How to Eliminate All Taxes in the United States

[jaydee]

Eric Whoru has drafted a proposed 28th Amendment to the Constitution that would allow us to eliminate all forms of taxation at every level of government.

In essence, it would eliminate private banking and place all commercial lending in the hands of state run authorities. The interest money collected on all loans would then be used to fund all four levels of government: municipal, county, state and federal.

Currently, all interest money paid on loans by private sector borrowers is more than enough to fund all government in this country. Instead of all that interest money going into the pockets of private bankers, it would take the place of all taxation that now exists.

No more income tax.
No more sales tax.
No more property tax.
No more gas tax.
And so on.

This would usher in a new age of prosperity in this country like no other. All the money that everyone now uses for taxes would be left to them to spend as they wish. This would also help encourage manufacturing to return to America since business owners wouldn't have to worry about all the taxes inherent in running a business.

Every single road and bridge would then be able to be repaired with the funds that would be at the disposal of the respective governments. This improvement in the transportation infrastructure would be icing on the cake for a booming economy.

This amendment can be viewed here: http://groups.yahoo.com/group/whoru/message/285
A video on this can be seen here: http://video.google.com/videoplay?docid ... 2080377528

[jaydee]

But banking isn't anything extraordinary.

Innovation? Customer service? Choice? Competition?

The mathematics necessary to handle the financial transactions that banks do really don't require any of the aspects you mention. A thirty-year fixed mortgage at 8.5 per cent is gonna be the same no matter where you get it.

All it is is bookkeeping entries that any accountant can keep track of.

Bankers aren't these wizards who have a magical ability to create loans for people. They don't even have the money that they DO loan out. They just create an account on their books and then keep track of the payments made on that account

The key to the whole thing is where the interest money goes.

The amendment would take the decision making from the federal government and put it in the hands of the respective state legislatures.

Going to a bank would pretty much be like going to the DMV or the post office. The banks would be local government offices that handled the exact same monetary transactions that they do today.

That's a pretty good deal to put an end to all taxes.

The only true enemies of freedom are the private bankers who control a nation's currency and the government that allows them to do so.

[Nikki]

Someone has shifted from sipping KoolAid to mainlining it.

JDumb:

If the interest income from all lending goes to the federal government then:

How much are you willing to pay for a checking account, since the banks won't be getting any income to offset their costs in providing that service to you? (Costs include little things like their computer systems, their buildings, their employees, etc)

What happens to all the people who have various forms of savings accounts in banks when they are going to lose all interest income on those accounts and have to start paying the banks to warehouse their money for them?

Or are you planning on simply closing all the banks?

Then what happens to all the people who own stock in those banks -- is the government going to buy them all out? What about all the people who work for those banks -- unemployment?

Next, since I won't be able to get any interest income on my CDs or savings, I'll move all my funds to Canadian banks that still pay interest. So will millions of other people. Where will the government get the money to make all of these loans -- just crank up the inflationary printing presses?

[SteveSy]

Where will the government get the money to make all of these loans -- just crank up the inflationary printing presses?

No offense, but they do that now

[RyanMcC]

You would end up with a gigantic, bloated, corrupt, inept, bureocracy that would end up so poorly run that the government would reinstate taxes to make up for the shortfall. Guaranteed.

Aren't the banks are already gigantic, bloated, corrupt, inept, bureaucracies that are so poorly run that the government has to make up the shortfall through taxation ($800 billion bailout)?

The treasury department has already stated they will purchase bank stocks directly with some of the $800 billion bailout package. So atleast partial governmental ownership in the banking industry is going to happen anyway.

[RyanMcC]

Let's see, there is BofA, a gigantic bank which sucked up Countrywide and Merrill Lynch and HAS NOT asked for government money. Ditto Citigroup, JP Morgan Chase, and Wells Fargo - all of whom have sucked up ailing institutions and NOT asked for government money.

The banks asking for money are mid-teir regional banks who made stupid decisions and wil be bailed out, because it does less harm than a bank run and a bank panic. And yet, even the banks being bailed out still operate more effectively than any governmental banking enterprise ever could. You think the banks asking for a bailout are badly run? Can you even imagine how horribly run a government bank would be?

Snap out of it people.......

WASHINGTON (AP) — The government has cleared the way to ship out $125 billion this week to the country's largest banks, beginning the biggest government bailout in history.

"The money will go out the door for those institutions early this week," predicts Assistant Treasury Secretary David Nason, one of the chief architects of the rescue plan.

Not only is the money ready to be sent to nine major financial institutions, including Bank of America, Citigroup Inc. and JPMorgan Chase, but the government is reaching preliminary agreements with a group of more than a dozen major regional banks, who will share a part of an additional $125 billion the government hopes to pump into the banking system.

Rest of Article

The US bank rescue programme has got under way with nine firms to share $125bn (£80bn) in cash injections.

The Treasury move is designed to bolster the banks' balance sheets so they will begin more normal lending.

They are Citigroup, JP Morgan Chase, Bank of America, Goldman Sachs, Morgan Stanley, Wells Fargo, Bank of New York Mellon, State Street and Merrill Lynch.

Rest of article.

I accidentally edited this post when making a new one, I had to reproduce it.
 

[Quixote]

The idea that all private entities are more effective than any governmental ones was always questionable. Recent events make it laughable. That is not the problem with Eric Wierdo's plan. If, instead of the government running the only bank in the country, the government just owned the only bank in the country, the plan would still reek.

I'm short on time, so I'll just ask jaydee this: What would happen if China offered to refinance everyone's loan at 1/4% lower than what they're paying the US. With no refinancing fee, of course. What will the government bank, which, according to you, would only handle "bookkeeping entries that any accountant can keep track of", do in that case?

[RyanMcC]

Let's see, there is BofA, a gigantic bank which sucked up Countrywide and Merrill Lynch and HAS NOT asked for government money.

You already ceded the point, but I came across this article on the topic that is worth pointing out:

Feb. 23, 2008:

A confidential proposal that Bank of America circulated to members of Congress this month provides a stunning glimpse of how quickly the industry has reversed its laissez-faire disdain for second-guessing by the government — now that it is in trouble.

The proposal warns that up to $739 billion in mortgages are at “moderate to high risk” of defaulting over the next five years and that millions of families could lose their homes.

To prevent that, Bank of America suggested creating a Federal Homeowner Preservation Corporation that would buy up billions of dollars in troubled mortgages at a deep discount, forgive debt above the current market value of the homes and use federal loan guarantees to refinance the borrowers at lower rates.

Rest of article.

Merrill & Countrywide cost about $54 billion if I'm not mistaken.

Damn it feels good to be a banksta. (comic).
 

[Judge Roy Bean]

But banking isn't anything extraordinary.

Innovation? Customer service? Choice? Competition?

The mathematics necessary to handle the financial transactions that banks do really don't require any of the aspects you mention. A thirty-year fixed mortgage at 8.5 per cent is gonna be the same no matter where you get it.

Wow. Care to bet your house on that?

All it is is bookkeeping entries that any accountant can keep track of.

Bankers aren't these wizards who have a magical ability to create loans for people. They don't even have the money that they DO loan out. They just create an account on their books and then keep track of the payments made on that account.

Well, I can see it wouldn't be worth the time to explain how lending really works.

The key to the whole thing is where the interest money goes.

The amendment would take the decision making from the federal government and put it in the hands of the respective state legislatures.

Going to a bank would pretty much be like going to the DMV or the post office. The banks would be local government offices that handled the exact same monetary transactions that they do today.

That's a pretty good deal to put an end to all taxes.

The only true enemies of freedom are the private bankers who control a nation's currency and the government that allows them to do so.

Where would "the government" find the advanced capital to loan while waiting for the accruing interest payments to catch up?

Oh, never mind. Enough troll feeding.

[Judge Roy Bean]

Feb. 23, 2008:

A confidential proposal that Bank of America circulated to members of Congress this month provides a stunning glimpse of how quickly the industry has reversed its laissez-faire disdain for second-guessing by the government — now that it is in trouble.

The proposal warns that up to $739 billion in mortgages are at “moderate to high risk” of defaulting over the next five years and that millions of families could lose their homes.

To prevent that, Bank of America suggested creating a Federal Homeowner Preservation Corporation that would buy up billions of dollars in troubled mortgages at a deep discount, forgive debt above the current market value of the homes and use federal loan guarantees to refinance the borrowers at lower rates.

And here's how it would actually work:

And what no one wants to talk about is the fact that the really bad loans are already on the books of the special servicers at huge discounts from their face value. I can see where this will be going:

Paulsen: How much do you want for that pool?

Servicer: $50 million should do the trick.

Paulsen: Ah, well we have to know the cost basis – we’re working under the Credit Reform Act.

Servicer: $50 million. That’s what the pool is worth.

Paulsen: How much did you buy it for?

Servicer: None of your beeswax.

Paulsen: OK. Here’s the $50 million.

Servicer: Thanks, have a nice day.

A few months later Paulsen tries to sell the pool.

Paulsen: I have a deal for you. I have this pool of mortgages for sale.

Servicer: I know. One of the companies I worked for sold it to you.

Paulsen: We’re working under the Credit Reform Act rules for costing. I can sell this to you for $35 million.

Servicer: I’ll give you $10 million. Today only.

Paulsen: But we both know you got more than twice what it was worth when we bought it. You’ve already cleared $25 million.

Servicer: Aw, shucks.

Paulsen: OK. We’ll take the $10 million for it.

Servicer: Thanks, have a nice day.

It won’t take long to burn through $700 billion.

http://loansharks.blogspot.com/2008/09/ ... ts-up.html


Yep, government banking is the solution.

[jaydee]

Someone has shifted from sipping KoolAid to mainlining it.

JDumb:

If the interest income from all lending goes to the federal government then:

How much are you willing to pay for a checking account, since the banks won't be getting any income to offset their costs in providing that service to you? (Costs include little things like their computer systems, their buildings, their employees, etc)

What happens to all the people who have various forms of savings accounts in banks when they are going to lose all interest income on those accounts and have to start paying the banks to warehouse their money for them?

Or are you planning on simply closing all the banks?

Then what happens to all the people who own stock in those banks -- is the government going to buy them all out? What about all the people who work for those banks -- unemployment?

Next, since I won't be able to get any interest income on my CDs or savings, I'll move all my funds to Canadian banks that still pay interest. So will millions of other people. Where will the government get the money to make all of these loans -- just crank up the inflationary printing presses?

The interest money would for EVERYTHING you cited above. Duh!

As for the stockholders, the value at the time would be paid out accordingly. They would also still offer CDs and other savings options.

The banks really wouldn't change much at all. Only where the interest money went.

With no more taxes to pay, everyone would all of a sudden have a lot more money to spend for other things. Things for which THEY choose to use their money. They won't be having that money forcibly taken from them and then spent on things over which they have no say.

[jaydee]

All it is is bookkeeping entries that any accountant can keep track of.

Bankers aren't these wizards who have a magical ability to create loans for people. They don't even have the money that they DO loan out. They just create an account on their books and then keep track of the payments made on that account.

Well, I can see it wouldn't be worth the time to explain how lending really works.

Apparently, you are the one who doesn't understand how lending really works based on your question further down.

It's called "fractional reserve lending": A bank can loan out 90% of its deposits to borrowers. This can be repeated as many times as practical for the original amount of deposited money.

The key to the whole thing is where the interest money goes.

The amendment would take the decision making from the federal government and put it in the hands of the respective state legislatures.

Going to a bank would pretty much be like going to the DMV or the post office. The banks would be local government offices that handled the exact same monetary transactions that they do today.

That's a pretty good deal to put an end to all taxes.

The only true enemies of freedom are the private bankers who control a nation's currency and the government that allows them to do so.

Where would "the government" find the advanced capital to loan while waiting for the accruing interest payments to catch up?

There is no "advanced capital" involved now. Fractional reserve lending is what all banks do to facilitate economic activity and commerce in the community. It is actually a very good system to allow for economic expansion and prosperity in general.

[Nikki]

As for the stockholders, the value at the time would be paid out accordingly. They would also still offer CDs and other savings options.

The banks really wouldn't change much at all. Only where the interest money went.

With no more taxes to pay, everyone would all of a sudden have a lot more money to spend for other things. Things for which THEY choose to use their money. They won't be having that money forcibly taken from them and then spent on things over which they have no say.

What comes after dumb, dumber, and dumbest?

Jaydee

Mushbrain, How can the banks offer CDs and other savings options WHEN THEY CAN'T MAKE LOANS TO EARN MONEY TO PAY INTERTEST ON THEM

Where will the money come from for banks to pay their employees, their electric bills, and the interest on the CDs and so on?

You don't have a clue, do you?

[Dezcad]

As for the stockholders, the value at the time would be paid out accordingly. They would also still offer CDs and other savings options.

The banks really wouldn't change much at all. Only where the interest money went.

With no more taxes to pay, everyone would all of a sudden have a lot more money to spend for other things. Things for which THEY choose to use their money. They won't be having that money forcibly taken from them and then spent on things over which they have no say.

What comes after dumb, dumber, and dumbest?

Jaydee

And after all that is the King of Mush - EricWhoreU - watch this. Although I must warn you it is 70 minutes of nonsense ,so, if you only want to waste some time, start at minute 25 for some complete nonsense.

[jaydee]

Mushbrain, How can the banks offer CDs and other savings options WHEN THEY CAN'T MAKE LOANS TO EARN MONEY TO PAY INTERTEST ON THEM

Where will the money come from for banks to pay their employees, their electric bills, and the interest on the CDs and so on?

You don't have a clue, do you?

You seem to be good at calling people names, just like an eighth grader, but apparently, reading comprehension is your weak suit.

Where did I post that banks couldn't make loans? The banks make loans, then the interest money pays for all those things that you worry about AND funds the government.

Double DUH! for you on this one!

[Nikki]

If the interest money on the loans goes to the government, where does the bank's income come from?

As a clue, banks, today, make their profit (after covering their expenses) on the difference in rates between what they give on savings, CDs, etc and what they charge for loans.

Now, if they get a return of 0.00% on their loans (because all the interest goes to the government), where do they get the money to cover their costs and pay interest on the deposits?

I asked the same question three times and you have answered it not once.

So far, you are 0 for 3 on one simple question.

Perhaps that's (1) because the answer isn't anywhere you can cut and paste from, (2) you are too stupid to come up with an answer, or (3) there isn't any answer because your hare-brained scheme has died in the starting gate.

[jaydee]

If the interest money on the loans goes to the government, where does the bank's income come from?

OK. I'll walk you through this, step by step, because it seems that you are very dense.

People borrow money.

They pay the money back PLUS interest.

The interest money goes to pay for the operation of the government.

Since the banks are run by the government, the government pays for the operating costs of the bank out of their budget.

[jg]

Sorry jaydee; but it does not appear that the profit from banking is enough to fund the government.

From http://www.wsws.org/articles/2008/oct20 ... -o18.shtml

In an article headlined "Banks Are Likely to Hold Tight to Bailout Money," the New York Times reported Friday that Citigroup's $13.2 billion in charges and Merrill Lynch's $5.15 billion in write-downs brought the total losses of the major banks since the credit crisis erupted in mid-2007 to $323 billion, surpassing the $305 billion taken in from early 2004 to mid-2007 by Citigroup, Merrill Lynch, Bank of America, Morgan Stanley, JPMorgan Chase, Goldman Sachs, Wells Fargo, Washington Mutual and Wachovia.

In fact, profit of about $300 billion over three years does not even come close to covering the deficit for one year (let alone the entire budget for a year).

From http://www.whitehouse.gov/omb/budget/fy ... tlook.html

The 2008 deficit is projected to be $410 billion, or 2.9 percent of GDP, and the 2009 deficit is projected to be $407 billion, or 2.7 percent of GDP.

Perhaps the government should nationalize the oil industry instead ?
Oh, wait, even in a good quarter recently they only net about 35 billion ( that is, 140 billion per year)....

So, there is simply not enough money after expenses for your plan to work even if we presume that the government could effectively run such operations.

[jaydee]

Sorry jaydee; but it does not appear that the profit from banking is enough to fund the government.

This page from the Fed shows $2,500,000,000,000 in outstanding consumer debt:
http://www.federalreserve.gov/releases/g19/Current/

I'm still trying to find totals on payments actually made each month. This would include mortgages, car loans, credit cards. Any kind of loan made in this country.

When I find the final numbers, and if they don't add up, then I will agree that it won't work.

I will ask Eric where he got his numbers the next time I talk to him. He claims that the figure is six times what is necessary.

Not having a military empire all over the world would make meeting budget a hell of a lot easier.

[Nikki]

Let's assume JD is not totally talking out of his ass and analyze his proposal a little.

Okay, we are going to accept that there's $2.5 trillion (too many zeros to type) out there in outstanding consumer debt.

Let's also accept that it's all in current payment status and that it's all collectable. I realize that's a major stretch, but I'm giving JD the benefit of the rules that apply on his planet.

Now, let's make up some numbers. If we assume a relative balance between outstanding mortgages, car loans, credit cards, etc, we can come up with an interest rate for all of those loans. Let's make it 15%. That means the $2.5 trillion in debt is going to generate $375,000,000,000 -- before expenses -- to the federal government.

Next, let's assume that the federal government's credit card, car loan, mortgage, etc operations are so efficient that there's absolutely no overhead cost.

Okay. We now have $375 billion in income.

But -- wait for it -- there's one minor problem.

The annual debt service cost on the national debt is in the range of $200 billion ($4 trillion of debt at 5% interest rate).

It seems that, after debt service, there's only $175 billion left to fund the entire operations of all the governmental operations in the entire country.

JD: Game over. You lose again.