(lengthy) HOW TO REIN IN CONGRESS AND OBAMA

Submitted by: Debbie Beatty

The CONSTITUTONAL SUPPORT TAX (the CST)

 

A States-based system to pay for Federal
expenditures that ends the Federal Government’s
power to tax and borrow money

 

Why the CONSTITUTIONAL SUPPORT TAX (the CST, www.constitutionalsupporttax.net) Will be a Highly Effective Tool to Shrink the Size of the U.S. Federal Government (“the Feds”) and Keep It Within the Limited Government Intent Built Into the Constitution.

 

Before beginning, please read the following four key “structural” points of the CST.  Understanding these four will make it easier to understand how and why the “operational” points that follow will place much-needed restrictions on Federal spending.

 

The four key structural points of the CST are:

 

1. The power to lay and collect Taxes, Imposts and Excises will be repealed from Article I, Section 8, Paragraph 1(I-8-1) of the Constitution along with the 16th Amendment.  The power to lay and collect Duties, presently in I-8-1, will remain with Congress. 

 

2. Article 1, Section 8, Paragraph 2 (I-8-2), authorizing Congress’ power to borrow will also be repealed.

 

3. Once Congress sets the Federal Budget each year, the dollar amount of the Budget will be divided among the States by a formula that is fair to all States. This five-part formula is explained in the HOW IT WORKS section of the CST website.

 

4. It will then be up to the People of each State, and state and local officials, to decide how their State will pay its share of the Budget.  This is similar to Article VIII of the Articles of Confederation, but unlike the Articles, payment will be mandatory. 

 

The Feds, through Congress, is the only jurisdiction in the USA that has the power “To coin Money, regulate the Value thereof; ...” ((Article I, Section 8, Paragraph 5 of the Constitution. (I-8-5.))

 

I-8-1, I-8-2, I-8-5 and the 16th Amendment are the “Big Four” that give the Federal Government monopoly control over its own financing.

 

Exactly how does this work out in practice? Quite simply, the Feds can tax, borrow or print as much money for itself as it wishes.  This is how things have worked out, with taxation, Federal borrowing in the U.S. and worldwide credit markets, and the Federal Reserve purchasing various bonds and securities the Department of the Treasury regularly issues.  The net result of this Federal Reserve/Treasury “process” creates money with nothing more than debit/credit accounting journal entries.  

 

The hard reality of economic scarcity does not affect the U.S. Government in the same way that all Americans and State and local jurisdictions are affected by economic scarcity.  When taxation of Americans has been “maxed out,” the Feds can have the Federal Reserve print money. This makes their ultimate spending limit far more “elastic” than the spending limits on the rest of America.

 

Unless and until the Federal Government is forced into a position where money is a far scarcer commodity, nothing will change with massive overspending. The Federal Bureaucracy is deeply entrenched, with many big spending interests attached to it.

 

Wayne Rogers, the former MASH TV star, is a commentator on a Saturday morning FOX News business show.  On July 21, 2012 Rogers commented that the Federal Bureaucracy runs the Federal Government, not Congress. It’s hard to argue with this position.

 

Given Rogers’ comment, it’s clear unless there was a Congress with 535 staunch Tea Party conservatives in place it would be hard to containing the spending pressure.  And unfortunately, we will never have a Congress of 535 staunch Tea Party conservatives.

 

The CST is the only way to put the Federal Government in the long overdue “scarce commodity” money position in which it needs to be.

 

Here are some operational points to consider.  (In no particular order. The readers of this will probably think of many more):

 

1. The Feds is the only jurisdiction in America with the power to create money.  The lack of other jurisdictions having this money creating power places a “marketplace discipline”, of sorts, on them to live within a budget.  They are FORCED to live within a budget.

 

2. Congress will be forced to develop budgets that are well within the limits of Constitutional intent.  Why? As noted in point 3 above, the States will provide the money to pay for the Federal Budget.  The States and People will not want to pay for conferences where General Services Administration officials are photographed lounging in bathtubs drinking wine and other such wastes of money.

 

3. Under the CST, all of the money that had been going to the Feds by taxation and borrowing will be back in the pockets of Americans.  Americans will be reluctant to have their States pay the Federal Government for anything other than the “common defence.” The Preamble to the Constitution states is the only thing to be “provided for” by the Federal Government is common defence.

 

4. As pointed out in PRESSURE POINT 4 of 8 on the CST website, the States, localities and the People, will quickly become an informal “benevolent and protective fraternal association” (BPFA) over the former Federal dollars that now have returned to their pockets.

 

5. Now (Summer 2013) 90% of the reason the Federal Reserve System exists is to print money to fund the massive overspending of the Feds.  Under the CST, this 90% need evaporates.  The Feds expenditures will come from the States. The Federal Reserve, in the future, will focus on the routine functions of inter-bank administration.

 

6. Congress will have the power to mandate that each State pay its share of the Federal Budget.  However, any Congressman or Senator will be terrified of making political enemies of the People and State and local officials by shoving spending into the Budget beyond national defense and the basic administration of the three branches of Federal Government.  (Please see the five-step accounting process for dividing the Federal Budget among the States in the HOW IT WORKS section of the CST website.)

 

7. The CST is a 21st Century update to Article VIII of the Articles of Confederation. The Articles preceded the Constitution.  Article VIII used real estate values in the new States to divide the costs of the “Union” government (mainly fighting the Revolutionary War) among themselves. The CST uses aggregate IRS Form 1040 total incomes of all residents of a State for dividing the general costs of Federal Government among the States and Washington, D.C.

 

8. In Federalist Paper #45, James Madison states that the powers of the government being created by the proposed Constitution are “few and defined.” The powers remaining with the States are “numerous and indefinite.” (The Federalist Papers, ISBN 0-451-62541-2, pgs. 292/3.)

 

9. At the time the Constitution was written, it was clearly understood that future matters would occur that were never foreseen in the 1780s.  Therefore the Constitution did not, nor could it, put in place a structure so that as these future matters occurred it would be easy to know how to “assign ” them to either the Federal Government or the States.

 

10. The CST approach to funding the Federal Government will provide a “negotiating framework” to address the “difficulty of assignment” task of point 9, if a new matter even requires some level of government involvement. 

 

The Federal Government has gotten used to simple forcing itself on the nation on virtually every conceivable matter.  With the CST, the Federals will have little choice but to go to the States for money.

 

PRESSURE POINT 4 of 8 in the PRESSURE POINTS section of the CST website (see point 4 above) also poses a question.  The States, “locals” and the People will be continually pointing to the Constitution and asking the Federal Government “Where is you Constitutional authorization to become involved in a particular matter and to spend the money you want to spend?”

 

The Feds will have no power to tax or borrow. Through the CST Amendment adding the CST to the Constitution (detailed below) they will face very tight restrictions on any other ways to raise money. 

 

The net result of this will be to keep the Federal Government within the tight parameters of the Constitution.  The question about Constitutional authorization will be the ongoing negotiating framework where the appropriate level of government will be determined. 

 

If any readers think of any of any additional points, please forward them to me at the following U.S. mail or email addresses.

 

The draft of the CST Amendment to the United States Constitution follows.  Thank you for your consideration.

 

Cy Mallinson     1311 Manor St.     Kalamazoo, MI 49006-2143     1-269-342-0410        cy.mallinson@aol.com  or cmallinson@aol.com

 

The CONSTITUTIONAL SUPPORT TAX Amendment to the United States Constitution

 

(The CST is a 21st Century update to Article VIII of the Articles of Confederation discussed in Item 5.)

 

There are four purposes to this proposed Amendment to the United States Constitution. They are:

 

1. To establish a system of providing money to fund Federal Government activities through the States. This includes a formula for apportioning the annual Federal Budget among the States by a formula that is fair to all States. This will eliminate the powers of Congress to lay and collect Taxes, Imposts and Excises stated in Article I, Section 8, paragraph 1 of the Constitution, plus repeal the 16th Amendment to the Constitution. Additional detail is on the CST website www.constitutionalsupporttax.net.

 

2. Repeal Congress’ authority to borrow money on the credit of the United States contained in Article I, Section 8, paragraph 2.

 

3. Establish a fund, through Tariff or Customs Duty money collected, for the care and support of family members of the military killed in action, and veterans with service-connected disabilities. This fund will be in excess of any money currently budgeted through the congressional appropriations process for such care and support. This refines and adds specification to the statement in the Preamble to the Constitution to provide for the “common defence.”

 

4. To provide clear guidance for prohibiting the United States Federal Government from engaging in selling goods or rendering services in the commercial marketplace.

 

The following is an initial draft of this proposed Amendment.

 

1. The power of the Congress to lay and collect Taxes, Imposts and Excises enumerated in Article I, Section 8, paragraph 1 of the Constitution of the United States is hereby repealed.

 

2. The power of Congress to borrow money on the credit of the United States, enumerated in Article I, Section 8, paragraph 2 of the Constitution of the United States is hereby repealed.

 

3. The 16th article of amendment to the Constitution of the United States is hereby repealed.

 

4. Money needed to fund operations of the United States Federal Government shall be provided by the governments of the States comprising the fifty States of the Union, plus the municipal government of the District of Columbia, and any future States or District of Columbia-type units duly becoming part of the Union. The total funds needed to pay for the annual GENERAL BUDGET EXPENDITURES as presented in the annual Federal Budget will be allocated among these units of government comprising the Union, based on the following formula: (Note 1: GENERAL BUDGET EXPENDITURES are explained in the HOW IT WORKS section of the CST website, www.constitutionalsupporttax.net.)

 

(a) All human individuals receiving, or constructively receiving income, income as defined in the now superseded Internal Revenue Code of 1986, as amended, will compute his or her annual yearly income. Such income will be classified in accordance with the income lines 7 through 21 on the first page of Federal tax return Form 1040 used for the year 2012, provided for in the now superseded Internal Revenue Code. (Note 2: Enabling legislation will likely be needed here to “reestablish” the use of 1040, 1040A, and 1040 EZ, but only for the purpose of developing an apportionment formula, not for calculation of any tax due.)

 

(b) The total of the income amounts listed on lines 7 through 21, including formerly tax-exempt amounts listed on line 8b, will be reported by the individual to the duly designated state revenue department, bureau, agency or office of the individual’s State of residence. The individual will also report the same total income amount to the duly designated Federal department, bureau, agency or office.

 

(c) Each state department, bureau, agency or office will total all individual incomes reported by the residents, or nonresident aliens with income, of their jurisdiction. The designated Federal department, bureau, agency or office will also compute total income for each State, District, or other jurisdiction that is included in the Union. (Note 3: Once this step is completed at both the State and Federal levels, the dollar totals computed by the State tax agencies and Federal tax agency will be cross checked to insure the totals are equal. There will be details, such as nonresident aliens, that Congress will address through “appropriate legislation.”)

 

(d) A national total of income, calculated by adding the jurisdiction total incomes of all jurisdictions recognized as being part of the Union, will be computed and reported in the public record.

 

(e) The percentage that the income of each jurisdiction in the Union contributes to the national total of income will then be computed.

 

(e) The percentage computed in point 4(e) for each jurisdiction in the Union will be applied to the total GENERAL BUDGET EXPENDITURES to calculate the dollar amount of each jurisdiction’s mandatory contribution to the Federal Treasury.

 

(f) Each jurisdiction in the Union will, at its own choice and option, select the method(s) of raising its ratable mandatory contribution to fund its share of the annual Federal Budget; provided that such method(s) do not infringe upon, or draw from, the resources of another State jurisdiction, or local jurisdiction within another State, unless there is mutual consent for such to happen.

 

(g) Each jurisdiction in the Union will, at its own choice and option, select the method(s) of raising its ratable mandatory contribution to fund its share of the annual Federal Budget; provided that such method(s) do not infringe upon, or draw from, the resources of another State jurisdiction, or local jurisdiction within another State, unless there is mutual consent for such to happen.

 

5. The net proceeds of any collections of Duties, in excess of collection costs as determined under generally accepted accounting principles, shall be held in a separate fund for distribution to family members of the military members who died as a result of injuries incurred in action, followed by military veterans with service-connected disabilities. Transferring, using or spending these funds for other uses is prohibited. Priority on the annual distribution of these funds shall first go to surviving spouses and natural or legally adopted children, then to surviving parents, then surviving siblings, followed by those with service-connected disabilities, in proportion to their level of disability. (Note 4: For those who die of injuries received in action, benefits should be paid from the Duty Fund for a period of time from the date of death, perhaps five years. This will be a matter of “appropriate legislation” by Congress.)

 

(Note to readers.  Point 5 could be called the “Donald Trump clause” of the CST.   When being interviewed of the FOX News Channel or FOX Business Network, New York real estate developer Donald Trump said the USA should require Iraq to reimburse us for our costs in liberating them from Sadam Hussein.  If memory serves me correctly, I believe he said the amount could come to about $1 trillion.  Trump then suggested that our servicemen or their survivors, or those or with service-connected disabilities, should receive $4 or $5 million a piece out of Iraq’s payments.  This is unlikely to happen.  Under the CST the Federal Government will receive all of the money to fund the Budget from the States.  However, tariffs and duties wiIl still be collected.  In lieu of the money that Iraq should, but never will pay, why don’t we “put our money where our mouth is” by distributing the yearly tariff and duty collections to the surviving family and the wounded?  Each family of a deceased serviceman, or the serviceman with a service-connected disability, would receive a lifetime total of up to $6 or $7 million dollars per serviceman.  Please think about it.  Tariff and duty collections amounted to about $25 billion in 2010.)

 

6. In the event that the serviceman was not legally married at the time of death from wounds incurred in action, the money from this Duty Fund assigned to the serviceman shall be distributed to relatives in the same priority pattern specified in point 5. The money in the Duty Fund will be considered to be in addition to those funds allocated for the treatment, care and support of military veterans with service-connected disabilities determined through the congressional budgeting and appropriation process.

 

7. The Executive Branch shall have the power to administer this fund created by net Duty collections, based on appropriate legislation by Congress.

8. The United States Federal Government is prohibited from engaging in the production, manufacture, fabrication, assembly or similar product creation and development activities for goods to be offered for sale in commercial markets whether such markets are State, national or international. The sale of goods that would accrue to the financial benefit of the Federal Government is prohibited.

 

9. The United States Federal Government is prohibited from obtaining ownership in, OR THROUGH ANY FORM OF DEBT INSTRUMENT BECOMING A LENDER TO, OR LOAN GURANTOR OF, either directly, indirectly, or through any entity, or renting, or leasing of any tangible or intangible property, including, but not limited to, machinery, equipment, vehicles, computer or data processing hardware and/or software, land, buildings or any other tangible or intangible items, if such control would result in the creation of goods for sale in the commercial marketplace through non-Federal Government entities. The accrual of any financial benefit to the Federal Government is prohibited.

 

10. The United States Federal Government is prohibited from offering for sale in commercial markets, through its common law employees or independent contractors, or others operating in a capacity similar to employees or independent contractors, any activity or activities of a service, or personal service nature.

 

11. The United States Federal Government is prohibited from taking any action(s) including but not limited to the follow ing: establishing, incorporating or otherwise creating any bureau, department, office, internal operating unit identified as an administration or similar term, agency, governmental or quasi-governmental authority, or other not-for-profit-type operating entity, if the operation and/or activities of such agency, authority, entity or similar organization would accrue to the financial benefit of the Federal Government; this prohibition extends to the Federal Government acquiring or creating, through incorporation or similar legal device an ownership interest in any private firm, company, corporation, trust, partnership or similar venture with a legal structure enabling it to engaged in the sale of goods, services, or services of a personal nature in the commercial marketplace that would result in the accruing, to financial benefit of the Federal Government, from the sale of such goods, services, or personal services.  This prohibition includes any activity of any unit described in this section if the operation of such unit did not accrue to the financial benefit of, either directly or indirectly, the Federal Government. THE U. S. FEDERAL GOVERNMENT IS PROHIBITED FROM BECOMING A DIRECT OR INDIRECT LENDER TO, OR LOAN GURANTOR OF, ANY DEBT OBTAINED BY ANY ORGANIZATION IDENTIFIED, DESCRIBED, OR SPECIFIED IN THIS CLAUSE.

 

12. Nothing in this Amendment shall be construed to prohibit the Federal Government from engaging in leasing or similar arrangements for the extraction of mineral or energy resources from Federally-owned land, or land over which the Federal Government holds legal control, with non-Federal parties, whether such is dry land or under off-shore or on-shore bodies of water under Federal jurisdiction; or to prohibit agreements with non-Federal parties for the use of Federal land, or land over which the Federal Government has legal control, for timber cutting, agricultural uses, domesticated animal grazing or other land use activities.  This provision will not apply to any land identified in this provision that was purchased by, or that came under the control of, the Federal Government later than one calendar year to the day before the ratification and addition of this Amendment to this Amendment to the Constitution.

 

13. Nothing in this Amendment shall be construed to prohibit the Federal Government from selling, in the open market, property such as, but not limited to, land, buildings, equipment, vehicles, computer hardware and the like, that has been owned and/or used by, or has been under the control and/or ownership of the Federal Government, and has been deemed, through normal operational review procedures, to be obsolete, surplus, in condition beyond repair, or no longer necessary for the conduct of Federal Government operations.

 

14. Nothing in this Amendment shall be construed to prohibit the Federal Government from levying or charging fees to individuals, or groups of individuals, for voluntary entrance by them to Federal facilities deemed to have national historic, or similar value, that are maintained for general public attendance or visitation; or for charges and/or fees to such visiting individual(s) for the purchase of nutritional products; or for charges to individuals for their voluntary retail purchase of products associated with such Federal facilities; the Federal Government, at its option, may engage non-Federal parties for the management and/or administration of such Federal facilities.

 

15.  The United States Federal Government is prohibited from taking any of the following actions, including but not limited to: setting, establishing, determining, or otherwise fixing the amount, in any medium of exchange recognized and/or used in international finance (including, but not limited to, a medium of exchange composed of any metallic or other commodity, any form of printed or otherwise created tender, digital, binary or other form of electronic tender) the amount of charges and/or fees between non-Federal parties engaged in the exchange of any products, any services, and/or any services of a personal service(s) or human care nature. This prohibition extends to and includes any identical, similar, relevant, related or associated matter where the amount of charges and/or fees are set, determined, established or fixed by barter exchange valuation, or any non-currency unit of measure.

 

16. The Congress shall have the power to enforce this article by appropriate legislation.