What we really need is Free Trade between the States!

     Many claim that jobs were being transferred overseas because American consumers refuse to pay higher prices for American made goods. The statement is only superficially correct.

      Article I, Section 10 of our Federal Constitution prohibits the state governments, without the consent of the Federal Congress, from collecting Tariffs on goods imported into the states. Likewise, Article I, Section 9 prohibited the Federal Congress from assessing tariffs or taxes on goods exported from any state. Section 8 empowered the Federal Congress to regulate trade between the states as well as with foreign nations, but it was intended as a “negative” power, to prevent “the states” from interfering with interstate trade. Revenues for the Federal government were to be collected from excise taxes and tariffs (excise taxes on imported goods). There was no income tax at that time. As Article I, Section 8 didn’t delegate to the Federal Congress the authority to regulate such activities or areas such as labor, the environment, workplace safety, etc., the 10^th Amendment clarified that such areas were prohibited to the Federal Government and were within the powers of the state governments. Competition between the states was to provide the motivation for intelligent and effective protections while not being so arbitrary, capricious, or foolish as to damage a state’s (or the nation’s) economy.

      Federal Tariffs on goods imported from foreign nations were intended as a source of revenue to the Federal Government. As such, there was no tendency of the Tariffs to stifle domestic production or commerce. The Tariff rates were to be set in moderation, as setting the rates too high (“protectionism”) would lessen revenues as surely as setting the rates too low. Domestic taxes (which at the time were solely “excise” taxes) were looked on as invasive and to be avoided when possible. The “Whiskey Rebellion” demonstrated the dislike of domestic taxes by the people of that era, and Thomas Jefferson properly boasted that, under his administration, the expenses of the Federal Government were paid entirely through Tariffs paid by “the wealthy” buying “imported foreign luxuries”, and that the domestic laborer or craftsman never saw the taxman.

      Now, instead of very little domestic taxation, and minimal imposed regulatory cost, a huge tax and regulatory burden has been imposed on domestic production thanks to the income tax and the usurpation of state regulatory functions by the Federal Government. Foreign producers do not have to pay the US income tax, and the Free Traders have reduced or eliminated tariffs, so foreign producers do not share the tax burden imposed on the US producers.

                To further worsen the situation, US producers are actually being encouraged to go offshore by such taxpayer funded government agencies as the Overseas Private Investment Corporation (OPIC), the US Trade and Development Agency, and the Export/Import Bank through direct loans, loan guarantees, and investment insurance. The Free Traders and Globalists in Washington DC are using our tax dollars to send our jobs overseas. Has anybody figured out which section of the US Constitution authorizes this insanity?

      Trade agreements such as NAFTA and GATT stack the cards against domestic production. It is up to Congress to halt the export of our jobs and livelihoods before they destroy the middle class. It is time to withdraw from both NAFTA and GATT. Returning the federal government to its Constitutional bounds would lessen the burden on our domestic industries, and end the corporate welfare for companies moving overseas. Nashville can protect Tennessee’s people far better than can Washington, DC. Every last dollar possible should be collected through Madison’s Tariffs on “imported luxuries” before one penny is collected via Karl Marx’s Graduated Income Tax on American producers.

      Or, maybe someday we’ll all consider ourselves lucky to be working passing out shopping carts here in Chattanooga rather than swimming south across the Rio Grande to find a job down there.

Tariffs are the least intrusive means of revenue for the Federal Government. The Graduated Income Tax is the most destructive means of revenue.

The Administration continues to negotiate “Free Trade Agreements” such as CAFTA with various countries and send them for Congressional approval in preparation for negotiating and then implementing the “Free Trade Area of the Americas” (The FTAA). The “FTAA” is the expanded version of NAFTA, and will serve to strip away our manufacturing, our national sovereignty, wipe out the middle class, and all but eliminate our borders. But before looking at these other issues, let’s look at the narrower issue of dropping or eliminating tariffs and the resulting economic effects.

When President Thomas Jefferson left office in 1809, all domestic federal taxes paid by American citizens had been abolished and the federal government ran entirely on tariffs (a tax on imported goods) and the sale of federal land. Jefferson proudly proclaimed during his second inaugural address:

The suppression of unnecessary offices ... enabled us to discontinue our internal taxes  [excise taxes on such items as beer, whiskey, & other items of “voluntary” consumption].... The remaining revenue on the consumption of foreign articles is paid chiefly by those who can afford to add foreign luxuries to domestic comforts, being collected on our seaboard and frontiers only, and, incorporated with the transactions of our mercantile citizens, it may be the pleasure and pride of an American to ask, "What farmer, what mechanic, what laborer ever sees a tax gatherer of the United States?"

Jefferson regarded internal taxes -- including even excise taxes -- as radical measures only to be initiated in times of war.

            Contrary to the claims of those pushing the modern “dumbed down” free trade, tariffs do not necessarily advance protectionism or construct economic isolationism. Revenue-based tariffs require brisk international trade, as Alexander Hamilton explained in Federalist #21: "It is a signal advantage of taxes on articles of consumption that they contain in their own nature a security against excess. They prescribe their own limit, which cannot be exceeded without defeating the end proposed -- that is, an extension of the revenue .... If duties are too high, they lessen the consumption; the collection is eluded; and the product to the treasury is not so great as when they are confined within proper and moderate bounds."

Among the Founding Fathers of our nation, no one contested the fact that the tariff was the least dangerous form of taxation available to the new republic. One of the first items of business during the first session of the U.S. Congress in 1789 was passage of a tariff bill to pay off the national debt. James Madison, often called the father of our Constitution, remarked: "The deficiency in our treasury has been too notorious to make it necessary for me to animadvert upon that subject. Let us content ourselves with endeavoring to remedy that evil. To do this a national revenue must be obtained; but the system must be such a one, that, while it secures the object of revenue, it shall not be oppressive to our constituents. Happy it is for us that such a system is within our power; for I apprehend that both these objects may be obtained from an impost on articles imported into the United States."

Indeed, tariffs were to be used as a protectionist measure only within a very narrow set of circumstances. James Madison, in the course of noting America's difficulties in obtaining military supplies from abroad during the War for Independence, remarked in House debate on America's first tariff bill that "each nation should have within itself the means of its defense, independent of foreign supplies: that in whatever relates to the operations of war, no State ought to depend upon a precarious supply from any part of the world."

President Abraham Lincoln noted, "The tariff is the cheaper system, because the duties, being collected in large parcels at a few commercial points, will require comparatively few officers in their collection; while by the direct-tax system, the land must be literally covered with assessors and collectors, going forth like swarms of Egyptian locusts, devouring every blade of grass and other green thing."

             Interestingly, Webster's Ninth Collegiate Dictionary defines free trade as "trade based on the unrestricted international exchange of goods with tariffs used 'only as a source of revenue." Most Americans recognized that tariffs involve the least direct government interference in the daily lives of citizens. While sales and corporate income taxes force open the books of American businesses to government bureaucrats, and income taxes expose individuals to the heavy hand of government, the few customs agents needed to collect tariff duties are placed mainly at ports and airports. No army of regulators is sent into the cities and towns of America, and citizens are not required to sign tax returns which effectively render them guilty until proven innocent.

Our Congressmen & Senators, in the name of “Free Trade”, have replaced and are replacing tariffs, the preferred means of revenue collection of Jefferson & Madison, with an ever increasing burden from our “progressive” income tax, the preferred means of revenue collection of Karl Marx. The claim by Jack Kemp and Rush Limbaugh, some time back, that reducing or eliminating tariffs would be a “tax cut” shows either their ignorance or their deceitfulness. Cutting tariffs has only shifted the tax burden from importers onto domestic producers and individuals. There is no true “tax cut” unless spending is also cut. Cutting or eliminating tariffs under these trade agreements has only shifted the revenue collection from the minimally disruptive tariff to the extremely disruptive and destructive domestic income tax. The combination of no tariffs and ever increasing domestic taxation and regulation will continue to drive our industries overseas and further stagnate the economy.

It’s time to let our Congressmen and Senators know that we don’t want any more dumbed-down “Free Trade” which replaces the preferred means of revenue espoused by Jefferson and Madison and replaces it with the means of revenue advocated by Karl Marx.

Those interested in finding out more about the “Free Trade Area of the Americas”, the threat that it poses to all of us, and what can be done to stop it, are urged to visit http://www.stoptheftaa.com.

 Shame on Frist & Alexander! Shame on Zach Wamp!

Note: Congress passed CAFTA. Now is the time to ramp up the fight against the FTAA (Free Trade Area of the Americas)

CAFTA - The Central American Free Trade Agreement

This month and the next, Congress will be debating and possibly voting on The Central American Free Trade Agreement (“CAFTA”). This “Free Trade” agreement would essentially add 6 Central American countries to those of NAFTA.
 First, our Congressmen and Senators should remember that tariffs were the preferred means of revenue for such presidents as Washington, Adams, Jefferson, and Madison. When tariffs are eliminated, they are replaced by the graduated income tax; the tax preferred by Karl Marx. Under such a practice, foreign producers exporting to the United States contribute nothing to the operation of our federal government. The results is that the need to suck more of the lifeblood from the remaining American producers then continues to grow.
 Also, there is nothing “fair” about this “free trade” bill. For example, our markets will be opened immediately (ie – no tariffs or quotas) to Central American agricultural products. However, their markets will remain closed (tariffs & quotas) to US agricultural products for years and even decades.
 It is claimed that our exports to these countries will be increased. In is true, in part. The US will ship more fabric to these countries, where the fabric will be cut and sewn into clothing, and shipped back to the US. However, in the past, the clothing was cut and sewn in the US. So, the promise of increased exports is about as credible as Snake Oil Medicine.
 It should also be remembered that these 6 countries have incredibly small economies. The six together have smaller economies than do many US cities. The fact is, they don’t have enough wealth to buy American goods. However, they do have the ability to take our jobs.
 It has been claimed that CAFTA is necessary for the US to be competitive with China. Such a statement is ludicrous. The proper response to China is to remember that tariffs are the least costly and least disruptive means of revenue for the federal government. There is no reason that either Chinese or Central American manufacturers should pay no revenue to the Federal Government while American manufacturers and farmers are forced to pay and pay and pay and pay and pay. Also, our Constitution does authorize Congress to regulate foreign trade. This includes trade with China! In other words, Congress should address the resolve the trade issue with China, rather than further cripple America’s manufacturing and agricultural base.
 Both the World Trade Organization (WTO) and NAFTA have bureaucracies and “Courts” which now “rule” on the acceptability of US trade policies and even federal and state laws. For example, the WTO just ruled against Utah’s laws against internet gambling. CAFTA would extend this. CAFTA is also the forerunner to the Free Trade Area of the Americas, which would finish the decimation of our remaining industrial and agricultural base.
 Plainly, CAFTA must be defeated. Our Congressman and Senators need to be encouraged to defeat this continuing erosion of our manufacturing base and standard of living.