to the unfettered market forces that they champion. "Should any political party attempt to abolish social security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear of that party again in our political history. There is a tiny splinter group, of course, that believes you can do these things. Among them are H. L. Hunt (you possibly know his background), a few other Texas oil millionaires, and an occasional politician or business man from other areas. Their number is negligible and they are stupid." - President Dwight D. Eisenhower , in a letter to his brother Edgar on November 8, 1954 Two said oil millionaires: CONSERVATIVE: To occupy Iraq would instantly shatter our coalition, turning the whole Arab world against us and make a broken tyrant into a latter-day hero ... assigning young soldiers to a fruitless hunt for a securely entrenched dictator and condemning them to fight in what would be an un-winnable urban guerilla war. It could only plunge that part of the world into even greater instability. -- George Bush Snr, in A World Transformed, 1998 NEOCONSERVATIVE: "Bring 'em on" - George Bush Jr. 2003

Needless Encumbrance

2005-10-26T01:54:00.000-07:00

I read an article not too long ago mentioning that a large number of people talking on cell phones were not actually on a call. They were talking to themselves, either to "look cool" or avoid conversation with those around them. If you're like me, every time you see a chatty cell phone converser, you begin speculating : Is that person talking to him/herself? I stood in front of the library this afternoon, thinking that if I had a cell phone, I could talk to myself in public with impunity. It'd be good fun. The problem is, I'm just not a "cell-phone guy." It's not that I'm a square, or old-fashioned, I simply enjoy a life free of needless encumberance This unencumbered freedom began when I was a mobile repair technician. From time to time, I would carry a beeper, which always demanded my attention at inopportune moments. When my boss dropped it on the concrete one afternoon, my life changed. I cannot overemphasize the difference, the peace and serenity that moved in once the beeper moved out. I never inquired about when the beeper would be repaired, and I never missed it. Since then, I've watched the cell phone culture from a distance as it's grown. I don't really feel like I'm missing out. I find it hard enough to hear what's going on in my head without adding more voices.

The Duty of Dissent

2005-10-25T20:03:00.000-07:00

Dissent is more than an American right, it is a duty. America has risen to its prominent place in the world in a relatively short time because of our freedom to allow for various positions and ideas. The founders of this country built this right into the canon law. Any efforts to stop or otherwise interfere with discourse or dissent, and not dissent itself, is what is unpatriotic. "My country, right or wrong" is not patriotism. Theodore Roosevelt said "To announce that there must be no criticism of the president... is morally treasonable to the American public." Those Americans who protest the war in Iraq are every bit as American as those who support the war. One's political position, whether left, right, or center, is irrelevent. They all have, by virtue of the sacrifices of those who came before them, the ability to speak their minds openly. The proposal from one side to interfere with the other's right to speak their collective minds via infiltration, or disruption is for the lack of a better word, un-American. Whichever group receives orders or encouragement to do something like this would do right to consider the motives of whomever is doing the encouraging. The people in power (and I'm not talking about a political party) in any country know the only way to stay in power is to keep the masses fighting amongst themselves while they pursue their own interests. Right, left, Democrats, Republicans, conservatives, liberals, right-wing, left-wing, communists, imperialists, all of these labels are merely wedges driven between people to draw attention away from the real evil that exists in the world. It's not Osama bin Laden, nor is it George W. Bush. These are merely faces, fronts for something else, for which we all need to look deeper. Americans, and citizens of the world need to consider this. Look around you. Your neighbors are not the enemy. Even if you aren't on good terms with them, if their house was burning down, you would help them because you know you may need them to do the same for you. Labels are meaningless. Above it all, we are human beings. To paraphrase Sting, we have the same biology, regardless of ideology.

In America, we need to realize what 9/11 means, regardless of "who did it." We have all been attacked, but we are made to believe that we are each other's enemy. The divisive political climate of this country only serves the power structure that we cannot see. I for one, believe that anyone who wants to say anything should not be shy about doing so. It is only through talking about issues freely that we can come to any mutual understanding. It is not patriotic to allow your thoughts and actions to be dictated for you. Freedom is not free. Its price is its exercise.

Yes, there are things we don't like to hear, or even want to hear, but as J.S. Mill said: "We can never be sure that the opinion we are endeavoring to stifle is a false opinion; and if we were sure, stifling it would be an evil still."

Making Tax Reform Clear

2005-10-24T11:08:00.000-07:00

When considering changes to the tax system, Independent Americans need to be the voice of reason. Partisan political perspectives continue to cloud the issue, as those in office and those seeking office have an overriding motive to present solutions that are “simple.” The problem with “simple” solutions is that they don’t exist. The lack of substance in these proposals is easy to see for those who do not cling to political party loyalty above loyalty to our country, and it is the Independent mission to provide “simple” explanations of proposed “simple” solutions.

In the case of taxation, the debate focuses on who pays, how they pay, and the benefits to the economy. The “flat tax” perspective believes in applying an across-the-board tax on goods and services, paid by consumers, and claiming that the economy will be improved by lowered prices relative to the elimination of taxes on business and industry, as well as increased investment in expansion and job creation. The “income tax” perspective believes in applying an incremented rate of taxation on all personal and business income, claiming to improve the economy by distributing the tax burden proportionally and offering credits and/or exemptions to businesses and individuals who spend money on things deemed beneficial to society, such as providing jobs to disadvantaged people, or donating to charitable organizations that provide help to the disadvantaged.

Each side claims that the other will harm the economy, or is “unfair,” usually according to party platform. The right-wing, conservative side leans toward plans that lower and eliminate taxation on wealthier Americans and corporations. The underlying belief is that such taxes “penalize” the hard work and success of those who have earned more money, and that allowing this group to keep more money will prompt them to do more of what they did to get where they are. The left-wing, liberal view is that taxes should be paid proportional to income, i.e. higher incomes pay a higher rate of taxes than lower income levels do. The underlying belief is that this allows for a more equal distribution of wealth, and grows the economy through strengthening the system that allowed the wealthy to become that way, encouraging and helping more people to do more of the types of business building and investing that the wealthy have done.

Is one side right and the other wrong? No. There is logic on both sides that appeals to the Independent-minded. So, what mental heuristics can help the Independent and Undecided sort out the best direction? I.A. has a short list of questions to keep in mind that can help anyone test the soundness of any plan.

What drives a country’s economy?
What does the plan propose be taxed?
Upon which economic force does the tax apply, the driving force or the non-driving force?
What effects could taxing this force have on the economy?
Would these effects promote growth or stagnation, given that most people take steps to reduce the amount of taxes they pay?

Tax reformers would do best to honestly answer these questions in their proposals. These are the only simple truths that give one plan merit over another. Charts, figures, percentages and arguments steeped in bad logic and appeals to emotion serve only to confuse and deceive. Answers to these questions will quickly help any American cut through the smoke and mirrors, and expose the true intent and merit of any tax plan.

Please share this list with everyone you know when discussing taxes. The economic future of America depends on every American’s understanding of the simple facts that underlie the larger issues. I.A. will remain vigilant in its efforts to contribute to this in every way possible.

Got Wealth?

2005-10-23T15:28:00.000-07:00

Few Americans do not dream of becoming wealthy. Many people see the acquisition of wealth as the one true way to become free, fulfilled, and “happy.” Belief in the positive effects of wealth is nearly universal, and the pursuit of financial abundance is a common lifetime mission in America. Entire industries have been built to capitalize on Americans’ opulent ambitions. A myriad of companies exist solely to produce a never-ending and readily available supply of educational information about ways and means of “getting rich.” There are books, seminars, financial service companies, and folk wisdom dispensed by overcaffeinated financial gurus. Above all, there is the everlasting “American Dream” of upward social mobility. In the 19th Century, author Horatio Alger popularized the “American Dream.” The moral of Alger’s stories spoke of hard work, square dealing, and good character as keys to attaining the “American Dream.” In the 21st Century, author Suze Orman writes financial self-help books such asThe Courage to Be Rich, and in it, she claims that an individual’s negative emotions block the acquisition of wealth. The chances at present are greater that average Americans will become poorer rather than wealthier, regardless of how hard and long they work, or how they feel about money.

Indeed. Congressman Bernard Sanders of Vermont states, “Between 1983 and 1995, the inflation-adjusted net worth of the top 1% of the U.S. population grew by 17%, while the bottom 40% of American families lost 80% of their worth (12).” Despite working longer hours and boosting productivity levels, Americans continue to lose not only net worth, but also benefits and the world prominence enjoyed by previous generations. In 2003, the Center for Economic & Policy Research, a Washington think tank, determined that in the 1990s, average workers’ annual hours increased from 1,783 to 1,878, while annual wages increased only 0.5% after inflation. The United States, once the economic leader of the free world, now:

Ranks below six other countries in annual income per person.
[Has an] income gap between rich and poor … bigger than in any other developed country in the world.
Ranks below 11 other countries in pay and benefits for manufacturing workers.
[Has} low wage workers … [who] are the lowest paid workers in the industrialized world.
[ has]...the highest rate of childhood poverty among any industrialized nation(list from Sanders).

No group of workers has been immune to the worsening conditions. Ninety percent of young white male workers (traditionally the highest paid group of workers) are now doing worse than they would have 20 years ago. The “American Dream” is becoming an American nightmare.

The problem of lower wages among workers is exacerbated by a lack of financial knowledge, also known as “financial illiteracy.” The National Endowment for Financial Education examined this problem in October 2002 at a symposium titled: The State of Financial Literacy in America—Evolutions and Revolutions. The executive summary of the resulting 15,000+ word white paper states:

…Research shows that a large percentage of people of all ages, incomes and education levels lack the basic financial knowledge and skills to ensure long-term stability for themselves and their families. Numerous organizations offer research, insight, and partial solutions, but there is no unified approach, no universally acknowledged financial literacy agenda.

The reality of widespread financial illiteracy is unquestionable. Individual debt loads and bankruptcy filings are at all-time high levels, while rates of savings are at all time low levels. At the same time, Americans are bombarded with media messages encouraging mass consumption and an economy that “…appears structured to minimize conscious thought or financial independence on the part of individual consumers, while also draining them in every conceivable way money-wise…[what’s more,] many Americans don't have a clue about what comprises real wealth in the USA (Mooneyham).” The “American Dream” is no longer just an idyllic vision of happiness. It is a promise of freedom from economic slavery that, unfortunately, few can define or recognize. How then, can “wealth” be defined, and what are an average American’s true chances of acquiring it?

True financial wealth can be defined as the minimal income required allowing for a living standard far higher than that afforded by an average income, without requiring that the recipient work for a living, and after any applicable taxes are paid. J.R. Mooneyham estimates that “a household or family with an annual income at least ten times that of the average…qualifies as rich in America today…'rich' will… be considered to be $400,000 in annual income that'll come in regardless of whether anyone in the family is holding a paying job or not.” The average purchasing power parity in 2004 in the U.S. was $40,100, with the lowest 10% accounting for 1.8% of income and the top 10% accounting for 30.5% of income (The World Factbook). Gross household income of $400,000 per year is then a highly reasonable base for defining where the “wealthy” level begins, as the amount remaining after taxes still places the household above the highest level earned by the middle class – all without having to work. What’s more, 99% of American households earn less than $374,000 (Cox), placing the $400,000-and-up crowd in the top 1% of American households. Within that 1% lay 38% of American household wealth (Hutton), and a world many would have difficulty conceiving of in the first place. A 2000 ABC poll which asked Americans how high of an income they believed would qualify them as “rich” concluded “Most Americans say a tidy $200,000 a year would do just fine — and a plurality would settle for $100,000(qtd. by Mooneyham)"

The difficulty in defining “wealth” for average Americans is partly due to political doubletalk and questionable government reporting of statistics. According to Michael Parenti, until 1994, the U.S. Census did not gather the same information on households with incomes above $300,000 as they did for households at lower income levels. In 1994, the bar was raised to households with incomes over $1 million, meaning that those households were excluded from many economic reports and analyses (3). This downward shifting of the scale gives an inaccurate picture of Americans’ relative financial status, which is verified by the U.S. Census’s Survey of Income and Program Participation (SIPP) methodology description:

The distribution of wealth in the United States has a large positive skew, with relatively few households holding a large proportion ofthe wealth…a household survey should heavily oversample wealthy households to obtain a better representation of the less commonly held assets…the Survey of Consumer Finances (SCF), conducted by the Federal Reserve Board, oversamples households likely to be wealthy. SIPP, however, does not oversample wealthy households (indeed, it oversamples lower-income households), and its estimates of average net worth and total aggregate net worth are significantly lower than the estimates from the SCF… average or mean net worth in 1998 from SIPP was $149,629 (in 1998 dollars), compared with $282,500 (in 1998 dollars) from the SCF. The two surveys’ estimates of median household net worth for the same year were substantially different from each other but much closer: $47,887, and $71,600, respectively.

A direct comparison of median net worth between the skewed U.S. Census report and the more inclusive Federal Reserve report illustrates why many upper-middle class Americans consider themselves the actual “wealthy,” when their average income places them solidly in the middle class. For 1998, the U.S. Census claims a median net worth of $161,174 for the highest 20% of households (Net Worth and Asset Ownership), whereas the Federal Reserve reports a median net worth of $1,019,000 for the highest 20% of households (Evidence from the 1998 and 2001 Survey of Consumer Finances). Considering themselves “wealthy” despite a median income that averages 15% and less of that of the wealthy class, many lower-middle- and middle-class voters support pro-wealthy conservative politicians, believing they will reap the benefits of tax cuts and reduced social spending, when their income level actually excludes them from the lion’s share of the benefits. One of the strongest examples of this collective delusion was a 2000 Time magazine poll in which 19% of Americans said they are in the richest 1% and a further 20% expect to be someday.

The Republican political strategy of skewing statistics, perpetuating altered perceptions of class status and use of election rhetoric focused on red herring “values” issues such as gay marriage to divert attention from core economic issues has proven to be very cunning and difficult for centrist and socialist political parties to counter. The traditional left-wing voter base has been effectively split, as it has caused many working class voters to shift their support to the right. This has given the right a virtual lock on government control. In 2004, the Republican Party acquired control of the executive and legislative branches of American government for the first time since the 1920s, when their pro-wealthy government policies contributed to the Great Depression of the 1930s. Signs of a repeat performance are on the horizon, as numerous articles of legislation have been made into laws that greatly benefit wealthy corporations and individuals, such as tax cuts funded by future federal budget deficits, the pro-finance Bankruptcy Abuse Prevention and Consumer Protection Act, and the pro-energy company Energy Policy Act of 2005. The object of right-wing politics is not to create new wealthy Americans, but to enrich those who are already wealthy, and increase the difficulty level for all others to become wealthy as well.

Most Americans accept that building a fortune is difficult, and don’t expect it to come easy. Many appreciate; even admire the hard work of those who have done it. It is certainly possible to acquire great wealth, but what are an American’s statistical probabilities of actually becoming the next John D. Rockefeller? Of 2004’s new billionaires, 69 were from the U.S. (Kroll et al.), which has a population of 295,798,362 according to the U.S. Census. Calculated by Mooneyham, “the average person's chance of becoming a billionaire in the US in any particular year is about one in 4,286,933 (4.28 million) or 0.000000233”, or 233 billionths of one percent – difficult, but not impossible.

Who wants to be a millionaire? Who wants to marry a millionaire? These questions were asked of America’s television viewers, and millions faithfully tuned in to shows of the same name. The words “million” and “dollars” used in concert commonly evoke images of luxury, opulence, and wealth. Lottery jackpots and sweepstakes prizes in the millions of dollars promise the “good life” for their winners. Investment houses tout how their mutual funds will help investors retire as millionaires by regular investment. The probability is higher for becoming a millionaire than a billionaire, but to paraphrase J.P. Getty, a million dollars ain’t what it used to be. Having a few million dollars will make most folks relatively “well off,” but nowhere near the level of truly wealthy. Besides, there isn’t as much zip to a TV show title like “Who Wants to Be a 30-times-over Millionaire?”

The amount of investment capital needed to earn consistent interest returns of $400,000 per year (the minimum level to be considered “wealthy”), is between $30 and $35 million. The investment company Merrill-Lynch created the term “UHNWI”, or “Ultra High Net Worth Individuals”, for those with “investable” assets of more than $30 million (World Wealth Report-2001). J.R. Mooneyham, using the Merrill-Lynch estimates of 7% yearly UHNWI growth and proportionality of their numbers to the rest of the world, estimates that there are 1,365 Americans who attain this level annually, out of a U.S. population of 295,798,362. Combined with the number of new billionaires, this makes a total of 1,434 Americans who are truly “getting rich” each year. Therefore, a fair summary estimate of the odds for achieving the “American Dream” are one out of 206,275, or a 4.847 billionths of one percent chance.

The “American Dream” is perhaps more elusive than ever, and the commonly-held beliefs about how to attain wealth are being rendered obsolete. According to Michael Parenti, 50% of those in the “wealthy” category inherited their wealth, regardless of their feelings about money. Many state lottery winners have seen their lives collapse, and become worse than before millions of dollars magically came their way. Horatio Alger never mentioned the dark side of good, hard work, as J.R. Mooneyham points out that hard work and health problems that go with it has “thus far failed to make 99% of Americans rich, generation after generation after generation...” David Cay Johnston agrees:

In 1977, the richest 1 percent of Americans had as much to spend after taxes as the bottom 49 million. Just 22 years later, in 1999, the richest one percent — about 2.7 million people — had as much as the bottom 100 million Americans.

The “American Dream” will live as long as America itself does. The fact that it survives as strongly as it does today is a testament to that. The United States will only see its greatest days when hard-working Americans awaken from dreaming the American Dream, and begin building the prosperous American reality they have rightfully earned.

Resources Consulted

Bernhardt, Annette, et al. Divergent Paths. N.p.: Russell SageFoundation, 2001. 64-150. Braham, Lewis. "No Rest for the Productive." BusinessWeek 9 Jul 2003. 10 May 2005 <http://www.businessweek.com/bwdaily/dnflash/jul2003/nf2003079_3133_db042.htm>. Cox, Stan. "Astronomical Incomes." AlterNet. 31 July 2003. 25 Apr. 2005 <http://www.alternet.org/story/16515>. Cruz, Humberto. "The Savings Game." The Eugene Register Guard 5 May 2003. 25 Apr 2005 <http://www.registerguard.com/news/2003/05/05/f3.bz.cruz.0504.html> Dionne, E.J. . "Low-Income Taxpayers: New Meat for the Right." The Washington Post 26 Nov 2002. 25 Apr 2005 http://www.washingtonpost.com/ac2/wp-dyn?pagename=article&contentId=A39211-2002Nov25&notFound=true "Evidence from the 1998 and 2001 Survey of Consumer Finances." 24 Feb. 2003. Federal Reserve Board. 16 May. 2005 <http://www.federalreserve.gov/pubs/oss/oss2/2001/bull0103.pdf>. <http://www.census.gov/prod/2003pubs/p70-88.pdf>. Financial Literacy in America: Individual Choices, NationalConsequences. Oct. 2002. National Endowment for FinancialEducation. 13 May 2005<http://www.nefe.org/pages/whitepaper2002symposium.html>. Hutton, Will. "Log Cabin to White House? Not Anymore." The Observer 28 Apr 2002: Johnston, David Cay. "Perfectly Legal (Book Excerpt)." Thinking Peace. 17 May. 2005 <http://www.thinkingpeace.com/Lib/lib056.html>. Kroll, Luisa , and Lea Goldman. "The World's Billionaires." Forbes.com 10 Mar 2005. 16 May 2005 <http://www.forbes.com/billionaires/>. Mooneyham, J.R. "The super-rich, the 'plain' rich, the 'poorest' rich." WebFlux. 19 Oct. 2003. 15 May. 2005 <http://www.jmooneyham.com/rich-reference.html#section4>. Net Worth and Asset Ownership. 2003. U.S. Department of the Census. 16 May. 2005 Parenti, Michael. The Super Rich Are Out of Sight. 27 Dec. 2002.Common Dreams. 13 May 2005<http://www.commondreams.org/views02/1227-06.htm>. Sanders, Hon. Bernard. "Working Families." Working Families in the Global Economy. U.S. House of Representatives. 10 May. 2005 <http://bernie.house.gov/economy/today.asp>. The World Factbook. 21 Apr. 2005. Central Intelligence Agency. 15 May. 2005 <http://www.cia.gov/cia/publications/factbook/geos/us.html#Econ>. "World Wealth Report - 2001." Merrill-Lynch. 17 May. 2005 <http://www.ml.com/about/press_release/pdf/05142001_worldwealthreport2001.pdf>.

How Fair Is The Fair Tax?

2005-10-22T23:48:00.001-07:00

There have been many proposals to overhaul the U.S. federal tax system, and one that is getting a good deal of attention is the FairTax plan, which is currently known as House Resolution 125. The FairTax plan proposes a repeal of income taxes in favor of a 23% sales tax applied to all goods and services. It differs from previously proposed “flat tax” systems by eliminating the IRS, and offering a monthly “prebate” of sales taxes based on the Federal Poverty Level and the estimated cost of basic necessities for those below this income level. The intent is to create a progressive tax system that doesn’t require that lower-income households pay a larger percentage of their income in taxes compared to wealthy households. The plan’s simplicity is its main selling point. Americans for Fair Tax, the organization advocating the FairTax plan, emphasizes simplicity on their web site, fairtax.org:

Everyone Agrees! The current Federal income tax system is broken. Patching up the existing code is pointless. It's time for a fresh approach, a fair approach.It's time for the FairTax. Simply put, the FairTax replaces the way we're currently taxed - based on our annual income - with a tax on goods and services. The FairTax is a voluntary “consumption" tax: the more you buy, the more you pay in taxes, the less you buy, the less you pay in taxes. It's simple. Everyone pays their fair share of taxes, and with the FairTax rebate, spending up to the poverty level is tax free. The Federal government is fully funded, including Social Security and Medicare, and you don't need an expert to determine your Federal taxes. It's simple.

Yes, simplicity rules the day for Americans for Fair Tax (AFFT), and other professed grassroots organizations which seem to repeat the same “simple” message: Repeal the Income Tax and replace it with a national “sales tax.” Many Americans would welcome a little relief in the tax department, so what does the FairTax plan offer? What follows are a few questions which anyone should ask about a new tax plan, how the AFFT FAQ answers them (FTFAQ), the relevant passages from the text of H.R. 25 (H.R. 25), and commentary on what the answers reveal (I.A. Comment).

Upon what does the new tax plan impose taxation?

FTFAQ: “…new goods and services for personal consumption. Used items are not taxed. Business-to-business purchases for the production of goods and services are not taxed.”

H.R. 25: SEC. 2 `(14) TAXABLE PROPERTYOR SERVICE- `(A) GENERAL RULE- The term `taxable property or service' means-- `(i) any property (including leaseholds of any term or rents with respect to such property) but excluding-- `(I) intangible property, and `(II) used property, and `(ii) any service (including any financial intermediation services as determined by section 801). (B) SERVICE- For purposes of subparagraph (A), the term `service'-- `(i) shall include any service performed by an employee for which the employee is paid wages or a salary by a taxable employer, and `(ii) shall not include any service performed by an employee for which the employee is paid wages or a salary-- `(I) by an employer in the regular course of the employer's trade or business, `(II) by an employer that is a not-for-profit organization (as defined in section 706), `(III) by an employer that is a government enterprise (as defined in section 704), and `(IV) by taxable employers to employees directly providing education and training. SEC. 102 `(a) In General- For purposes of this subtitle-- `(1) BUSINESS AND EXPORT PURPOSES- No tax shall be imposed under section 101 on any taxable property or service purchased for-- `(A) a business purpose in a trade or business, or `(B) export from the United States for use or consumption outside the United States, if, the purchaser provided the seller with a registration certificate, and the seller was a wholesale seller. `(2) INVESTMENT PURPOSE- No tax shall be imposed under section 101 on any taxable property or service purchased for an investment purpose and held exclusively for an investment purpose. `(3) STATE GOVERNMENT FUNCTIONS- No tax shall be imposed under section 101 on State government functions that do not constitute the final consumption of property or services. `(b) Business Purposes- For purposes of this section, the term `purchased for a business purpose in a trade or business' means purchased by a person engaged in a trade or business and used in that trade or business-- `(1) for resale, `(2) to produce, provide, render, or sell taxable property or services, or `(3) in furtherance of other bona fide business purposes. `(c) Investment Purposes- For purposes of this section, the term `purchased for an investment purpose' means property purchased exclusively for purposes of appreciation or the production of income but not entailing more than minor personal efforts. SEC 901 (a) Intangible Property Antiavoidance Rule- Notwithstanding section 2(a)(14)(a)(i), the sale of a copyright or trademark shall be treated as the sale of taxable services (within the meaning of section 101(a)) if the substance of the sales of copyright or trademark constituted the sale of the services that produced the copyrighted material or the trademark. `(b) De Minimis Payments- Up to $400 of gross payments per calendar year shall be exempt from the tax imposed by section 101 if-- `(1) made by a person not in connection with a trade or business at any time during such calendar year prior to making said gross payments, and `(2) made to purchase any taxable property or service which is imported into the United States by such person for use or consumption by such person in the United States. `(c) De Minimis Sales- Up to $1,200 per calendar year of gross payments shall be exempt from the tax imposed by section 101 if received-- `(1) by a person not in connection with a trade or business during such calendar year prior to the receipt of said gross payments; and `(2) in connection with a casual or isolated sale. `(d) De Minimis Sale of Financial Intermediation Services- Up to $10,000 per calendar year of gross payments received by a person from the sale of financial intermediation services (as determined in accordance with section 801) shall be exempt from the tax imposed by section 101. The exemption provided by this subsection is in addition to other exemptions afforded by this chapter. The exemption provided by this subsection shall not be available to large sellers (as defined in section 501(e)(3)). `(e) Proxy Buying Taxable- If a registered person provides taxable property or services to a person either as a gift, prize, reward, or as remuneration for employment, and such taxable property or services were not previously subject to tax pursuant to section 101, then the provision of such taxable property or services by the registered person shall be deemed the conversion of such taxable property or services to personal use subject to tax pursuant to section 103(c) at the tax inclusive fair market value of such taxable property or services. `(f) Substance Over Form- The substance of a transaction will prevail over its form if the transaction has no bona fide economic purpose and is designed to evade tax imposed by this subtitle. `(g) Certain Employee Discounts Taxable- `(1) EMPLOYEE DISCOUNT- For purposes of this subsection, the term `employee discount' means an employer's offer of taxable property or services for sale to its employees or their families (within the meaning of section 302(b)) for less than the offer of such taxable property or services to the general public. `(2) EMPLOYEE DISCOUNT AMOUNT- For purposes of this subsection, the employee discount amount is the amount by which taxable property or services are sold pursuant to an employee discount below the amount for which such taxable property or services would have been sold to the general public. `(3) TAXABLE AMOUNT- If the employee discount amount exceeds 20 percent of the price that the taxable property or services would have been sold to the general public, then the sale of such taxable property or services by the employer shall be deemed the conversion of such taxable property or services to personal use and tax shall be imposed on the taxable employee discount amount. The taxable employee discount amount shall be-- `(A) the employee discount amount, minus `(B) 20 percent of the amount for which said taxable property or services would have been sold to the general public.

I.A. Comment: The FTFAQ chooses a simple answer, and the bill text backs it but brings up other issues. Anything an individual buys is taxed. Business purchases are not taxed, nor are purchases made for investment purposes that are not “entailing more than minor personal efforts.” This could mean gold, jewelry, art, and the like. There is also a provision for gifts, awards, or prizes from a “registered person" that requires the conversion to personal use, subject to tax. There’s clearly more to the story.

Does the new plan impose or otherwise require taxes to be paid on basic necessities of life, such as food, clothing, shelter, or vital utilities such as heating fuel, water, or electricity?

FTFAQ: “Exempting items by category is neither fair nor simple. Respected economists have shown that the wealthy spend much more on unprepared food, clothing, housing, and medical care than do the poor. Exempting these goods, as many state sales taxes do, actually gives the wealthy a disproportionate benefit. Also, today these purchases are not exempted from federal taxation. The purchase of food, clothing, and medical services is made from after-income-tax and after-payroll-tax dollars, while their purchase price hides the cost of corporate taxes and private sector compliance costs. Finally, exempting one product or service, but not another, opens the door to the army of lobbyists and special interest groups that plague and distort our taxation system today. Those who have the money will send their lobbyists to Washington to obtain special tax breaks in their own self-interest. This process causes unfair and inefficient distortions in our economy and must be stopped.” “Because the 23-percent FairTax rate of $0.23 on every dollar spent is not imposed on necessities, an individual spending $28,808 pays an effective tax rate of only 15.6 percent, not 23 percent.”

I.A. Comment: This explanation makes no sense, and uses a Straw Man argument to cowardly evade the issue. The truth is actually quite simple, but if stated would expose the Fair Tax plan for what it really is, and how stupid the plan’s proponents believe the average American is. More on this in a moment.

Who is ultimately liable for paying the tax, and how does the new tax plan determine and enforce compliance?

FTFAQ: (No Specific Mention)

H.R. 25: SEC 101 (d) Liability for Tax- `(1) IN GENERAL- The person using or consuming taxable property or services in the United States is liable for the tax imposed by this section, except as provided in paragraph (2) of this subsection. `(2) EXCEPTION WHERE TAX PAID TO SELLER- A person using or consuming a taxable property or service in the United States is not liable for the tax imposed by this section if the person pays the tax to a person selling the taxable property or service and receives from such person a purchaser's receipt within the meaning of section 510. SEC.103 `(a) Liability for Collection and Remittance of the Tax- Except as provided otherwise by this section, any tax imposed by this subtitle shall be collected and remitted by the seller of taxable property or services (including financial intermediation services). `(b) Tax to Be Remitted by Purchaser in Certain Circumstances- `(1) IN GENERAL- In the case of taxable property or services purchased outside of the United States and imported into the United States for use or consumption in the United States, the purchaser shall remit the tax imposed by section 101. `(2) CERTAIN WAGES OR SALARY- In the case of wages or salary paid by a taxable employer which are taxable services, the employer shall remit the tax imposed by section 101. `(c) Conversion of Business or Export Property or Services- Property or services purchased for a business purpose in a trade or business or for export (sold untaxed pursuant to section 102(a)) that is subsequently converted to personal use shall be deemed purchased at the time of conversion and shall be subject to the tax imposed by section 101 at the fair market value of the converted property as of the date of conversion. The tax shall be due as if the property had been sold at the fair market value during the month of conversion. The person using or consuming the converted property is liable for and shall remit the tax. SEC. 506. BURDEN OF PERSUASION AND BURDEN OF PRODUCTION. `In all disputes concerning taxes imposed by this subtitle, the person engaged in a dispute with the sales tax administering authority or the Secretary, as the case may be, shall have the burden of production of documents and records but the sales tax administering authority or the Secretary shall have the burden of persuasion. In all disputes concerning an exemption claimed by a purchaser, if the seller has on file an intermediate sale or export sale certificate from the purchaser and did not have reasonable cause to believe that the certificate was improperly provided by the purchaser with respect to such purchase (within the meaning of section 103), then the burden of production of documents and records relating to that exemption shall rest with the purchaser and not with the seller. SEC 508 (a) Summons- Persons are subject to administrative summons by the sales tax administering authority for records, documents, and testimony required by the sales tax administering authority to accurately determine liability for tax under this subtitle. A summons shall be served by the sales tax administering authority by an attested copy delivered in hand to the person to whom it is directed or left at his last known address. The summons shall describe with reasonable certainty what is sought. `(b) Examinations and Audits- The sales tax administering authority has the authority to conduct at a reasonable time and place examinations and audits of persons who are or may be liable to collect and remit tax imposed by this subtitle and to examine the books, papers, records, or other data of such persons which may be relevant or material to the determination of tax due.

I.A. Comment: The buyer is responsible for paying the sales tax, and must keep documentation to prove that the tax was paid. In cases where business items are converted to personal use, the law seems to rely on citizen honesty to remit the tax. Sort of. The law provides for a telephone “tip” line and gives the sales tax authority extremely broad powers to audit anything a person has that the authority deems relevant. The IRS may be dismantled with this plan, but taxpayers face an even greater risk of personal audit, and must practice extreme diligence to protect themselves. If keeping W2 and 1099 forms organized is a chore, keeping receipts for every single purchase will be a full-time job…

Does the new tax plan appear focused on guaranteeing or increasing the Federal revenue base, or does it focus on shrinking it?

FTFAQ: “All it does is replace the current revenue source (narrow, regressive payroll taxes) with a new revenue source (broad, progressive sales taxes paid by all consumers). Additionally, research shows that consumption is a more stable revenue source than income.” HR 25: SEC. 1 (b) Purposes- The purposes of this subtitle are as follows: `(1) To raise revenue needed by the Federal Government in a manner consistent with the other purposes of this subtitle.

I.A. Comment: “Smaller Government” is obviously not a goal with this plan. “Progressive sales taxes” is only a meaningful term if the rate changes according to a schedule, e.g. $5 in personal goods may be taxed at 10%, but $5,000 in goods is taxed at 20%. If the rate is the same for everyone, by definition it cannot be progressive. See next question…

Does the new tax plan seek an even distribution of the tax burden, or does it shift the burden according to discriminatory factors such as income level, or entity status (individual, business, or church)?

FTFAQ: “A rebate makes the effective rate progressive…All valid Social Security cardholders who are U.S. residents receive a monthly rebate equivalent to the FairTax paid on essential goods and services, also known as the poverty level expenditures. The rebate is paid in advance, in equal installments each month. The size of the rebate is determined by the Department of Health & Human Services’ poverty level multiplied by the tax rate. This is a well-accepted, long-used poverty-level calculation that includes food, clothing, shelter, transportation, medical care, etc. Under the FairTax plan, poor people pay no net FairTax at all up to the poverty level! Every household receives a rebate that is equal to the FairTax paid on essential goods and services, and wage earners are no longer subject to the most regressive and burdensome tax of all, the payroll tax. Those spending at twice the poverty level will pay a tax of only 11.5 percent – a rate much lower than the income and payroll tax burden they bear today.”

HR 25: (d) Annual Registration- In order to receive the family consumption allowance provided by section 301, a qualified family must register with the sales tax administering authority in a form prescribed by the Secretary. The annual registration form shall provide-- `(1) the name of each family member who shared the qualified family's residence on the family determination date, `(2) the Social Security number of each family member on the family determination date who shared the qualified family's residence on the family determination date, `(3) the family member or family members to whom the family consumption allowance should be paid, `(4) a certification that all listed family members are lawful residents of the United States, `(5) a certification that all family members sharing the common residence are listed, `(6) a certification that no family members were incarcerated on the family determination date (within the meaning of subsection (l)), and `(7) the address of the qualified family. Said registration shall be signed by all members of the qualified family that have attained the age of 21 years as of the date of filing. `(e) Registration not Mandatory- Registration is not mandatory for any qualified family. `(f) Effect of Failure to Provide Annual Registration- Any qualified family that fails to register in accordance with this section within 30 days of the family determination date, shall cease receiving the monthly family consumption allowance in the month beginning 90 days after the family determination date.

I.A. Comment: The rebate is based on the cost of necessities calculated for the poverty level for a given family size. Seems to make sense, but is not grounded in reality. What is touted as the element to make an otherwise regressive tax become progressive is more deception. The rebate is calculated according to an average that does not take cost of living differences into account, or even sales and income taxes that already exist in the states. The rebate, while offsetting a portion of the tax, will be taxed when it is spent. It is a bit reminiscent of the “free money” that casinos give to gamblers as comps. They give this money knowing full well they’ll get it back, and then some. The "prebate" is nothing more than a bribe, a consolation gift for being forced to literally pay ALL of the taxes!

What are the motivations for creating the new tax plan? Who does the plan ultimately benefit and why? Does it translate to a net benefit for individuals, businesses, or the economy at large and how so?

FTFAQ: “Like all federal spending programs, Social Security operates exactly as it does today, except that its funds come from a broad, progressive sales tax, rather than a narrow, regressive payroll tax… the FairTax dramatically improves economic growth and wage rates for all, but especially for lower income families and individuals. In addition to receiving the monthly FairTax rebate, these taxpayers are freed from regressive payroll taxes, the federal income tax, and the compliance burdens associated with each. They pay no more hidden taxes on goods (averaging 22 percent) or services (averaging 25 percent), and used goods are tax free. As a group, seniors do very well under the FairTax. Low-income seniors are much better off under the FairTax than under the current income tax system. Corporations are legal fictions that have not, do not, and never will bear the burden of taxation. Only people pay taxes. Corporations pass on their tax burden in the form of higher prices to consumers, lower wages to workers, and/or lower returns to investors. The idea that taxing a corporation reduces taxes on, say the working poor, is a cruel hoax. A corporate tax only makes what the working poor buy more expensive, costs them jobs, lowers their lifestyle, or delays their retirement. Under the FairTax plan, money retained in the business and reinvested to create jobs, build factories, or develop new technologies, pays no tax. This is the most honest, fair, productive tax system possible. Free market competition will do the rest.”

HR 25: To promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national sales tax to be administered primarily by the States. SEC. 1 (b) Purposes- The purposes of this subtitle are as follows: `(1) To raise revenue needed by the Federal Government in a manner consistent with the other purposes of this subtitle. `(2) To tax all consumption of goods and services in the United States once, without exception, but only once. `(3) To prevent double, multiple, or cascading taxation. `(4) To simplify the tax law and reduce the administration costs of, and the costs of compliance with, the tax law. `(5) To provide for the administration of the tax law in a manner that respects privacy, due process, individual rights when interacting with the government, the presumption of innocence in criminal proceedings, and the presumption of lawful behavior in civil proceedings. `(6) To increase the role of State governments in Federal tax administration because of State government expertise in sales tax administration. `(7) To enhance generally cooperation and coordination among State tax administrators; and to enhance cooperation and coordination among Federal and State tax administrators, consistent with the principle of intergovernmental tax immunity.

I.A. Comment: “The idea that taxing a corporation reduces taxes on, say the working poor, is a cruel hoax.” The FairTax is thusly revealed for what it actually is: a plan to shift all taxation onto regular Americans who work for a living, and free corporations from all taxes. Or, put another way, it is a method for making supply-side economics a permanent reality. The only "cruel hoax" is the FairTax itself, as it masquerades as a plan to assist the lowerand middle classes. Read on…

Does the new tax plan address reducing, limiting, or eliminating the national debt (now nearly $8 Trillion)?

FTFAQ: (Nothing mentioned)

HR 25: (Nothing mentioned)

I.A. Comment: The debt is an issue that proponents of the Fair Tax spend time blaming on welfare, and propose solving by cutting funding for vital programs. Some advertise that we must help Hurricane Katrina victims by cutting the budget. I.A. would hope that those to whom “morals and values” matter will see how truly cold and heartless this is, and question the proponents' motives accordingly.

Does the new tax plan allow for changes to the rate of taxation in a flexible manner, a rigid manner, or have vulnerabilities that could allow for backdoor introduction of new taxes? Could it potentially be manipulated to provide favorable benefits to some and unfair punishment to others?

FTFAQ: “Yes, of course Congress can raise the FairTax rate just as it could raise the flat tax rate or can and does raise the income tax rate. And if we in the grassroots allow them to do it, shame on us! However, the FairTax is highly visible. And because there is only one tax rate, it will be very hard for Congress to adopt the typical divide-and-conquer, hide-and-disguise, strategy employed today to ratchet up the burden gradually, by manipulating the income tax code. Ultimately, the tax rate will be dictated by the size of government. If government gets larger, higher tax rates will be required. If government shrinks relative to the economy, then the tax rate will fall. After the first year, revenue is expected to rise because of the growth generated by this plan. At that time the American people, the Congress, and the President will have to decide whether to lower the tax rate, or to spend the additional revenue. The public must remain vigilant to ensure that the economic gains caused by the FairTax benefit the people and the causes they deem worthy.”

I.A. Comment: The tone of this is extremely artificial, evasive, and worst of all, a red herring. “We in the grassroots…” should be a telling sign that whoever is responsible for this explanation is not a member of the message’s intended audience. It is simply an evasion that is so obvious, it tries to make the audience feel guilty for a hypothetical situation that would be even further beyond their control than it is now. Politicians, on the whole, have proven that morals, values, or family issues are words that sound great at election time, but have no meaning when it comes time to get down to business. What matters to politicians is who can afford to buy their loyalty. Average Americans cannot compete with the corporations in this regard, and with the Fair Tax, these corporations, free from any taxation whatsoever, will have just that much more money to influence the politicians whom average Americans hire to represent them.

The backers of the FairTax and any other plan that claims the wealthy are overtaxed prefer that Americans overlook one important fact: The wealthy only became wealthy by using society, its people, and its services. The wealthy, no matter how hard they worked, did not, and could not do it alone. The money they made is not “theirs.” The theory that “hard work” will make you rich is worse than a theory, it’s a myth and a lie. If “hard work” alone creates wealth, why were there no millionaire slaves? The only way hard work alone can make you money is if you own a printing press.

The proponents who back tax cuts for the wealthy claim that by allowing the wealthy to keep more money they will automatically start expanding their businesses and creating jobs, because they want to make even more money. Problem: if the wealthy are already sufficiently rich enough to buy their way out of paying taxes, why would they bother going through the extra work of building and hiring when all they need do is spend a little more to simply collect money from consumers directly, through an increase in the sales tax maybe? The wealthy already own Boardwalk. The Fair Tax would give them Park Place as well, and extra money to put up hotels. The average American would be nothing more than a slave. Morals and values, indeed!