Earth to Herman Cain: The third "9" in your plan is unconstitutional

Most of us have heard by now of Herman Cain's infamous 9-9-9 tax plan, where he would favor a 9% federal income tax, 9% federal corporate tax, and a 9% federal sales tax. It's bad enough that he wants to give the feds a new tax source*, but he needs to know that a federal sales tax is unconstitutional!
Here is the evidence:

Article I, Section 9, Clause 4 of the U.S. Constitution:

No capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken.

That clause was amended by the Sixteenth Amendment (which itself ought to be repealed):

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.

Note that the power granted to Congress is limited to income taxes. For any other direct tax, Article I, Section 9, Clause 4 still applies.

There is another reason that we should oppose the 9-9-9 plan. Can there be anything good for the middle class to have the feds tax money going in and going out.** Herman Cain's plan taxes individuals twice, income and sales tax, and it taxes corporations twice, corporate and sales tax.
I think Michelle Bachmann had the right idea. Turn the numbers upside down and you get 6-6-6 -- the devil is in the details.
* Fox News says that we are still paying taxes based on a bill to finance the Spanish-American War!
** Of course, Ohio has been doing this to us since the income tax was adopted in 1973, but we could still repeal it if we so desired. Getting the feds to repeal a tax is almost impossible.

Quotation of the day

Common sense, actually (via Robert Owens, restating what I said Sept. 15):

So whose money is it, really?

I'm talking about the money you make at work.

Is it really yours -- that money that you earned -- or is it the government's -- to give you an "allowance" after they have taken out all their taxes?

We say that it is ours, then act like it's theirs.

Priscilla Petty at The American Thinker expands on this idea in a piece that is well worth reading. Here's an excerpt that gives you the flavor:

How can any thinking business person plan ahead when politicians have taken away from them the ability to project business plans ahead?  How can a business prosper when business leaders must make business decisions based on potential ever-changing tax policy?  Politicians are so unknowing that they don't understand that stability of tax rules and of regulations is necessary for a system to work. Politicians fail to look at the whole system but focus on the pieces.  The business which does not take into account the vagaries and whims of today's U.S. government will not survive economically.

We have reached the point where we must take back what is rightfully ours.*

* Disclaimer: I am a public employee, but I am not referring to imagined public employee rights under collective bargaining. I am writing of the tax dollars we all pay.

Virtual buckeye to Charlie Earl on Facebook.

Cutting off the money supply

Last year, we discussed with Ohio legislators an idea for the State of Ohio to intercept federal tax money pending a determination of the constitutionality of its purpose. After considerable research and discussion, we were unable to find a feasible way to carry this out (but please feel free to e-mail me or comment if you have any ideas!)

Tom Mullen is looking at a different approach to the same end. Simply block enforcement of the tax laws until the feds balance their budget. Other legislation has been suggested to block federal enforcement of Obamacare, firearms law, and medical marijuana -- why not this? Writing for LewRockwell.com, Mr. Mullen suggests:

This would be accomplished in the same way as several other recent nullification/interposition efforts. The state legislatures would pass a law indicating that no person or business in their state could be prosecuted or fined by the federal government for failing to file an income tax return or failing to pay their quarterly payroll tax deposits, so long as said filings and payments were made within sixty days of the Congress passing a balanced federal budget. For those who still trust the people less than they do the government, a stipulation could be added that the funds go into escrow and be audited by the states, if necessary.

This would accomplish two things. First, it would reestablish exactly who works for who in this relationship. Obviously, elections have failed to do that. More importantly, it would work. The blind fear that would grip our legislators when they realize that the party is really over would at least scare them sober enough to balance what would still be an over $2 trillion budget. While it wouldn’t solve our long-term problems, that truly would be a start.

Bloated governments are imploding all over the world and ours is poised to do likewise for all of the same reasons. Now that we have seen what “extremism” really looks like in Greece, Egypt, and Tunisia, this proposal should strike any rational person as reasonable and moderate. We do not need a rebellion or violence to balance the federal budget – just a little adult supervision.

I especially like the part about adult supervision. The children are in Washington, the adults are in the states. We the grown-ups need to get back into control.

Common sense about the tax deal

Thomas Sowell (in today's Columbus Dispatch) is irritated about the terminology used around the extension of what has come to be called the "Bush-era tax cuts."

• No one's taxes are going to be cut. The question is whether individuals, especially those who make over $250,000 per year, will get a tax increase (at the highest levels, from 36% to 39.6%).
  
• Taxes do not affect billionaires, most of whom, as Dr. Sowell points out, would still remain billionaires even if the feds taxed them at 100%.
• Extending unemployment benefits provides a disincentive to work. Human nature is to accept the benefits until they go away -- no matter how long they are given.

Here are some of Dr. Sowell's comments:

When you refrain from raising someone’s taxes, you are not “giving” them anything. Even if you were actually cutting their tax rate — which is out of the question today — you would still not be “giving” them anything, but only allowing them to keep more of what they have earned.

Is the government doing any of us a big favor by not taking even more of what we have worked for? Is it not an insult to our intelligence to say that the government is “giving” us something by not taxing it away? ...

With the government making it more expensive for employers to hire workers, and at the same time subsidizing unemployed workers longer and longer, you can have as much unemployment as you are willing to pay for, for as long as you are willing to pay for it.

As I have written repeatedly, "Federal funds" are nothing more than your tax dollars returned to you at a discount with strings attached. When will people finally wake up and realize that?

Thomas Sowell is one of the Champions of Liberty who were honored in January.

Wealthy Americans are emigrating

The brain drain from Ohio is bad enough, but it gets worse, as John Gaver writes in DumpDC. He shows that up to two million of the wealthiest Americans have left our shores and have no intention of returning! Why? Because of the tax burden. While there is an expatriate tax credit on the books, many decide not to even bother filing a tax return. There is a risk in failing to do so -- but only if one wants to come back.

The feds are so worried that in 2008, they slapped an exit tax on Americans obtaining residency abroad. Mr. Gaver comments:

A true exit tax is considered to be one of the most ominous signs of a desperate government. The 10-year expatriation tax, passed in 1996, was bad enough. But, a pure exit tax would be far worse. But if you are waiting for that to happen, before you believe that we are in a world of trouble, then you can stop waiting. In fact, if you were waiting, then like so many other Americans, you missed it. In 2008, Congress passed and George W. Bush signed into law, the first ever US Exit Tax, as a part of the Heroes Earnings Assistance & Relief Tax Act (Public Law 110-245, at Sec. 301).

Obviously, they do not buy into the idea that the United States is the land of the free. When will the rest of us get that memo?