AMERICAN CONSERVATISM IN 2008 AND BEYOND

http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=US&vol=158&invol=601
We have considered the act only in respect of the tax on income derived from real estate, and from invested personal property, and have not commented on so much of it as bears on gains or profits from business, privileges, or employments, in view of the instances in which taxation on business, privileges, or employments has assumed the guise of an excise tax and been sustained as such.

Being of opinion that so much of the sections of this law as lays a tax on income from real and personal property is invalid, we are brought to the question of the effect of that conclusion upon these sections as a whole.

The court didn't look at an income tax on employment (wages) because it considered them excise taxes and constitutional.

in view of the instances in which taxation on business, privileges, or employments has assumed the guise of an excise tax and been sustained as such

Cooley (Tax'n, p. 3) says that the word 'duty' ordinarily 'means an indirect tax, imposed on the importation, exportation, or consumption of goods'; having 'a broader meaning than 'custom,' which is a duty imposed on imports or exports'; that 'the term 'impost' also signifies any tax, tribute, or duty, but it is seldom applied to any but the indirect taxes. An 'excise' duty is an inland impost, levied upon articles of manufacture or sale, and also upon licenses to pursue certain trades or to deal in certain commodities.'

Our conclusions may therefore be summed up as follows:

First. We adhere to the opinion already announced,-that, taxes on real estate being indisputably direct taxes, taxes on the rents or income of real estate are equally direct taxes.

Second. We are of opinion that taxes on personal property, or on the income of personal property, are likewise direct taxes.

Third. The tax imposed by sections 27 to 37, inclusive, of the act of 1894, so far as it falls on the income of real estate, and of personal property, being a direct tax, within the meaning of the constitution, and therefore unconstitutional and void, because not apportioned according to representation, all those sections, constituting one entire scheme of taxation, are necessarily invalid.

The decrees hereinbefore entered in this court will be vacated. The decrees below will be reversed, and the cases remanded, with instructions to grant the relief prayed. [158 U.S. 601, 638]

We have considered the act only in respect of the tax on income derived from real estate, and from invested personal property, and have not commented on so much of it(tax on income) as bears on gains or profits from business, privileges, or employments, in view of the instances in which taxation on business, privileges, or employments has assumed the guise of an excise tax and been sustained as such.

http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=US&vol=158&invol=601
We have considered the act only in respect of the tax on income derived from real estate, and from invested personal property, and have not commented on so much of it as bears on gains or profits from business, privileges, or employments, in view of the instances in which taxation on business, privileges, or employments has assumed the guise of an excise tax and been sustained as such.

Being of opinion that so much of the sections of this law as lays a tax on income from real and personal property is invalid, we are brought to the question of the effect of that conclusion upon these sections as a whole.

... This, of course, is a path that is easier spoken of than followed for, as has been mentioned before, many Americans are so used to government goodies that such largess is now viewed as 'rights'. It is this American conditional mind set that must be overcome and it is into this vein that fiscal conservatives must steer the Republican Party. Hopefully the Tea Party can be such a force.

A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves money from the public treasure. From that moment on, the majority always votes for the candidates promising the most money from the public treasury, with the result that democracy always collapses over loose fiscal policy followed by a dictatorship. The average of the world's greatest civilizations has been two hundred years. These nations have progressed through the following sequence: from bondage to spiritual faith, from spiritual faith to great courage, from courage to liberty, from liberty to abundance, from abundance to selfishness, from selfishness to complacency, from complacency to apathy, from apathy to dependency, and from dependency back to bondage.

Speaking to the Huffington Post shortly after his speech, (Representative Steve) King declared that a peaceful uprising, a la the successful overthrowing of the Communist Party of Czechoslovakia on the streets of Prague in 1989 "would be fine with me."

"Fill this city up, fill this city, jam this place full so that they can't get in, they can't get out and they will have to capitulate to the will of the American people," he said.

"So this is just like Prague under communist rule?" the Huffington Post asked.

"Oh yeah, it is very, very close," King replied. "It is the nationalization of our liberty and the federal government taking our liberty over. So there are a lot of similarities there."

Norman J. Ornstein
Hypocrisy: A Parliamentary Procedure

By Norman J. Ornstein
March 16, 2010, 4:24 pm

Any veteran observer of Congress is used to the rampant hypocrisy over the use of parliamentary procedures that shifts totally from one side to the other as a majority moves to minority status, and vice versa. But I can’t recall a level of feigned indignation nearly as great as what we are seeing now from congressional Republicans and their acolytes at the Wall Street Journal, and on blogs, talk radio, and cable news. It reached a ridiculous level of misinformation and disinformation over the use of reconciliation, and now threatens to top that level over the projected use of a self-executing rule by House Speaker Nancy Pelosi. In the last Congress that Republicans controlled, from 2005 to 2006, Rules Committee Chairman David Dreier used the self-executing rule more than 35 times, and was no stranger to the concept of “deem and pass.” That strategy, then decried by the House Democrats who are now using it, and now being called unconstitutional by WSJ editorialists, was defended by House Republicans in court (and upheld). Dreier used it for a $40 billion deficit reduction package so that his fellow GOPers could avoid an embarrassing vote on immigration. I don’t like self-executing rules by either party"I prefer the “regular order”"so I am not going to say this is a great idea by the Democrats. But even so"is there no shame anymore?

Being of opinion that so much of the sections of this law as lays a tax on income from real and personal property is invalid,

To those Democrats that feel it important that their party stay in power it is extremely important that they publicly compare the similarities between Obamacare and Romney care in MA. This Month the former Governor of MA had an appearance on Fox News, or two, where he defended his (Mitt's) Health Care program that he imposed upon the good citizens of MA and labled it "entirely different" from the President's current effort towards 'Health Care Reform'.

Seriously, the Democrats should hold the (presently) apparent GOP's 2012 Presidential nominee's feet to the fire on this. The MA law Mitt signed has many similarities to Obamacare. Why would the Dems not do so? On the one hand they could reason that a mainstream GOP member has passed a similar law to Obamacare and on the other they could use his signing of the MA RomneyCare bill against him and other establishment Republicans in future election campaigns. I really am surprised why Dems have not ridden this horse long and hard.

JM

http://www.investors.com/NewsAndAnalysis/Article.aspx?id=527490
Tax Fairness Reaches A Tipping Point
[from IBD = Investors Business Daily]
Fiscal Policy: The latest data show a record number of people with no tax obligation. We also have the highest-earning nontaxpayers ever. With more riding the wagon and fewer pulling, it should soon break down.

A record number of the 142 million tax returns filed in 2008 resulted in no taxes owed, according to the Tax Foundation's analysis of the latest IRS data. About 51.6 million returns, or 36.3%, were filed by those whose deductions, exemptions and tax credits wiped out any federal income-tax obligation.

These aren't people who have overpaid their taxes or had so much withheld from their paychecks that they'll get refunds. Those people owe taxes and merely provided the government with a zero interest loan until accounts are settled. These are people who pay no taxes at all.

There's been a 59% increase in the number of nonpayers since 2000, growing from 32.6 million in 2000 to 51.6 million in 2008. In the same period, the total tax filers grew by only 10%.

Not only are fewer people paying any taxes, but also the income levels for these nonpayers have steadily risen. A family of four earning more than $50,000 can have no income tax liability after taking the standard deduction and the child tax credit.

According to the Tax Foundation, "The major elements of the Economic Stimulus Act of 2008 boosted the maximum income for nonpayers to more than $56,700" " the highest ever.

The government has continually expanded the value of benefits such as the earned income tax credit to the point where you get a check from Uncle Sam even if you paid no taxes during the year. That's what made it so laughable when the administration claimed it was cutting taxes for most Americans when nearly 40% pay no taxes to start with. These are in essence welfare checks.

The tax code was originally intended to raise sufficient revenues to pay for the essential functions of government. It has morphed into a tool for social engineering, to incentivize or even punish certain behavior, and even to redistribute wealth. That's why we call it a "progressive" tax code.

We have applauded each time taxes have been cut, most recently under President George W. Bush.

We urge that these tax cuts not be allowed to expire this year as they are scheduled to do. That would be a huge tax increase at a time we can least afford it. But each cut has been obtained through deals removing more and more Americans from the tax rolls.

Tax Fairness Reaches A Tipping Point
Posted 03/16/2010 06:57 PM ET


"Nonpaying status used to be a sure sign of poverty," says Tax Foundation President Scott Hodge. "But thanks to increased use of the tax code to deliver social benefits, incentivize behaviors and funnel money to targeted groups, middle-class families have now been pulled into the growing pool of nonpayers. We're now in a situation where a record number of tax filers are completely disconnected from the cost of government."

This is a dangerous trend. The increase in the number of people who pay no taxes mirrors the increase in those receiving benefits from the federal government. This creates a bias toward more spending and against keeping tax rates low, since that burden is increasingly being borne by those at the high end of the income scale.

Unfortunately, these are the entrepreneurs, risk takers and small- business men who create most of the jobs.

When you have more people riding the wagon than pulling it, the wagon tends to break down. No amount of stimulus money extracted from those who do pay taxes will fix the wagon and get it moving again. Balance needs to be restored.

We have created too many ways to ride the wagon and not enough reasons to pull it.

THE QUIET REVOLT OF TAX PAYERS

We have applauded each time taxes have been cut, most recently under President George W. Bush.

We urge that these tax cuts not be allowed to expire this year as they are scheduled to do. That would be a huge tax increase at a time we can least afford it. But each cut has been obtained through deals removing more and more Americans from the tax rolls.