Jun 4, 2013 | Constitution, Healthcare, Liberty Articles, Take Action, Taxes
By Dr. Harold Pease
The Constitution is exceptionally clear on the origin of all taxes. “All bills for raising revenue shall originate in the House of Representatives,” not the Senate (Article I, Sec. 7). When is the House going to protect its powers from the Senate’s intrusive attempts to steal its power? Recently the Senate passed the “Marketplace Fairness Act” by a vote of 69-27, an Internet sales tax, giving states the authority to require on-line retailers, with no physical presence in those states, to collect sales taxes. Americans will pay more taxes with this bill than without. It is a bill for raising revenue and it did not originate in the House as mandated by the Constitution.
To put the Senate in its constitutional place the House should never take this bill up. Instead, if they feel such legislation is needful, they should originate their own bill after which invite the Senate to take a new bill through the committee process and to the floor once again. I might also suggest not doing so for a year or two just to make the message stronger. “You are infringing on our constitutional jurisdiction.” If the Senate will not do so, the House should consider the bill non-existent. Under no circumstances should they accept this bill as appropriate action on the part of their sister law-making body. Retailers, on the other hand, should refuse to pay this tax and challenge it in the courts on the constitutional grounds cited above.
Unfortunately, this is becoming a practice on the part of the U.S. Senate. Yet another infringing piece of legislation has also just passed the Senate Judiciary Committee in a 13-5 vote, the so-called “Gang of Eight” immigration bill, S.744, obviously originating therein. The Heritage Foundation estimates that this bill will cost taxpayers a net $6.3 trillion above what illegals contribute through taxes over the next 50 years providing benefits for millions now living in the United States. There may be debate over the numbers but what is clear is that the bill did not originate in the House of Representatives as constitutionally required and that Americans will pay more taxes with this bill than without it. Therefore it constitutes an unconstitutional tax.
The worst of all such recent intrusive taxes was “The Patient Protection and Affordable Care Act,” known as Obamacare, also originated in the Senate, not in the House as constitutionally required. Weeks ago I wrote of the extensive efforts on the part of the Senate Majority Leader, Harry Reid, to cover this up following the judicial decree of Justice John G. Roberts, Jr. proclaiming it a tax when the administration had argued otherwise. The establishment media should have been all over this story and was not. Obamacare may be the only revenue-raising bill in American history originated and processed by the Senate alone. Nothing could be more unconstitutional!!
So why does this matter, a tax is a tax? For thousands of years governments taxed their citizens with no limits. Rulers lived lavishly off the wealth extracted from their poor subjects with little or no mercy toward them—lavish physical structures and frivolous wars of conquest were too often the norm. The Founders wisely took this power from the rich and gave it to the poor by requiring that the poor, then the majority, had to consent to any taxation over them. The power to tax is the only constitutional power exclusively given to the masses. The House of Representatives was the only branch of government designed to actually represent them as it is based upon population. The Senate was to represent the states, the people only indirectly.
As far as I know the United States is the first, possibly the only, country in world history that puts its tax base with the masses who pay the taxes. It is a priceless freedom. If we are over-taxed in the United States we have chosen to be so and one body alone is responsible—The House of Representatives. No tax can constitutionally originate with the President or the Supreme Court, (even if Justice John G. Roberts, Jr. says that it is okay), not even the Senate, although it can modify as on other bills once originated by the House. The House is also in charge of spending. We must not let this freedom dwindle or allow the line between the two legislative branches to be blurred into oblivion.
By letting “origin” slide in these three matters, the House looses its clear distinction on the origin of taxes and the people their right of first approval of taxation for generations yet unborn and probably forever. If left unchallenged these three offending bills, one already implemented, severely damage Article I, Section 7 of the Constitution. All involved are under oath to preserve the Constitution. There is nothing in the Constitution more clear than this. Liberty is lost one piece at a time. It is also restored one piece at a time. Pass this around.
Apr 15, 2013 | Taxes
By Dr. Harold Pease
Take my talented friend Ellen who is a single mother with one qualifying child with a very modest adjusted income of $18,957. She paid no federal income tax in 2012, but did receive a “tax refund” of $3,500.
With a college degree in Art she should have full-time employment in some school but in hard times art is often undervalued and among the first cuts. “I know that with my small income, I have to make some hard choices about ‘wants’ and ‘needs,’” she said, “and that often means doing without some things. If I can’t pay for it, then I figure out how to do without it.” She drives a 17-year-old car. Certainly she can use the free money, and is grateful for any help, but she knows that having paid no taxes she should not be getting a “tax refund.”
What is happening to Ellen is happening to hundreds of thousands of other “Ellen’s” throughout the nation and has for most of two generations. It is called Earned Income Credit (EIC) and was a provision of the Tax Reduction Act of 1975, introduced by Republican President Gerald Ford. Initially it gave only $400 per child for low-income taxpayers. The provision was made permanent under President Jimmy Carter in 1979 and has been supported and increased by every president since—Republican or Democrat—regardless of its serious questionable constitutional legitimacy.
Eligibility depends on two variables, one, adjusted gross income, the other number of kids ranging from none to three. Parents without children must be at least 25 years of age and under 65. For taxable year 2012 that income level must be less than 13,980 if single (married filing jointly $19,190) with no children. With one child it can go to $36,920 if single, $42,130 if married filing jointly. With two children it can increase to $41,952 and $47,162. With three children it increases to $45,060 and $50,270 (New American, April 1, 2013 p. 26).
Basically as the IRS describes it, they pay the parent(s) when earned income tax credit “exceeds the amount of taxes owed, it results in a tax refund to those who claim and qualify for the credit.” Yes, I said this correctly. Amazing!! Only under socialism can this be explained thus.
So, for a typical two child family this taxable year “they can make up to $27,104 and not only owe nothing in taxes, but get a $4,220 earned income credit plus a $1,000 per child additional tax credit refund to them. This effectively gives them an artificial income of $33,324. This is better than a real income increase of that amount because the family’s income is still $27,104 when qualifying for public assistance and when figuring the taxable wages for Social Security and Medicare.” The maximum benefit is scheduled to rise this year “to $6,044, with a partial benefit available for taxpayers with incomes up to $46,227” and $51,567.
This raises some very serious questions legitimately posed by the New American magazine: “If a tax credit ‘payment’ is more than the tax owed, the taxpayer receives a net payment from the government—a refund of money he never paid in.” Moreover, “how can the Earned Income Credit be called a tax refund when it is other people’s money that is refunded?” And, “Why do ‘low to moderate income working individuals and families;’ need a tax credit, when they generally pay no federal income taxes in the first place?” The government, whether lead by Democrats or Republicans, does not want to answer these questions.
As we have reported before, almost 50% of Americans pay no federal income taxes. How can this be fair to the taxpayer who is forced to pay for another family when often he needs his own limited resources for his own kids—especially for those just above the qualifying lines for special government “goodies;” known as the working poor?
Ellen, though grateful for the help, asks the same question. “Why did I get money that I didn’t even pay into the system? My friends who don’t have dependents or other write-offs paid dearly.” She does not want a dole. “I want the government to get out of the way of free enterprise that might offer me better employment opportunities. I don’t want food stamps! I want opportunity! I don’t understand why people can’t see that this system is flawed.” She added, “What happened to the American Dream? President Barack Obama is offering us but low-end concessions. I don’t want to live like this!! I want to work!!” I told her if this column resulted in any job inquiries I would pass them on to her.
Dr. Harold Pease is an expert on the United States Constitution. He has dedicated his career to studying the writings of the Founding Fathers and applying that knowledge to current events. He has taught history and political science from this perspective for over 25 years at Taft College. To read more of his weekly articles, please visit www.LibertyUnderFire.org.
Mar 30, 2013 | Constitution, Economy, Taxes
By Dr. Harold Pease
Every evening as I watch the news I hear the Democrats blasted for their irresponsible, wasteful spending leading this nation to its highest national debt with over $6 trillion accredited to President Barack Obama alone. Just this week Secretary of State John Kerry gave the Palestinians some $500 million not to attack Israel. Last month Egypt reportedly received 16 F-16 fighter jets together with some 400 tanks; their likely target Israel, our supposed friend. Every year we give them $1.7 billion in foreign aid. All this while we close down White House tours allegedly because we do not have the money to keep them open. We presently spend (waste) about $20 billion dollars annually on “buying” friends, called foreign aid. The spending goes on and on with Democrats, according to the news, responsible for most of it.
So, if true, why attack the Republican Party? They are not in charge Democrats are! That was so for Obama’s first two years in power, but decidedly not so since 2010. When Republicans retook the House of Representatives and Nancy Pelosi handed the gavel of leadership to John Boehner, Republicans assumed the major responsibility of this Congressional body—taxing and spending. The Constitution reads, “All bills for raising revenue shall originate in the House of Representatives, but the Senate may propose or concur with Amendments as on other Bills” (Article I, Section 7, Clause 1). Neither the Senate nor the White House can constitutionally initiate taxes. All the Republican controlled House has to do to stop irresponsible spending is to not originate the bill to cover the expenses. The annual House Budget could leave out items formerly approved. Deficit spending could end simply by their refusal to pass new deficit spending bills.
It is true that the President has not had a budget, although required by law, in over four years and he is already almost two months late in proposing one this year as well. Until such time as one is processed constitutionally the House budget should be the official federal budget. It is also true that no tax law can originate to cover his expenses without first the consent of the House of Representatives. Hence only the House Budget really matters. If a president spends money not first approved by this body he is, in effect, raising revenue, a power that he does not possess and both parties should share in his condemnation. Sole power of impeachment also originates from the House, and a president perpetually attempting to exclude the House of its sole power to raise revenue might be reminded of the second power. Also, given that a president’s salary is also a budget item, the House might explore the possibility of not raising revenue for this purpose should this body feel threatened by a president’s usurpation of the House power. This procedure was openly used by state legislatures on zealous royal governors to help bring them into line during Colonial American History.
Why do the House of Representatives alone have this power? The power of the purse (both taxing and spending) is one of the most important powers of the Constitution. The Founders resolved that it should be left with the representatives of the people, thus making it impossible for the people to be over-taxed without their consent for more than two years as all members of this body come up for reelection on the same date—every two years. To my knowledge no other people in history have had control over their taxes. It is a priceless freedom.
Addressing this subject James Madison observed, “This power over the purse may, in fact, be regarded as the most complete and effectual weapon with which any constitution can arm the immediate representatives of the people, for obtaining a redress of every grievance, and for carrying into effect every just and salutary measure.” The U.S. Constitution mandates that “the House of Representatives cannot only refuse, but they alone can propose the supplies requisite for the support of government.” This power alone he added, “can overcome all the overgrown prerogatives of the other branches of the government. They, in a word, hold the purse… (The Federalist, No. 58).”
So Republicans, if you do not like the above reckless spending charge that I have attributed to you, assume your Constitutional House of Representatives duty to protect the people from such and do so immediately. You are in charge in this matter, not they. Your failure to act weakens this part of the Constitution. Mankind waited almost 6,000 years to have freedom from excessive taxation. You do not have the right to lose it for posterity.
Dr. Harold Pease is an expert on the United States Constitution. He has dedicated his career to studying the writings of the Founding Fathers and applying that knowledge to current events. He has taught history and political science from this perspective for over 25 years at Taft College. To read more of his weekly articles, please visit www.LibertyUnderFire.org.
Mar 23, 2013 | Constitution, Economy, Taxes
Dr. Harold Pease
As a nation under the U.S. Constitution we are 224 years old. It may surprise readers to learn that for most of these years, 124 to be exact, we had no established federal income tax and handled our national debt quite well. Today most pay at least a fourth of their income to the federal government. Prior to 1913 you kept for yourself what is now taken from you. And what would you now spend it on were it not taken? Not on the basics such as food, housing, and utilities for they are covered in what you are allowed to take home. You would spend the extra fourth of your salary on thousands of items that are made by others as well as services you might like. This not only would enrich your life but it would provide millions of jobs for others making those items or providing those services as well. Many middle class folks could purchase a new car every year with what they are forced to give to the federal government.
Would you spend it more wisely than the federal government? Certainly! Most of the money taken from you by the federal government is spent on perpetual war, foreign aid, grants to privileged portions of our society, and endless unconstitutional subsidized programs; the last two of which basically take the money of those who produce and redistributing it to those who do not. Even some non-tax payers get income tax refunds—so corrupt is the system. Of course, those receiving and benefiting from these areas will defend them. But the fact remains that tax monies provide largely government jobs, which are almost entirely consumption jobs (jobs that consume the production of society but produce nothing consumable). Such jobs cannot produce for public consumption a potato, a carton of milk, or even a can of hair spray. They bring another guy to the table to eat, but not another to produce something to eat.
What largely brought about the give-away programs of the Twentieth Century was the now 100-year-old 16th Amendment—the federal income tax. All three 1912 presidential candidates Teddy Roosevelt, William Howard Taft and Woodrow Wilson, and their respective parties, wanted this financial water faucet that they could turn on at will. They could purchase anything—even people. Prior to 1913 the federal government remained mostly faithful to her grants of power in Article I, Section 8 of the U.S. Constitution, which left them with only four powers: to tax, pay the debts, provide for the general welfare and provide for the common defense. Because the federal government has the inclination to maximize their authority the last two power grants, general welfare and common defense, each had eight qualifiers to harness them more fully. Out side these four powers the federal government had no power to tax or spend.
General welfare then meant everyone equally and at the same time as opposed to “specific welfare” or “privileged welfare” as it is today, targeting those to forfeit and those to receive monies. The Constitution did not deny states, counties, or cities from having such programs, only the federal government. But politicians soon learned that the more they promised to the people, from the money of others, the easier it was to get elected and stay elected.
The problem with the federal government going off the list and funding things clearly not on it was that each time they did so the stronger the inclination to do so again. One minor departure begets another until one notices that what the federal government does has little or no relationship to the list. I ask my students what would happen if they took one lolly-pop to kindergarten and gave it to one child? What would the others say? Where is mine? Or, I give one student the answers to the next exam and the others find out. What would they say? Try taking away long provided benefits from a privileged group, as for example food stamps, and see how popular you are with that voting group in the next election.
So why does the government now need a fourth of everything you make and it is still not enough? Because we went off the listed powers of the Constitution and every departure required more taxpayer funding, that is why. The answer to less tax is less government. A side benefit is more freedom. The productive classes would not be hurt as might be supposed. Seldom do they qualify for the federally subsidized programs anyway. The fourth taken from the productive classes would be spent by them thus creating a haven of jobs of which those who wished to work could and would have no excuse not to. The cycle of dependency would be drastically reduced. The federal government would no longer be an enabler to those not working. States would decide for themselves what assistance programs they could afford with some states offering more and others less as the Tenth Amendment mandates.
So, how did we cover the expenses of the federal government—even wars—our first 124 years? Products coming into the country were assessed a fee to market in the U.S. called a tariff. Ironically we got product producers in other countries to cover our national expenses and thus we were able to spend, on ourselves, every cent of what the federal government now takes, which inadvertently stimulated the economy. I am certain that there is someone out there that could find a supposition in the above to fault, but no one should be able to argue that our approaching $16.7 trillion national debt is fair, has really worked for any of us, and is a better plan. I personally like the idea of being able to purchase a new car every year.
Dr. Harold Pease is an expert on the United States Constitution. He has dedicated his career to studying the writings of the Founding Fathers and applying that knowledge to current events. He has taught history and political science from this perspective for over 25 years at Taft College. To read more of his weekly articles, please visit www.LibertyUnderFire.org.
Jan 14, 2013 | Constitution, Economy, Take Action, Taxes
By Dr. Harold Pease
There are few parts of the Constitution more clear than, “All bills for raising revenue shall originate in the House of Representatives but the Senate may propose or concur with amendments as on other bills” (Article I, Section 7, Clause 1). In a vote taken well after midnight (the supposed deadline) December 31, the SENATE passed a bill raising taxes on those with incomes above $400,000 a year, a tax increase on this group from 35% of their annual income to 39.6%, and the removal of tax exemptions for those making $250,000 or more a year. The capitol gains tax on everyone was raised from 15% to 20% and there were many other adjustments on the tax code as well. This bill definitely did not originate in the House of Representatives as required by the Constitution. So, does anyone care?
The Senate then forwarded their “revenue raising” bill to the House the day after the deadline presenting them with a single choice, be blamed for taking the country over the so-called fiscal cliff or not. It was blackmail! With no way to modify any of its provisions and the bell having already rung ending the tournament, they agreed. It is true that the House had not presented to the Senate any revenue raising solution as it opposed such, largely because President Barack Obama had made it clear that he would not sign any law that did not raise revenue on the rich. Still, the House is the only body that had authority to do so and their intention not to support a tax increase, by not originating one, should have stood regardless of what the Senate and President thought or wanted. Allowing these other bodies to do so for them has weakened this part of the Constitution and House authority. Henceforth, past practice wrongly will be used to legitimize future revenue raising by the Senate and this part of the Constitution, in effect, will be obliterated.
So why should you care? For thousands of years, until the Constitution, governments taxed their citizens whenever and whatever they wished. The people had no say. If the pharaoh in Egypt wanted bricks without straw from the Israelites, for instance, so be it. In our republic we have two legislative bodies, the House to represent the people, and the Senate to represent the individual states. Prior to 1913 the State Legislators elected the Senate so that it could protect the interests of the states from the federal government’s natural inclination to grow, absorbing state functions. This is called federalism—shared government. The House was to protect the interests of the people as its first and major concern.
The power of the purse (both taxing and spending) is one of the most important powers of the Constitution. The Founders resolved that it should be left with the representatives of the people; “all bills for raising revenue shall originate in the House of Representatives (Article I, Section 7).” This made it impossible for the people to be over-taxed for more than two years as all members of this body come up for reelection on the same date—every two years.
Addressing this subject James Madison, the father of the Constitution, observed, “This power over the purse may, in fact, be regarded as the most complete and effectual weapon with which any constitution can arm the immediate representatives of the people, for obtaining a redress of every grievance, and for carrying into effect every just and salutary measure.” The U.S. Constitution mandates that “the House of Representatives cannot only refuse, but they alone can propose the supplies requisite for the support of government.” This power alone he added, “can overcome all the overgrown prerogatives of the other branches of the government. They, in a word, hold the purse… (The Federalist 58).”
Taxes, the historic grievances of the masses of all ages, were left to this body alone to originate or initiate. The significance of this placement cannot be over-stated. In the Constitution only the masses could originate taxes as all revenue for the government came from the backs of the people. In the United States it is impossible to be over-taxed if we are following the Constitution. No other nation in all history, as far as we know, had this protection from their government. Once processed through the House, the Senate could modify as on other bills, but it must first come from the House. This cannot happen without permission from the people’s representatives.
This may seem like a small thing given all the hype on the Fiscal Cliff but the people really do not want to surrender their freedom from excessive taxation, which, prior to this document was virtually unheard of in the history of the world. Losing this is far more serious than what pundits said would be the worst-case scenario of the cliff because, once gone, it is unlikely to be retrieved. Members of congress are doing so incrementally by not insisting that the government stay within its bounds and honor the document that they individually have sworn to uphold. No one will destroy the Constitution all at one time but by their ignorance, or worshipful loyalty to party, are doing so one piece at a time. If your representatives voted for this please send him a copy of this article so that he/she will be more sensitive to this issue in the future.
Dr. Harold Pease is an expert on the United States Constitution. He has dedicated his career to studying the writings of the Founding Fathers and applying that knowledge to current events. He has taught history and political science from this perspective for over 25 years at Taft College. To read more of his weekly articles, please visit www.LibertyUnderFire.org.
Dec 17, 2012 | Constitution, Economy, Healthcare, Take Action, Taxes, Tea Party
By Dr. Harold Pease
What most do not realize is that December 31 is but the first fiscal cliff—the little one. Given the inability of both parties to deal with this little one, although they have known about it for almost two years, how can we have any faith in their ability to prevent the ultimate collapse of the economy if immediate and drastic changes are not made soon? Why not solve both now before options are more drastic later?
Neither party really represents limited constitutional government and both are addicted to debt. It is like an addict prescribing his own detox program. Consequently Freedom Works, a Tea Party affiliate, selected 12 of their own members and through the Internet invited 150,000 members to make suggestions on what should be done. The Tea Party Debt Commission was formed to provide the federal government a solution. Its final report summarized the problem, “Our government is doing too many things it can’t do well, or shouldn’t do at all, with money it doesn’t have. We are borrowing 43 cents of every dollar we spend….”
The Tea Party Plan cuts, caps, and balances federal spending. The budget is balanced in four years, without tax hikes, and remains balanced. Federal spending is reduced by $9.7 trillion over the next ten years. The plan shrinks the federal government from 24 % of GDP to about 16 %. Finally it stops the growth of the debt and begins paying it down. Within a generation there would be no national debt. Bold indeed!
How do they do this? First, stop duplication of services. They note that the “Government Accountability Office counted no fewer than 47 job training programs, 56 financial literacy programs, 80 economic development programs, 18 food assistance programs, 20 programs for the homeless, 82 teacher-quality programs spread across 10 agencies, and more than 2,100 data centers. All told, we have nearly 2,200 federal programs.” Government is bloated, inefficient, and wasteful.
Second, repeal services that we can no longer afford and/or that are not authorized within the Constitution. These goals include repealing ObamaCare, eliminating four unconstitutional, costly, inefficient Cabinet agencies—Energy, Education, Commerce, and HUD—and reducing or privatizing many others, including EPA, TSA, Fannie Mae, and Freddie Mac. Their report calls for ending farm subsidies, government student loans, and foreign aid to countries that don’t support us—luxuries we can no longer afford.
Third entitlement programs must be incentivized to give donors more for their money. Boldly they opened the unfunded liabilities door—the door neither party dares to open as potentially it could destroy career politicians and political parties. They concluded that they could make Social Security “sustainable and actually improve benefits by harnessing the power of compound interest.” They noted, “Three decades ago, Chile embarked on a bold transformation of its retirement security system. Today, that system [SMART Accounts] is the envy of the world, giving seniors far better benefits than the old, government-run system ever did.”
Shortly thereafter three counties in Texas adopted the SMART Accounts program in favor of personal accounts and thus those retiring today do so “with much more money and have significantly more generous death and disability supplemental benefits than do Social Security participants.” Moreover, they “face no long term unfunded pension liabilities.” The Commission recommends that, “all state and local governments should have the option of opting into the ‘Galveston model.’ ”
The Tea Party Debt Commission saw the Medicare program as outdated, inefficient, and corrupt and recommended six major changes that if followed would save, they predicted, $676,000,000 the first year and $2,030,843,000,000 in 10 years. These changes are first “let individuals opt out of Medicare under Senator Jim DeMint’s ‘Retirement Freedom Act.”’ Second, let all new Medicare beneficiaries enroll in the Federal Employees’ Health Benefit Program (FEHBP) introduced by Senator Rand Paul as the “Congressional Health Care for Seniors Act.” Third, reduce Medicare subsidies to actual cost of hospitals’ graduate medical education. Fourth, maintain Medicare’s physician payment rates at the 2011 level. Fifth, convert the open-ended Medicaid program into a capped block grant to the states. And six call on all states to reform their medical malpractice and product liability systems—tort reform.
Opting into the same Medicare program the members of Congress use, the second Tea Party change recommended, is much better for participants because it “relies on competing private insurers to provide benefits, and as a result has very little of the fraud and waste problems that plague today’s outdated and poorly designed Medicare system.” One wonders why Congress can make for themselves such a good system and leave us one with “between 10 and 20 percent of Medicare’s $450 billion annual budget being attributable to waste, fraud, and abuse….” Moreover, it suspends pension contributions and COLAs for Members of Congress, whenever the budget is in deficit.
The new plan offers a rational transition to ownership of our own retirement and more control and choice over our health care. Why did the government fail to accomplish the same thing—even behind closed doors? Their first concern is to protect their jobs and party. Outsiders, without a personal stake in the outcome, can see much more and do much more without the inevitable political wrangling. Learn more and review the details of the Tea Party Debt Commission’s recommendations by visiting FreedomWorks.org/the-tea-party-budget. Will Congress explore these changes with intent to make them? Not unless you demand that they do so.
Dr. Harold Pease is an expert on the United States Constitution. He has dedicated his career to studying the writings of the Founding Fathers and applying that knowledge to current events. He has taught history and political science from this perspective for over 25 years at Taft College. To read more of his weekly articles, please visit www.LibertyUnderFire.org.
