Friday, May 6, 2011

Note to Chris Chocola/Club 4 Growth on BBA

Chris, thanks so much for your note of Friday 6 May on the proposed Balanced Budget amendment.

We have a super serious federal spending problem, and a BBA sounds like a reasonable way to solve it. But sometimes a look upstream at why we have the problem can show us better ways to solve it.

We should not have the problem if voters are electing the right people to Congress. But the current Tax payment act of 1943, demolished that link by moving the actual sending of money to Washington from the voter to the employer. If the employer does not send in the check, he goes to jail, never the voter/employee.

Employers aren't happy with this, but in contrast to individuals, employers have no competitive advantage to do anything other than add all those tax dollars to their prices, converting the income tax to a silent, apparently painless, national sales tax.

The results of this political parlor trick are clearly visible in the 2011 Statistical Abstract of the United States table 478 showing 37% of the total 2009 federal income of $2.345 trillion coming from employer bank accounts, not voter's.

At the other end of this monstrosity is an army of voters with fistfuls of pay stubs saying “you earned and your employer paid” demanding that they earned an old age pension, and life time health care.

These tow problems could be solved by getting a majority of the House of reps, 60 Senators, and a President with backbone enough to change paragraph 3402 of USC Title 26 — 'Internal Revenue Code' Subtitle C 'Employment taxes' Chapter 24 'Collection Of Income Tax At Source On Wages'... from "every employer making payment of wages shall deduct and withhold upon such wages a tax..." to "every employer making payment of wages shall pay all of those wages to the employee...." The employer would still calculate the tax, including a note: "Here is how much the feds are expecting you personally to send in within 30 days"

Requiring voters to send in a check for 20% of their take home pay every month would quickly suggest to them who they should elect to Federal office.

This could not be done overnite, but randomly choosing a single letter every quarter, and requiring all voters with names beginning with that letter to submit to the new pay as you go tax system, would get the whole thing done in 9 years. This period would include two Presidential elections, 4 house elections, and a complete rebuild of the Senate.

But there are some Constitution strengthening amendments that would be mighty useful:

An amendment to clarify the meaning of the Commerce clause similar to how James Madison explained the meaning of the general welfare clause in the last three paragraphs of his Federalist Number 41.

Another to clarify the 16th amendment, such as eliminating double taxation, penalizing citizens for using their first amendment right to 'peaceably assembling' by forming profit making corporations

And we should abolish the 17th amendment, that converted the glory of the US Senate to nothing but a second House of reps, with longer terms, higher salaries, and more expensive suits.

Arnold H Nelson

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