Rep. Tancredo States: Additional Hidden “Excise” Taxes Assessed by Congress Equal 40% or More of an American’s Income.

NOTE:  LEST THERE BE ANY DOUBT, LET IT BE KNOWN this is not a tax protest post nor is it legal advice.  Americans are advised to pay each and every tax to which they are “lawfully obligated” to pay to whomever.

On July 1, 1999, Representative Thomas Gerard “Tom” Tancredo stood before Congress and argued that 10 federal taxes be removed by repeal of Congress.  Rep. Tancredo stated these taxes were included in the overall tax burden placed on an American and equaled 40% or more of their income and 20% of GDP.  That was in 1999.

The arguments were made for repeal of these taxes and have been largely ignored as is shown below where these specific 10 taxes are reviewed as of 2011 versus 1999.  Most of them still exist and some have been increased.

Not only do these taxes continue unabated, but now Americans now face $61.6 Trillion more dollars in unfunded obligations (mandates) which are assessed against them to the extent of $528,000/household.  See, ____________________________________

For an actual Transcript Copy of the following statement, please click here.

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The SPEAKER pro tempore. Under a previous order of the House, the gentleman from California (Mr. FILNER) is recognized for 5 minutes.

(Mr. FILNER addressed the House.

His remarks will appear hereafter in the Extensions of Remarks.)

The SPEAKER pro tempore. Under a previous order of the House, the gentleman from Pennsylvania (Mr. PETERSON) is recognized for 5 minutes.

(Mr. PETERSON addressed the House. His remarks will appear hereafter in the Extensions of Remarks.)

The SPEAKER pro tempore. Under a previous order of the House, the gentlewoman from the District of Columbia

(Ms. NORTON) is recognized for 5 minutes.

(Ms. NORTON addressed the House. Her remarks will appear hereafter in the Extensions of Remarks.)

ENOUGH IS ENOUGH

The SPEAKER pro tempore. Under a previous order of the House, the gentleman from Colorado (Mr. TANCREDO) is recognized for 5 minutes.

Mr. TANCREDO.  Mr. Speaker, we often hear people stand up in front of this microphone and start out by saying, ‘‘It is about,’’ when they are going to talk about what it is about. Well, in fact in this body it is about taxes.  No matter what else we say, no matter what else we do here, it is about taxes.  It is the life blood that drives every other thing we do in this body, and the extent to which we can defend our country and incarcerate criminals and carry out all the other essential functions of government depends upon our ability to extract money from the population and pay for those services.  But when is enough enough?  Is it enough, Mr. Speaker, to take 40 percent of the income of the average family in America today for taxes?  Is it enough to take 20 percent of the gross domestic product of this country every year now in taxes?  Is that enough, Mr. Speaker?

I suggest it is not only enough, I suggest it is far too much.  That is why today I have introduced the bill that we refer to here as the 10 top terrible tax act.  This is a bill to actually eliminate, not just reduce certain taxes, but actually eliminate certain taxes so that they cannot grow back again. We want to pull them up by their roots.

Mr. Speaker, this is the only way that we can actually begin to reduce the size and scope of government.  We talk about that here on this floor, and we talk about it in legislative bodies all over this country, reducing the size and scope of government.  How many times have we heard that phrase?  And yet nothing seems to actually accomplish the task of reducing the size and scope of government.  There seems to be a commitment to that philosophy, but it does not work.

Mr. Speaker, one reason it does not work is because we do not put a constraint on the life blood of these legislative bodies, and that life blood, I repeat, are the tax dollars that we extract

in the population.  Well, this does begin to put that constraint on that life blood flow, and it does begin to reduce the size and scope of government and its intervention into our lives which has grown far too great.  Mr. Speaker, at 40 percent of the income of a family, I repeat 40 percent, and 20 percent of our gross domestic product it is too much.  Something has to give, and if we just simply reduce the rate of taxation, it is far too easy to come back within a year or 2 years and simply increase it again.  That is easy to do. But it is very difficult to actually come back and replace a tax that has been eliminated.

Mr. Speaker, that is why we have identified 10 taxes that are legitimate targets for us to attack as being able to be eliminated, gone, erased from the books, not there any more:  The estate tax, estate and gift tax, more commonly and appropriately referred to as the death tax; it is currently as high as 55 percent, and we want to phase that out over a 10 year period and completely repeal it by December 1, 2099.  The E-rate universal tax; that is a euphemism, E-rate is a euphemism, for a tax. It is a tax that has been put on phone bills that did not even come through this body as an actual tax bill.  It is a special friend, a special sort of tax of the Vice President.  It is oftentimes referred to as the Gore tax, and appropriately so.  Next is the excise tax on telephones and other communication services.  My friends, this is the 3 percent tax that was put on telephones when they were a luxury item in 1898 in order to fund the Spanish-American war.  Let me tell my colleagues it is over, the war is over, and we do not need this tax any more.  The marriage penalty tax discrepancy in the Tax Code that results in a higher tax burden for married couples; let us get rid of it.  The capital gains tax, currently up to 20 percent of gain would be phased out over a 10 year period. Let us get rid of it.  The excise tax on vaccines, on vaccines.  Do you hear me? Seventy-five cents per dose imposed on certain vaccines sold in the United States; this should be repealed by January 1, 2000.  Why are we taxing vaccines, let me ask.  Excise tax on sport fishing equipment.  The 1993 income tax increase on Social Security benefits.  The double tax on interest and dividends.  The 1993 increase in motor fuels tax.

Mr. Speaker, all these should be gone, and they can be. We can live without it, believe it or not. We can live without this.  I want to enter into the RECORD, if I could, Mr. Speaker, the comments here from the Americans for Tax Reform and other organizations that have supported the bill, and I ask my colleagues to do so. It is enough.

AMERICANS FOR TAX REFORM,

Washington, DC, July 1, 1999.

Hon. TOM TANCREDO,

Washington, DC.

DEAR REPRESENTATIVE TANCREDO:  On behalf of its 90,000 members and its 3,000 state and local taxpayer groups across the nation, Americans for Tax Reform strongly supports your ‘‘Top Ten Terrible Tax Act of 1999.’’  As you already know, American families already pay on average almost forty percent of their income on taxes, be it federal, state, or local. That is more than food, shelter, and clothing combined. The Top Ten Terrible Tax Act of 1999 would eliminate excessive taxes and provide every American with tangible tax relief. By uprooting the death and gift taxes, the telephone universal service charge, the 3% telephone excise tax, the marriage penalty tax, the capital gains tax, the excise tax on vaccines, the excise tax on sport fishing equipment, the 1993 income tax increase on social security benefits, the double taxation on interest and dividends, and the 1993 motor fuel tax increase, taxpayers will be able to improve their quality of life and save more for education and retirement.

I thank you for your leadership in taking a step in the right direction to providing fundamental tax reform.

Sincerely,

GROVER G. NORQUIST.

_________________________________________

Status of the 10 Taxes Specified by Rep. Tancredo as of December 29, 2011

The Tax on Sporting Good and Fishing Equipment remains  SOURCE

Sport Fishing Equipment  – A tax of 10% of the sale price is imposed on many articles of sport fishing equipment sold by the manufacturer. This includes any parts or accessories sold on or in connection with the sale of those articles.

Pay this tax with Form 720. No tax deposits are required.

Sport fishing equipment includes all the following items.

  1. Fishing rods and poles (and component parts), fishing reels, fly fishing lines, and other fishing lines not over 130 pounds test, fishing spears, spear guns, and spear tips.
  2. Items of terminal tackle, including leaders, artificial lures, artificial baits, artificial flies, fishing hooks, bobbers, sinkers, snaps, drayles, and swivels (but not including natural bait or any item of terminal tackle designed for use and ordinarily used on fishing lines not described in (1)).
  3. The following items of fishing supplies and accessories: fish stringers, creels, bags, baskets, and other containers designed to hold fish, portable bait containers, fishing vests, landing nets, gaff hooks, fishing hook disgorgers, and dressing for fishing lines and artificial flies.
  4. Fishing tip-ups and tilts.
  5. Fishing rod belts, fishing rodholders, fishing harnesses, fish fighting chairs, fishing outriggers, and fishing downriggers.

See Revenue Ruling 88-52 in Cumulative Bulletin 1988-1 for a more complete description of the items of taxable equipment.

Fishing rods and fishing poles.   The tax on fishing rods and fishing poles (and component parts) is 10% of the sales price not to exceed $10 per article. The tax is paid by the manufacturer, producer, or importer.

Fishing tackle boxes.   The tax on fishing tackle boxes is 3% of the sales price. The tax is paid by the manufacturer, producer, or importer.

Electric outboard boat motors.   A tax of 3% of the sale price is imposed on the sale by the manufacturer of electric outboard motors. This includes any parts or accessories sold on or in connection with the sale of those articles.

Certain equipment resale.   The tax on the sale of sport fishing equipment is imposed a second time under the following circumstances. If the manufacturer sells a taxable article to any person, the manufacturer is liable for the tax. If the purchaser or any other person then sells it to a person who is related (discussed next) to the manufacturer, that related person is liable for a second tax on any subsequent sale of the article. The second tax, however, is not imposed if the constructive sale price rules under Internal Revenue Code section 4216(b) apply to the sale by the manufacturer.

If the second tax is imposed, a credit for tax previously paid by the manufacturer is available provided the related person can document the tax paid. The documentation requirement is generally satisfied only through submission of copies of actual records of the person that previously paid the tax.

Related person.   For the tax on sport fishing equipment, a person is a related person of the manufacturer if that person and the manufacturer have a relationship described in Internal Revenue Code section 465(b)(3)(C).

Bows, Quivers, Broadheads, and Points

The tax on bows is 11% (.11) of the sales price. The tax is paid by the manufacturer, producer, or importer. It applies to bows having a peak draw weight of 30 pounds or more. The tax is also imposed on the sale of any part or accessory suitable for inclusion in or attachment to a taxable bow and any quiver, broadhead, or point suitable for use with arrows described below.

Arrow Shafts

The tax on arrow shafts is listed on Form 720. The tax is paid by the manufacturer, producer, or importer of any arrow shaft (whether sold separately or incorporated as part of a finished or unfinished product) of a type used in the manufacture of any arrow that after its assembly meets either of the following conditions.

  • It measures 18 inches or more in overall length.
  • It measures less than 18 inches in overall length but is suitable for use with a taxable bow, described earlier.

Exemption for certain wooden arrows.    After October 3, 2008, the tax does not apply to any shaft made of all natural wood with no laminations or artificial means of enhancing the spine of such shaft (whether sold separately or incorporated as part of a finished or unfinished product) and used in the manufacture of any arrow that after its assembly meets both of the following conditions.

  • It measures 5/16 of an inch or less in diameter.
  • It is not suitable for use with a taxable bow, described earlier.

The Tax on Vaccines remains at $0.75 per dose.  SOURCE

Vaccines Tax is imposed on certain vaccines sold by the manufacturer in the United States. A taxable vaccine means any of the following vaccines.

  • Any vaccine containing diphtheria toxoid.
  • Any vaccine containing tetanus toxoid.
  • Any vaccine containing pertussis bacteria, extracted or partial cell bacteria, or specific pertussis antigens.
  • Any vaccine containing polio virus.
  • Any vaccine against measles.
  • Any vaccine against mumps.
  • Any vaccine against rubella.
  • Any vaccine against hepatitis A.
  • Any vaccine against hepatitis B.
  • Any vaccine against chicken pox.
  • Any vaccine against rotavirus gastroenteritis.
  • Any HIB vaccine.
  • Any conjugate vaccine against streptococcus pneumoniae.
  • Any trivalent vaccine against influenza.
  • Any meningococcal vaccine.
  • Any vaccine against the human papillomavirus.

The tax is $.75 per dose of each taxable vaccine. The tax per dose on a vaccine that contains more than one taxable vaccine is $.75 times the number of taxable vaccines.

Telephone Long Distance Tax of 3% Imposed since 1898 – EndedSOURCE  But it was replaced AND INCREASED to 5%:  “…Taxes on mobile phone use are so high that you might wonder whether the government considers their use a vice, like the consumption of alcohol or tobacco. A pack of smokes costs about $5, on top of which state tax will add, on average, $1.45. That’s an average tax rate of 22 percent. In the states of Nebraska, Washington, or New York—where taxes on cellular service are highest—the combined state and local tax is 18 or 19 percent, which isn’t too far behind.  Nationwide, the average state-local tax burden on cell phone service is 11 percent, compared with an average general sales or use tax of only 7 percent.   Federal taxation of cigarettes (a federal excise tax of about 25 percent is built into the price of a pack) is much more onerous than federal taxation of cell phone use (a 5 percent surcharge paid into the Federal Communication Commission’s Universal Service Fund, which subsidizes schools, libraries, hospitals, and rural providers). But when combined with state and local taxes on mobile phone service in Nebraska, Washington, or New York, the total tax burden is 22 or 23 percent. Nationwide, the combined federal-state-local tax on cellular phone service averages 16 percent.”  SOURCE

The Estate and Gift Tax Obligation was changed however research is continuing as to how this impacts Americans across economic demographics.

The Gore Tax or E-Tax or Universal Fund remains an assessed obligation through broadband providersSOURCE:  “The Senate bill “Communications, Consumer’s Choice, and Broadband Deployment Act of 2006” says that all communications revenues are now to be assessed for the “Universal Service Fund” – including broadband internet and voice over internet. For Congress this is a major change in policy from as recently as last fall when a bill to exempt internet services from taxation was extended for several more years.  Presently communication services excluding broadband and voice over broadband are taxed at the rate of 8-9% for the Universal Service Fund.  Now taxes from broadband service or voice over internet can be used by the Universal Service Fund to support telephone or cell phone services.  The Senate bill calls it “stabilization of the Universal Service Fund”.   As an example if you are paying $30 per month for broadband internet add another $2.50 per month in federal tax assuming your internet provider passes the entire tax on to consumers.  Also state governments are allowed under the Senate bill to tax broadband services for their own Universal Service fund so the total tax hit could easily be in excess of 10%.  State legislatures love to tax communication services and will be sure to take full advantage of any new law allowing them to tax broadband services.

A new account is set up for broadband Universal Fund expenditures in “un-served” areas, not to exceed $500 million per year. An “un-served” area is any area that lacks broadband service other than satellite broadband services. I would guess up to 50% of the land area of the US presently lacks broadband services.

The Marriage Penalty Tax disappeared Temporarily and then Retrned.  SOURCE:

The marriage tax penalty was set to make a comeback in 2011. Lets take a look at the marriage tax penalty, an often confusing and overused term, to see what it really means and why it’s coming back.

Update: Congress passed the tax deal to extend the 2011 tax rates. Included in the tax deal was an extension on the elimination of the marriage tax penalty for two more years. The marriage tax penalty is now scheduled to return in 2013.

What is the Marriage Tax Penalty?

Ten years ago, married couples had to pay more than double the taxes they would if they were two single filers. Owing more tax as soon as you married became known as the marriage tax penalty.  The culprits of the marriage tax penalty were standard deductions and tax brackets that were only larger than, but not double, the single deductions and brackets.

Marriage Tax Penalty History

When the 2001 Bush tax cuts were put in place, the marriage penalty tax was eliminated for most taxpayers by doubling the single standard deduction for married taxpayers. The tax brackets were also aligned accordingly, so there wouldn’t be any additional taxes just for getting married.

Marriage Tax Penalty Returns

When the Bush tax cuts and the 2011 tax deal expire at the end of 2012, the marriage tax penalty will return, increasing taxes for many married couples.  The amount of tax differences will vary based on your situation. You can use the tax calculator to try to predict how it will impact your family. To use it as a marriage penalty calculator, fill it out twice, once as single and once as married to see the differences. Those taking the biggest hit will be couples with one large income and one smaller income. Right now, couples with very different incomes often see a marriage tax benefit, sometimes called a marriage tax credit, under the current rules.

Whether the following 3 taxes still exist, have been increased or are now assessed under different names remains under investigation.  The point has been amply demonstrated that Congress has not responded to what Rep. Tancredo demanded.

  • The 1993 income tax increase on Social Security benefits.
  • The double tax on interest and dividends.
  • The 1993 increase in motor fuels tax.

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What is an excise tax?  To be continued.

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