May 30, 2009

VAT or FairTax

Date: Sat, 30 May 2009 02:31:30 -0400
Subject: VAT or FairTax

I liked your article, below. It points out the danger that a Value Added Tax (VAT) poses for America. There is one point in your article that touches on something generally missed. We often hear that the 16th Amendment must be abolished before the FairTax is adopted because we could end up with both the income tax and a sales tax. The fact is that we already have a national income tax and a national sales tax. The income tax we are all too familiar with. The current "sales tax" is the "business" taxes and other taxes that are imbedded in the price of all goods and services produced in America. Studies by Dr. Dale Jorgensen and Dr. Laurence Kotlikoff and others conclude that an average of ~22% of the retail price of all goods and services produced in America are taxes buried/imbedded in the price. This is, in essence, a 22% hidden sales tax.
This results in American labor and business competing here and abroad at about a 20% competitive disadvantage. Unlike ALL of our trading partners with their VAT taxes, we have no mechanism to identify or back out these imbedded taxes. Whenever our government tries to mitigate this inequity the WTO slaps a fine on American products. The WTO allows the foreign governments to rebate to their producers the VAT taxes paid when the products are exported, but disallows income tax or other credits for American exports. An American VAT would solve this problem, however, as you well pointed out, the hidden nature of VAT taxes results in runaway government. Another real disadvantage of VAT taxes is the cost to comply with the tax at every step of the production and delivery process and this tax compliance cost adds to the price of the product.
A simple solution, as you mentioned, is the FairTax. Tax compliance cost and tax efficiency cost (loss of economic efficiency due to the impact of tax consideration on financial decisions) currently is estimated at $500 billion to $700 billion annually. The FairTax replaces the income tax and virtually eliminates tax compliance and efficiency costs for individuals and businesses. Because the FairTax is a retail sales tax it is 100% visible, and therefore, has the natural restraint on the size of government as intended by our Founding Fathers when they twice prohibited income type taxes in the Constitution.
Americans would be able to see their true tax burden for the first time in generations. In addition, the FairTax is automatically border adjusted because American products would have no taxes imbedded in their prices that would otherwise have to be backed out when exported. The result is that with the FairTax American produced goods and services (or labor and capital) would be able to compete with foreign competition on a level playing field, rather than one with a 20% uphill climb. Is it any wonder that we are exporting our companies and jobs rather than our products?
Roger Buchholtz
FairTax Director (volunteer)
Business owner & economist
P.O. Box 141 / 5620 Clato St.
Kalamazoo, MI 49004
phone/fax: (269) 345-0950
cell: (586) 530-3298

PHIL KERPEN: Be Afraid, Be Very Afraid of the Obama Administration's Scary Trial Balloon

By Phil Kerpen
Policy Director, Americans for Prosperity

In today's Washington Post, the White House floats a really scary trial balloon—a new national Value-Added Tax (VAT) to pay for out-of-control spending and a Washington take over of health care. Senate Budget Committee Chairman Kent Conrad appears to be on board. So does Ezekiel Emanuel, brother of White House chief-of-staff Rahm Emanuel, who has been hired by the White House budget office to help design the health care plan and whose book on health care uses a VAT to fund the new government program. Obama economic adviser Paul Volcker is also on-board the VAT-train.


We need to draw a clear line in the sand that no new national taxes will be put in place without eliminating—not cutting, but permanently eliminating—our existing income tax.


What is the VAT? It's a type of national sales tax that is collected in pieces throughout the production chain, instead of being collected all at once at the cash register like a retail sales tax. In theory, sales taxes like the VAT are pretty good taxes because they are broad-based, difficult to evade, and minimize economic distortions. In practice, they are the ATM machine for runaway government growth, because they are largely invisible to the public and they can raise huge amounts of money in very small chunks, thus minimizing the effective political opposition that generally keeps taxes in check.

A couple of years ago Dan Mitchell wrote a great summary of the VAT experience in Europe that explains how the VAT was the key policy change that moved Europe to a much higher level of taxes and spending than the U.S. Because the tax is difficult for the public to see, it's very easy for politicians to raise, and VAT rates in Europe have steadily increased since the tax was first introduced. With the VAT tax weapon in hand, European governments have grown to more than 40 percent of GDP, a level unknown in the United States outside of world wars. Now that scary scenario could, unfortunately be in store for us if the White House pursues a VAT in the U.S.

The U.S. tax system is clearly a mess, and badly in need of meaningful tax reform. That reform, however, needs to in the direction of simplicity and lower rates. Many conservatives believe, with good reason, that we should abolish the IRS, end income taxation, and adopt a national sales tax of some kind—most would prefer a national retail sales tax, which is the heart of the Fair Tax proposal. Some, perhaps, would be happy with a VAT, which functions much like a sales tax. Such a proposal is not without its virtues, but the enormous risk associated with it is that we end up with a national sales tax on top of our existing income tax system.

Based on the European experience, accepting a VAT in exchange for reductions in taxes on income and capital would be a foolish bargain, because once politicians have all the taxes on the books they would steadily increase the rates over time, leading to a much higher overall level of taxes and spending than would otherwise have been possible. We need to draw a clear line in the sand that no new national taxes will be put in place without eliminating—not cutting, but permanently eliminating—our existing income tax.

Trillions of dollars of bailouts, stimulus, spending, unfunded entitlement obligations, and an appetite for a Washington takeover of health care have us on a collision course for a national bankruptcy unless we adopt a huge new tax (cap-and-trade is another one, by-the-way, although the VAT could be even more expensive) or finally start to get a handle on runaway spending. The current tax system simply will not bear enough revenue to pay for these trillions of dollars of obligations. If we don't want to accept a European-style nanny state and the lower standards of living that come with it, we need to cut all this spending and forget about a Washington takeover of health care. And we need to shoot this VAT trial balloon down, quickly.

Mr. Kerpen is director of policy for Americans for Prosperity. He can be contacted through He records a free daily Podcast and today's is on the subject of the VAT. Listen here.MI

We need to draw a clear line in the sand that no new national taxes will be put in place without eliminating—not cutting, but permanently eliminating—our existing income tax.

AFA-MICHIGAN BANQUET -- Gov. Mike Huckabee praises AFA-Michigan'sstand for truth

Press Release from AFA

AFA-Michigan 2009
   Annual Banquet
                                                                                                           Gary Glenn, President
LEONARD, Michigan -- Over 200 supporters and guests attended the American Family Association's 2009 annual banquet in Oakland County May 21st, which featured a video greeting by former Gov. Mike Huckabee, keynote speaker and Fireproof star Erin Bethea,
special recognition of citizens who have stood firmly for traditional values, and an annual
report by AFA-Michigan President Gary Glenn. See our highlights below...
Gov. Mike Huckabee praises AFA-Michigan stand for truth
Former presidential candidate, pastor, and Gov. Mike Huckabee offered a video greeting to the American Family Association of Michigan's 2009 annual banquet, praising the organization for its leadership in defense of prenatal children's unalienable Right to Life and the God-ordained institution of marriage and the family.
"In a time when so many organizations, even Christian ones, are running from truth, and running from controversy," Huckabee said, "Gary and American Family Association of Michigan have been absolutely, totally committed to maintaining a steady, solid course for truth."

Fireproof star Erin Bethea: "Marriage is worth fighting for"
  Erin Bethea, the pastor's daughter
  who starred in the 2008 hit movie
  Fireproof as the wife of the fireman
  played by Kirk Cameron, shared an
  inspiring and uplifting testimony of
  how God is using the vision He gave
  one church in Georgia to reach
  millions of viewers worldwide through
  Christian films. It was no accident,
  she said, that when the institution
  of God-ordained marriage is under
  attack, the church was led to focus
  its latest film on the importance of 
  preserving Christ-centered marriages.
 AFA-Michigan President Gary Glenn and his wife Annette    
 welcomed keynote speaker Erin Bethea, center.                         

Glenn honored for decade of leadership for Michigan families
AFA-Michigan's 2009 banquet marked the tenth year of Gary Glenn's service as president of the state's highest-profile advocate for traditional Judeo-Christian family values, during which the organization has been
recognized as a leader not only in Michigan but nationally on such issues as pornography, protecting prenatal life and religious liberty, and opposing the homosexual agenda, including Gary's co-authorship
of the Marriage Protection Amendment overwhel-mingly approved by Michigan voters in 2004.
AFA-Michigan's activities under Gary's direction have been reported by the BBC, New York Times, CNN, Paula Zahn Now, MSNBC, USA Today, Fox News, Associated Press, Washington Post, Washington Times, Boston Globe, Chronicle of Higher Education, Tech Law Journal, Arizona Star, Focus on the Family's Citizen magazine, and countless TV,            Banquet organizer and emcee Nicole Stahl
radio, and newspaper stories in Michigan.                      presented Gary a glass flame thanking him
                                                                                                        for his ten years of "faithfully leading the
In a presentation to the annual meeting of the                 charge" as AFA-Michigan president.
American Political Science Association in San
Francisco -- later published by Harvard University -- two Calvin College political science professors stated: "In recent years, AFA of Michigan has played an increasingly visible role
in state politics as it has turned much of its attention to opposing gay rights initiatives across the state. In addition, AFA of Michigan is engaged in opposing pornography... Much of the publicity received by AFA of Michigan is attributable to the energetic leadership of its current president, Gary Glenn, particularly with respect to the controversial area of gay rights.
...Glenn has shown no fear in dealing with what his group labels the 'homosexual agenda'
and has vigorously opposed proposals to permit gays to head Boy Scout troops as well as sexual non-discrimination ordinances proposed by various cities across Michigan."

AFA-Michigan honors three citizen activists in Hamtramck...
  Each year, the American Family Association of Michigan honors citizens
  who have sacrificed their time, money, and energy in defense of traditional
  family values. At this year's banquet, we recognized the three leaders of
  last November's successful campaign to overturn a discriminatory "gay
  rights" ordinance adopted by the Hamtramck city council, which would
  have created special "protected class" status based on homosexual
  behavior and cross-dressing.
Rev. Andrew Wesley
Campaign co-chairs Rev. Andrew Wesley and Akm Rahman and campaign manager Jay McNally first conducted a successful petition drive to force
the ordinance onto the November ballot, then waged an aggressive public education campaign in four languages exposing the threat the discrimina-tory measure posed to religious liberty and the privacy rights of women
and children in public restrooms and other facilities.
                                                                                                                  Akm Rahman
  In a city that voted a whopping 85 percent for Democratic presidential
  candidate Barak Obama, voters nonetheless rejected the so-called
  "gay rights" ordinance by a ten-point margin, 55 to 45 percent. The
  city's local newspaper, the Hamtramck Citizen, in December named
  the ordinance's defeat the city's top news story of 2008. AFA-Michigan
  thanks and salutes Rev. Wesley, Akm, and Jay for their faithful, tireless,
  and effective leadership.
        Jay McNally
...and a faithful Christian expelled by Eastern Michigan University.
  We were also privileged to welcome and honor Daryl and Julea
  Ward from Ypsilanti. Julea is an African-American public school
  teacher who, until March, was also a 3.9 GPA student in the
  graduate counseling program at Eastern Michigan University
  before being expelled for refusing academic administrators'
  demand that she abandon her Christian convictions.
Four credits short of completing her Masters degree, Julea was referred a patient who wanted counseling to help improve his relationship with his homosexual "partner." Because she could not in good conscience affirm the patient's homosexual relationship, Julea followed her supervisor's instructions and asked that the patient be referred to another counselor, which he was. However, she was thereafter rebuked by her supervisor and instructed to submit to a remedial reeducation course to change her religious views, which she refused.
Administrators then conducted a formal inquisition during which they mocked and belittled her faith and pressured Julea to recant her convictions. She politely but firmly refused, calmly telling the academic elites that she would not "sell out God." In response, the panel voted to expel her from the counseling program, and after an EMU dean rejected Julea's appeal, she was expelled. The Alliance Defense Fund, a Christian legal foundation, has filed a federal civil rights lawsuit against EMU, which university officials will spend our tax dollars to contest.
Click here to read the transcript of Julea Ward's inquisition by EMU officials and her unshakeable witness:
AFA-Michigan thanks and honors Julea for the bold resolution of her faith, and we pray the Lord will grant her success in her lawsuit, reinstatement at EMU, and many opportunities in the future to positively influence the patients who seek her counsel once she has completed her degree.
Michigan's Julea Ward joins Miss California Carrie Prejean as young Christian women who
set an example for us all of principled conviction in the face of cultural hostility and persecu-tion. Julea, we salute you!

Rep. Tom McMillin: eyewitness to AFA-Michigan's effectiveness
  Rep. Tom McMillin, R-Rochester Hills, former mayor of Auburn Hills,
  former Oakland County Commissioner, and a long-time supporter and
  ally of the American Family Association of Michigan, closed the even-
  ing by sharing eyewitness testimony from Lansing of AFA-Michigan's
  effectiveness at persuading -- and when necessary, pressuring -- the
  state Legislature to preserve traditional family values in law, more often
  than not by blocking legislation hostile to those values.
  Rep. McMillin and AFA-Michigan's Gary Glenn in May were the only two
  individuals who appeared before the state House Judiciary Committee to
  testify against discriminatory so-called "hate crime" legislation that
  Rep. Tom McMillin      threatens free speech rights in Michigan.
Tom then led the opposition to the bill on the floor of the House of Representatives, where all Democrats but two voted for it, while all of his fellow Republicans but two voted against it.
AFA-Michigan thanks and salutes Tom for his long history of steadfast leadership for
traditional family values in the public policy arena.  

Questions or comments about AFA? Contact us via email, phone, fax, or postal mail.

Use your credit card online to make a tax-deductible contribution to AFA-Michigan at:

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AFA-Michigan's 2009 banquet marked the tenth year of Gary Glenn's service as president of the state's highest-profile advocate for traditional Judeo-Christian family values, during which the organization has been
recognized as a leader not only in Michigan but nationally on such issues as pornography, protecting prenatal life and religious liberty, and opposing the homosexual agenda, including Gary's co-authorship
of the Marriage Protection Amendment overwhel-mingly approved by Michigan voters in 2004.

Michigan Reclaiming Our State Sovereignty

----- Original Message -----
From: Darlenej
Sent: Thursday, May 28, 2009 2:30 PM
Subject: [tri-city912] Reclaiming Our State Sovereignty

Reclaiming Our State Sovereignty


The group participants in the Tea Party movement of Michigan are eager for knowledge.  I believe the goal should be to provide a learning platform, starting with the fundamental documents of the American Republic, followed by the founding documents that eventually led to Michigan becoming a state of the Union in 1837.

We need to provide the historical information for Michigan starting with the Northwest Ordinance enacted on July 11th, 1787.  This was the federal law for governing all territory north of the Ohio River.  Then we need to review the startling history of the two conventions held in Michigan in 1836 wherein the established political class actions in September sparked a grassroots response in December, wherein the statutory enactments of the Convention from September were OVERTURNED.  Why?  Well Michiganders in 1836 knew well their rights were endowed by God, not a politically corrupted cadre of public servants who orchestrated the assembly that met in September of 1836.

We need to read the Michigan State constitution enacted in October 1835.  Then we need to trace the deliberated changes that diminished the will of the State Citizens over the next 130 years which resulted in the Progressive (statist) Constitution of 1963.  The Constitution of 1963 diminished our standing as State Citizens, and empowered the political class sitting under the State Capitol dome.

Now 174 years later few Michiganders comprehend the historical impact of the actions that occurred from May 1835 to December of 1836.

This is why we here in the Tea Party of Michigan Groups, need to learn the rich political history of Michigan.  Here in Michigan, there was a time, as is now, when the State Citizens stood together to assert their God Given Unalienable Rights to command the offices of the Government.  Today, the Offices of Government have successfully rewritten the history of Michigan to support their Statist Creed.

The spontaneity of the Grass roots resurgence here in Michigan sparked by Glen Beck, and the Tea Party Protests has the political class scurrying about looking for ways to co-opt our reawakening to liberty.

The solution sits under the State Capitol Dome.  The State elected political bureaucracy enacts State (State plan) legislation in order to secure federal funding for administering state welfare programs.  These programs are then managed by local state employees, and overseen by federal employees.  We need to elect Michiganders whose first job is to repeal all the State Plans starting with Public Act 1 of 1936, followed by Public Act 280 of 1939 as the first steps to reasserting Michigan State Sovereignty.  These two state plans were the first federally funded state legislation that disenfranchised our Liberty as Michiganders.

Starting with Public Act 1 of 1936, the State legislature willingly and knowingly imposed a slew of new excise taxes which constructively enabled the state polity to feed at the federal trough of political corruption.  Today, Michigan, once the Automotive Capitol of the World, is now an empty shell, where the State Polity declares a fiscal crisis routinely every calendar year to substantiate their ever increasing tax burden, to support their ideologically driven welfare state of Tax and Take.

So, to restate the facts, we need to relearn our Political heritage here in Michigan, so we may then know how to politically overcome the governmental corruption that sits under the State Capitol Dome.  Contrary to what the political class would like us to believe, the solution is not in Washington D.C., for without a compliant state political class sitting under the State Capitol dome, the federal enactments have no force of law, within the political boundaries of Michigan, and the other states of the United States of America.  Read Article I § 8 of the Constitution of the United States for the United States of America

Federal legislation is constitutionally limited, and this singular constitutional fact is what is not taught in the State Controlled educational system herein the lands of the Wolverine.

The Constitution of the United States for the United States of America is a statute of limitations imposed upon the Federal Government by the States of America.

Concurrently the State Constitution is a statute of limitations authored by Michiganders to limit the reach of the State Government.  Compare the first state constitution enacted in 1835, to today's edited version enacted in 1863.  Take note what is missing and what was editorially changed to empower the political class of the welfare state.




In convention, begun at the city of Detroit, on the second Monday of May, in the year one thousand eight hundred and thirty five:


We, the PEOPLE of the territory of Michigan, as established by the Act of Congress of the Eleventh day of January, in the year one thousand eight hundred and five, in conformity to the fifth article of the ordinance providing for the government of the territory of the United States, North West of the River Ohio, believing that the time has arrived when our present political condition ought to cease, and the right of self-government be asserted; and availing ourselves of that provision of the aforesaid ordinance of the congress of the United States of the thirteenth day of July, one thousand seven hundred and eighty-seven, and the acts of congress passed in accordance therewith, which entitle us to admission into the Union, upon a condition which has been fulfilled, do, by our delegates in convention assembled, mutually agree to form ourselves into a free and independent state, by the style and title of "The State of Michigan," and do ordain and establish the following constitution for the government of the same.



Political power.

First.  All political power is inherent in the people.

Right of the people.

2. Government is instituted for the protection, security, and benefit of the people; and they have the right at all times to alter or reform the same, and to abolish one form of government and establish another, whenever the public good requires it.

No exclusive privileges.

3. No man or set of men are entitled to exclusive or separate privileges.

Take note how the Constitution of 1963 empowered the state political class, by empowering the state legislature.  Contrast the first three clauses of the 1835 Constitution to the first three clauses of the 1963 document.  The change is dynamic, as the 1963 document empowers the will of the State Government. 




We, the people of the State of Michigan, grateful to Almighty God for the blessings of freedom,

and earnestly desiring to secure these blessings undiminished to ourselves and our posterity, do

ordain and establish this constitution.


Declaration of Rights

§ 1 Political power.

Sec. 1.  All political power is inherent in the people. Government is instituted for their equal benefit, security and protection.

History: Const. 1963, Art. I, §1, Eff. Jan. 1, 1964.

Former Constitution: See Const. 1908, Art. II, §1.

§ 2 Equal protection; discrimination.

Sec. 2.  No person shall be denied the equal protection of the laws; nor shall any person be denied the enjoyment of his civil or political rights or be discriminated against in the exercise

thereof because of religion, race, color or national origin. The legislature shall implement this section by appropriate legislation.

History: Const. 1963, Art. I, §2, Eff. Jan. 1, 1964.

§ 3 Assembly, consultation, instruction, petition.

Sec. 3.  The people have the right peaceably to assemble, to consult for the common good, to instruct their representatives and to petition the government for redress of grievances.

We here in America, and Michigan itself, have been grossly misled by a self servicing political class at the federal and state level; they plunder our liberty, by imposing unbearable taxes, to fund their progressive (statist collective socialist programs of administrative control) ideology which directly suborns our Liberty as Ordained by God.

"Liberty cannot be preserved without a general knowledge among the people, who have a right, from the frame of their nature, to knowledge, as their great Creator, who does nothing in vain, has given them understandings, and a desire to know; but besides this, they have a right, an indisputable, unalienable, indefeasible, divine right to that most dreaded and envied kind of knowledge; I mean, of the characters and conduct of their rulers."

-- John Adams (Dissertation on Canon and Feudal Law, 1765)

Reference: Our Sacred Honor, Bennett, 253.


Come and join myself and others with Joan Fabiano!

Lansing,MI Independence Day Tea Party! Organized by Joan Fabiano

Join the Grassroots in Michigan army!

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