The Founding Fathers Original Tax Plan
Bottom Line --
The Framers of the Constitution provided a specific method to extinguish anticipated deficits through an emergency direct tax. Hamilton, in Federalist No. 36, reminds us:
"Let it be recollected that the proportion of these taxes is not to be left to the discretion of the national legislature, but is to be determined by the number of each State, as described in the second section of first article [US Constitution]. An actual census or enumeration of the people must furnish a rule, a circumstance which effectively shuts the door to partiality or oppression. The abuse of this power of taxation seems to have been provided against with guarded circumspection." (Federalist No. 36)
The rule of apportionment was written into our constitution to remedy a major defect associated with "democracies", which Madison points out in Federalist No. 10:
"... have ever been spectacles of turbulence and contention; have ever been found incompatible with personal security or the rights of property; and have in general been as short in their lives as they have been violent in their deaths." (Federalist No. 10)
And so, the Founding Fathers formed a Constitutional Republic to avoid the predictable disastrous consequences of democracy.
The intended use of the emergency direct taxing power to extinguish deficits is not only far superior to any of the proposed balanced budget amendments being offered . . . it is already part of our Constitution. The method in text form is as follows:
The Fair Share Balanced Budget Method --
"SECTION 1. Congress ought not raise money by borrowing, but when the money arising from imposts duties and excise taxes are insufficient to meet the public exigencies, and Congress has raised money by borrowing during the course of a fiscal year, Congress shall then lay a direct tax at the beginning of the next fiscal year for an amount sufficient to extinguish the preceding fiscal year's deficit, and apply the revenue so raised to extinguishing said deficit."
"SECTION 2. When Congress is required to lay a direct tax in accordance with Section 1 of this Article, Congress shall immediately calculate each State's apportioned share of the tax based upon its number of Representatives as allotted by the Constitution, and then notify the Executive of each State of its apportioned share of the total tax being collected and a final date by which said tax shall be paid into the United States Treasury."
"SECTION 3. Each State shall be free to assume and pay its quota of the direct tax into the United States Treasury by the final date set by Congress, but if any State shall refuse or neglect to pay its quota, then Congress shall send forth its officers to assess and levy such State's proportion against the real property within the State with interest thereon at the rate of ((?)) per cent per annum, and against the individual owners of such property. Provision shall be made for a 15% discount for those States paying their share by ((?))of the fiscal year in which the tax is laid, and a 10% discount for States paying by the final date set by Congress, such discount being to defray the States' cost of collection."
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Conclusion --
There are participants at this Hearing, and many political pundits appearing on talk shows across our country, who are far more articulate than I in identifying the glaring defects and dishonest nature of income taxation, whether flat or progressive. Likewise, there is also an abundant supply of those presenting well rehearsed arguments against an across the board national sales tax, and have displayed their rhetorical skills quite admirably. But who, I ask, has made a substantial argument against the Founding Father's original tax reform package?
Perhaps our only problem in regard to tax reform is that we, as a nation, have lost touch with the original intent and wisdom of those who framed and ratified our Constitution...such negligence culminating in our current dilemma.
In closing Mr. Chairman, I would like to take this time to thank you and your staff for allowing me this opportunity to present my humble opinion on a subject of such great importance.
***** About the author: John W. Kurowski founded The American Constitutional Research Service in 1985 to help promote a return to our constitutional system, as it was intended by those who framed and ratified our Constitution. In the late 1980's, after the release of his book titled `Prosperity Restored by the State Rate Tax Plan`--- a documented account of our founding father's original tax plan --- a substantial support for a return to the Founder's tax plan began to develop as hundreds of letters poured in from around the country in response to the book and talk radio shows discussing the plan. He had an associate who passed away and stepped away from the project temporarily, but considerably. But then the internet came along, inviting him to once again promote our founding father's plan as they intended it to work.
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