The next amendment that the Republican-Tea Party (RTP) wants to abolish is the 16th Amendment. The wording to this particular amendment is short and to the point. Here it is as follows:
XVI Amendment
The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.
In a nutshell, this amendment gives Congress the power and authority to collect income taxes on income earned from individuals, businesses and corporations. Through this amendment the Internal Revenue Service (IRS) was given the authority to collect taxes and to enforce tax laws.
For some strange reason which I cannot fathom, the RTP wants to abolish this amendment. There are even factions of the RTP that claim that the IRS is unconstitutional! How can that be? This amendment clearly states that income taxes can be collected and gives the authority to do so.
If this amendment is abolished eliminating income taxes, how exactly does the RTP propose to replace the revenues? You simply cannot eliminate revenue without having a means of replacing lost revenue. The government still has to function. As far as I know, no one in the RTP has answered this question.
Maybe we should take a look at how taxes were collected BEFORE 1913 when this amendment was ratified.
Prior to the 16th Amendment, there were three main types of taxes. There were poll taxes, tariffs and excise taxes.
Let’s start with poll taxes. A Poll Tax or Capitation Tax was a per head tax. Each individual had to pay this tax and it was uniform nationwide. These taxes quite often were collected at the polls on Election Day, hence the term Poll Tax. If you couldn’t pay the tax, you couldn’t vote. This was declared unconstitutional by the 24th Amendment in 1964.
Now let’s examine tariffs. Tariffs are taxes on imported goods. They serve two purposes. The first purpose is to raise revenue and the second purpose is to protect national business interests. That type of tariff is called a Protective Tariff.
A tariff was the first source of income for the United States. The Tariff Act of 1789 was the name of this act. Tariffs were also the main source of income for the US until the enactment of the 16th Amendment in 1913. Tariffs are still used today but to a lesser degree than what they were used in the past.
Collecting a tariff is relatively simple. When a ship enters port before they unload, they must pay a tariff on the goods being unloaded. If they didn't pay, then they couldn't unload. Very simple and efficient.
A Protective Tariff is another matter all together. These tariffs are set up to prevent cheap overseas products from flooding the market thus damaging the national economy. These tariffs are very political in nature and using them has always ignited intensive debate.
An Excise Tax is an indirect tax or an event tax. Examples of these are gasoline taxes, cigarette taxes, or alcohol taxes. Also, title transfer taxes, luxury taxes and inheritance taxes are also considered Excise Taxes.
The first Income Tax was imposed during the Civil War to help pay for the cost of the war. This was the Revenue Act Act of 1861 followed by the Revenue Act of 1862. This leveled the first Income tax. These acts were repealed in 1872.
In 1894, Income Tax was re established as part of the 1894 Tariff Act.
In 1895, the Supreme Court in ‘Pollock v. Farmers’ Loan & Trust Co.’ stated that the Income Tax was a direct tax and therefore impracticable and unconstitutional as currently collected. Due to this the Federal Government stopped collecting income taxes until the ratification of the 16th Amendment in 1913.
Now, if the RTP wants to maintain the government, how do they propose to do this? Protective tariffs cannot be utilized because they violate several trade agreements. NAFTA and GATT come to mind here plus there are several others.
What about Poll Taxes? They were declared unconstitutional in 1964 with the 24th Amendment. What else does that leave?
It’s simple. It leaves excise taxes. They will have to significantly increase the amount of excise taxes to adequately compensate for lost revenues and this will really damage our fragile economy.
The last tax that they could use is used virtually world wide but not in the United States. That is the Value Added Tax (VAT). The VAT is a consumption tax that is based on the estimated market value of a product at each level of production or distribution.
I don’t really think that the RTP would go for this because it is is similar to the flat tax proposal that gets floated around from time to time. Recent proponents are Mike Huckabee and Steve Forbes. There are no loopholes and the rich would not be able to avail themselves to any tax breaks. Anything you buy will have a VAT applied. No exceptions.
These radicals that are in the Republican Party are serious and they definitely intend to carry out their plans if they ever get into power. Be thankful that we have divided government with three coequal branches of government.
At the moment, the Democratic Party has control of the White House and the Republicans have both houses of the Congress. Be thankful that the president holds the veto pen because life would be much different if the Republicans we're in total control.
The presidential election is a long way off but because of what's involved I think that it is imperative to become involved in order to get another Democrat elected to the presidency or all of the good that President Obama has done will be for naught.
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