-Caveat Lector- from: http://www.cats.org/articles/3039sum.html <A HREF="http://www.cats.org/articles/3039sum.html">H.R. 3039 Summary</A> ----- SUMMARY H.R. 2001 National Retail Sales Tax Act of 1997 ------------------------------------------------------------------------ Income Tax Repealed The personal and corporate income taxes, estate and gift taxes and all non-trust fund dedicated excise taxes are repealed. IRS Abolished The Internal Revenue Service is de-authorized, as of FY 1999, allowing time to close out previous tax years. No Successor agency is established Sales Tax Imposed A tax of 15 percent is imposed on the gross receipts from the sale of any taxable property or service sold in the United States. The amount of tax paid on every transaction must be disclosed to the consumer. Use Tax Imposed A tax is also imposed on the use or consumption in the U.S. of any taxable good or service for which the sales tax was not paid (i.e. goods purchased outside of the U.S.) Exemptions No tax shall be imposed on any good or service: •purchased for resale; •purchased to produce a good or service for resale; or •exported from the United States. . Savings and Investments Income going to savings and investments is not taxable until consumed. Investment income is not taxable until consumed. Personal Consumption Refund To ensure that the basic necessities of life remain tax free, every wage earner receives a refund equal to the sales tax rate times the poverty level (adjusted for the number of dependents claimed). As a result, every wage earner can spend up to the poverty level tax free. Supermajority Required A supermajority vote of 2/3 of both Houses of Congress is necessary to raise the sales tax rate or to create any exemptions to the sales tax. Burden of Proof The burden of proof lies with the government in any dispute with a taxpayer. Seller Compensation Any business required to collect and remit the sales tax may keep 0.5 percent of tax receipts to offset compliance costs. State Administration Any state choosing to do so may administer, collect and enforce the sales tax. In order to qualify as an "administering state," a state must conform its sales tax base to the federal base. States may keep 1.0 percent of their collections to offset expenses. Mortgage Interest Home mortgage interest is not "consumption" and therefore is not taxable. Principal Residences Sales tax on mortgage principal is payable in equal installments over the life of a 30-year mortgage. Persons who are homeowners on the date of enactment will be deemed to have paid the sales tax on their home. Used Property Credit In the case of a taxable good being resold as used (i.e. home or car), a credit shall be given to the seller equal to the amount of tax paid by the buyer of the used property. Casual Sales The sales tax does not apply to any "casual or isolated sale" by any person not engaged in an active trade or business, so long as the gross receipts from the sale do not exceed more than $2,000 in any one instance or more than $5,000 in a year (i.e. garage sales or private sales). Liability to Collect In general, the seller of any taxable good or service has the liability to collect the sales tax, unless the buyer has an exemption certification. Conversions Any good purchased for business use and converted to personal use shall be taxable. Any good purchased for personal use and converted to business use shall be subject to a credit. Governments Federal, state and local governments must collect taxes on any sales and pay taxes on any purchases. Non-Profits Dues and donations to non-profits are not taxable. Sales of non-profits and purchases by non-profits are taxable. Financial Services Financial intermediation services are subject to a tax on both explicit and implicit service fees. Credits and Refunds Credit and refund mechanisms are established for overpayments. Penalties Penalties for failure to register or to collect or remit taxes are established. ------------------------------------------------------------------------ Reference the entire H.R. 2001, National Retail Sales Tax Act of 1997. ------------------------------------------------------------------------ Hotline: (800) 767-7577Fax: (703) 368-5843 Citizens for an Alternative Tax System 10600-A Crestwood Drive, Manassas, VA, 20109-3432 ------------------------------------------------------------------------ ----- Aloha, He'Ping, Om, Shalom, Salaam. Em Hotep, Peace Be, Omnia Bona Bonis, All My Relations. Adieu, Adios, Aloha. Amen. 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