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          RAMBO GRANNY






The hyperlinks that are in RED  won't work because we don't have those pages set up yet.. 

The links that are in BLUE lead to pages that are more complete, although the material there is being constantly revised and added to.. 

This is a hell of a lot of work, I'll kid you not.

  If you have any comments, questions, or suggestions, please e-mail us via the  link in the Contact box.  We'd really like to hear from you.

FAIR NOTICE:  Until we get our chat rooms, letters and essay sites going, we will be posting, in no particular order, articles and stories from various sources on solutions to the problems of taxation.  In the meanwhile you can e-mail your thoughts to us and, God willing and the creek don't rise, we will do our best to post them in connection with the article you want to comment on.


Election year 2006 is well under way and we are again hearing the same old bullshit the politicians have been piling on us for decades. In this column you will read the hows, whys and wherefors of the game the politicians of both major parties have been playing, saying one thing in their campaign speeches and doing another just as soon as the election is over.  In the area of taxation this scam is particularly acute as no one wants to pay taxes even under the best of conditions, but to be Rooked, Raped, Robbed, and Ridiculed by these Rascals is just too much to endure.


But facts are facts, and as you will see, the data is there.  And the bottom line is that despite all the talk and promises, taxes have gotten higher and higher for people who work for a living and gotten lower and lower for those who live off their speculations and accumulated wealth invested in tax free, and guaranteed against inflation, government bonds.  And both the Democrat and Republican parties have been  playing this game for decades--just about the only thing these rascals have cooperated on, and for the same reason: payola.  They reduce the taxes on the rich and then borrow money from the rich to run the government--and pass the burden onto the working people. 


How do they get away with this highway robbery?  Because they only need our votes every two, four, or six years, and get them by enormously expensive media campaigns, paid for by their wealthy constituents who directly and through their lawyers and lobbyists ply them with privileges and perks every day in the year, come rain, come shine. 






But why is Tax Reform so high on our list of priorities? 

Well, we have listed some twelve problems of national, even global, urgency -- and there are a lot more -- and there is hardly one of them that can be solved without the expenditure of massive sums of money by our national government.  Which is why they never get solved: people are fed up with taxes, so the politicians turn to borrowing. And the game goes on.

How long, oh Lord, how long must we endure this annual pillaging of our labors?  How long must this wasteful, unfair, and incredibly flawed income tax system be laid upon our backs?

Not much longer, if we all get together, capture  the attention of our politicians, and support the following program.



This is the simplest, least burdensome, and most productive tax reform proposal you've ever heard of.  (See, proposed by University of Wisconsin economist Edgar L. Feige.)  When fully in place, the APTTax will completely replace the Federal income tax. 

I call this a three-fer solution because while the APTTax is introduced in stages, starting with the stock markets where the collection mechanism is already in place, the surpluses generated will be lock-boxed and applied to paying back the $3.7 trillion the politicians looted from our Security Fund.  That done, the income from the APTTax will be applied to reducing the National Debt, which is now over $8 trillion.  Which will free more revenues for useful purposes as the cost of "servicing" this debt, i.e., paying interest, is reduced. 

This teeny weeny little tax of, say, .25% (one penny for ever four dollars) will be collected automatically by computer from every financial transaction of every nature whatsoever.  

Like little drops of rain -- pennies from heaven -- this stream of revenue will turn into a mighty river that will make all other forms of taxation unnecessary.  What you earn at the end of the day will be what you take home.  It will be yours to spend or save, invest or gamble, as you like.  It's your money.  You worked for it.  End of story. 

If the politicians can't do their job on that stream of revenue, then they are brain dead; to hell with them.  They can get out of politics and work for a living -- for a change.  We'll find better men and women to represent us.

This is not a tax on people or corporations, which the Democrats like because, so they used to think, it allows them so soak the rich.  Which didn't happen because the rich fought back and seized power by buying the politicians.  Nor is it a tax on consumer goods, which the Republicans like., because it exempts from taxation all the money games they like to play: stock market and over- the-counter trades,  casino and internet gambling, arbitraging, money laundering, commodities speculations, money lending -- you name it -- none of which is taxed today even though they are sales transactions in every sense of the term. 

Rather the APTTax is a tax upon the flow of money as it circulates through the economy.  Just like giving blood for the blood bank, only in much smaller drops.

Oh, the big money boys will cry their eyes out making believe they will be hurt.  But that ain't so because the percentage taken by the APTTax in any given instance is far too small, just a fraction of a stock broker's commission for example. 

But just the same,  the lobbyists and the lawyers, the tax accountants and the "think tank" propagandists will complain and produce an endless litany of learned "studies" and "reasons" why it can't work. 

Don't believe a word of it.  They have vested interests in your money; the present system made them rich; they love it like a baby loves his mother.  And don't feel sorry for them because they will be out of business; they are smart people and will find other ways to make money or retire on their wealth.  I never heard of a poor lobbyist yet.  Have you?

The APTTax doesn't tax people or corporations, and it doesn't exempt the rich and powerful from taxation either -- if they don't want to spend or invest or gamble their money, they can keep every nickel.  But of course that isn't going to happen because what's the point in being rich if you can't spend it? 

The APTTax just takes a small percentage out of every financial transaction whatsoever, the same for everyone -- perfect equality.  And it does it all by computer, just like the SEC for the past half century has financed its stock market oversight activities.

When the economists get through with their calculations, the exact percentage will depend upon (a) the government's need for money and (b) the effect of the tax on the economy.  But, for starters, .25% on each side of a transaction will work out fine and will pay off a lot of debt.  Save Social Security even. 

In the last analysis, the government's need for money is your responsibility.  You gotta stop electing irresponsible big spenders and you gotta keep a sharp eye on them no matter who you elect.  Remember our motto: In God We Trust.   All others cash.


The second limit on the amount of the APTTax is practicality.  Because if the tax is too high, particular economic activities may become prohibitively expensive -- which is fine for such bad practices international currency arbitraging, but otherwise can be counter-productive if it discourages legitimate economic activity. 


So the upper limits of this tax --unlike the income tax -- don't depend upon the folly of  politicians.  If the tax is too high, the market will give the answer: the activity will simply stop.  So the message to the politicians is: You don't want to kill the cow -- gotta keep old Bossie happy if you want her to keep giving milk. 

As matters now stand with our feckless representatives, any real tax reform will be resisted by the financial elites and powerful business interests who are quite content with the present system.  Sure, it costs them lots of money to pay off all those lobbyists and congressmen, and to maintain the propaganda mills which they call "think tanks."  But it pays off!

It took them many years to set up the present income tax system, and to fend off the few elected representatives who protested their depredations, such as Democrat Representative Henry Gonzales of Texas, and, somewhat belatedly, Democrat Senator Daniel Moynihan of New York.  Democrat Representative Dan Rostenkowski of Illinois gave the big money boys trouble for awhile, but he ended up in jail.  Which makes you wonder if it pays to tangle with the financial elites, the real power behind the D.C. throne. 

Do any of you remember the "good old days" when the politicians from President on down  increased the Social Security tax even as they were cutting the taxes on the rich and famous?  Which created the huge surpluses that used to be in the Social Security Fund.  Which the same sticky-fingered politicians spent and replaced with government IOUs.  Which George Bush now wants to get rid of altogether by "reforming" Social Security, by knocking it in the head. 

Do you remember the Savings and Loan debacle which ended up making a mint for the commercial banks and the money lenders at large?  The same people who have now squeezed every bit of equity out of the American Dream -- our own little home, the hedge against old age?  Which our local tax collectors are again squeezing for whatever juice remains.  Or the good old days under Jimmy Carter when the lid went off of interest rates and we had double digit inflation?  The cost of living went sky high even if wages didn't.

But you probably don't remember when there generally was a 10% cap on interest rates -- usury, you know.  Frowned upon by good Christians, at least in the Middle Ages.  You know, maybe Jesus had it right when he drove the money lenders out of the Temple.  But of course, it got him killed in the end. 

Whatever, remember this:  If you want to get rid of the Income Tax, you have to keep each and every politician in your eye because they are a pack of double-dealing, double-talking scallywags, owned body and soul by the big money boys who really run this country.

                                                 Lew Warden

Here's a letter Marie sent to the President Bush's Panel on Tax Reform.  It clearly explains the essence of the APTTax, how it can be established quickly to produce income right now, and how that income can be applied to get us out of hock to the Money Merchants.  Of course, the Panel ignored it, and other similar submissions -- hey, they know who butters their bread -- and produced precisely nothing in the way of real tax reform.  Which we all know means getting rid of the Income Tax and the absurdly cobbled Federal Tax Code.

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New Horizons in Politics

Santa Maria, CA 93458

April 27, 2005

To: The President's Panel on Tax Reform.

You have invited e-mail comment on tax reform proposals.  And the simpler the better, I must presume.  So here's the simplest, most efficient, most productive idea I've heard of to date:

You want money, tax money.  You tax people, you get blood.

All tax reform must come in increments.  Major changes in policy produce too much resistance and nothing of importance ever happens.  Take baby steps for real reform.

For example, impose a one half of one percent tax on all stock market trades, a quarter of a percent tax on each side.  The mechanism is already in place; it is how the SEC derives the revenue to sustain its operations.

The brokers will cry a bit but that will soon pass as the bite is too small to deter anyone except possibly day traders.  See how the system works for one two-year congressional term.  Then extend the tax incrementally into the financial sector of the economy, collecting the tax automatically by computer.  Study it while considering further extensions into all financial transactions and abolition of the Income Tax, lock, stock and barrel.

And as you go put the proceeds in a lockbox the politicians can't invade, and liquidate the Treasury bonds held by the Social Security fund.  That done, start retiring the national debt.  Each such step will generate more spendable revenue by reducing debt outlays.

Otherwise, the country is going broke, in which case you're going to have a terrible time trying to wring more money out of the people.

Tax money, not people.

                    Marie Pangloss.

Liberal with the People's Liberties.

Conservative with the People's Property.


Here's another element of the Income Tax you probably haven't thought about for awhile, although you see it with every paycheck: The Withholding Tax.  Remember Ronald Reagan, who got elected Governor of California by promising to never sign a withholding tax bill?  His feet were "set in cement?"  Some unkind folks said the cement was all in his head.


Whatever, the Withholding Tax is another one of

those evils we just get used to and come to regard as necessary.  Some even bless the government for helping them "save" a little money. In reality the government is simply taking our money in advance, before it is due, and not even paying us interest. 


Oh, you thought, like I did, that the Constitution forbade the taking of private property for public use without paying "just compensation."  Well, just goes to show you how little we know. For example, our "conservative" US Supreme Court recently, in Kelo v. New London, 348 U.S. 26, "explained" how a city could condemn private properties -- long established homes in an attractive residential neighborhood -- so that Pfizer, the giant pharmaceutical firm, could build an industrial park for its laboratory and make money out of the rest of the 90 acres from anticipated commercial tenants -- a private enterprise from start to finish.  All the City had to do was "carefully consider" Pfizer's "carefully considered" plan and conclude that the City (or its officials??) might receive greater benefits than presently were being derived from the current property owners.  (I'll bet they "carefully" considered that one!)


So there, now you understand Constitutional law: the Constitution means what five out of nine Justices say it means, even if they can't agree just why.


So let's cut to the chase.  We propose to deprive the power brokers of their most effective weapon in their  incessant raids against our freedom and our money, viz., the gaining of special tax benefits.  Under the APTTax, even payments of payola to politicians becomes a taxable event which must be disclosed to the tax officials and can thereby be made known to the general public.  Total transparency. 


Whatever, back to the Withholding Tax, the principal weapon by which the Income Tax has been forced upon the backs of those of our citizens who work for their livelihood.   Under the APTTax the detested Withholding Tax just disappears, like the Cheshire Cat's smile, to the utter relief of all business men, large or small, and their employees. 


The Curse of the Withholding Tax

by Laurence Vance

Did you have to write out a check to the IRS for $5,581 this past April 15? If you had to do such a thing next year, would you think of it as your civic duty or would you consider it a crime that only the government could get away with?

A Typical Taxpayer

This figure of $5,581 is not an arbitrary one. According to the U.S. Census Bureau, real median household income was $43,318 for 2002 and 2003. A taxpayer with an income of that amount who was single with no children would, after his standard deduction of $4,850 and his personal exemption of $3,100, owe $5,581 in federal income tax for tax year 2004. If this same taxpayer was married and his spouse did not work, he would be entitled to an extra personal exemption, thus lowering his tax liability to $3,399—still a huge sum for most Americans to come up with.

If this same couple were to have a child, they would gain not only another personal exemption, but also a $1,000 child tax credit. However, their tax liability would still be $1,934—an amount that the typical American does not have in his checking account. The addition of another child would lower this couple's tax liability down to $469.

The Withholding Tax

But regardless of the amount of federal income tax that one ultimately pays, the fact that the U.S. government seizes the wealth of its citizens slowly over the course of the year via the withholding tax means that the typical taxpayer is comfortable in each of the above scenarios because he doesn't actually have to write out a check to the government on April 15 of each year.

The withholding tax makes it possible for the government to silently steal the wealth from its citizens with little or no outrage about the loss. And even in the case where the citizen receives a refund of all the taxes he has paid in, the withholding tax still serves two evil purposes. First, getting a refund of all the taxes one pays in amounts to an interest-free loan to the government. The government gets money to continue its spending orgy, and the citizen loses the ability to receive a return on money that could be invested. And second, getting a tax refund fosters the notion that the government is benevolent. Never mind that the money is yours. If the government sends you a check in the mail then the government can't be all that bad.

If the $5,581 were gradually taken out of one's paycheck over the course of the year and no money was owed on April 15, the pain of the theft would be greatly diminished, but for two entirely different reasons. Obviously, it is less painful to have $107.33 taken out of one's check every week for fifty-two weeks than writing a check to the government for that amount every week or a check for the whole amount once a year. The second reason the pain of the $5,581 loss would not readily be felt is that very few people pay any attention to the amount of taxes that are withheld from their pay. They are concerned only with their take-home pay. This is unfortunate because if the people who pay taxes actually realized how much the government was taking from them they would be outraged.

The Origin of Tax Withholding

So where did the withholding tax come from? It was not part of the original income tax that resulted from the sixteenth amendment in 1913. Very few people paid any taxes back then anyway. The income tax did not directly affect the average American until World War II.

On the eve of the war, few Americans paid income taxes. Those that owed taxes paid them in one lump sum on March 15 (later changed to April 15). To pay for the war, the Revenue Act of 1942 lowered exemptions and raised income tax rates. But it also did something even more insidious—it instituted a 5 percent "Victory Tax" on all wages above an exemption of $624. The tax was to be collected by the employer and deducted from the employee's paycheck—just like the Social Security tax that began in 1935.

The Current Tax Payment Act of 1943 then revolutionized the income tax by making withholding taxes universal. The withholding tax was part of the new tax plan offered by Beardsley Ruml (1894–1960), the chairman of the New York Federal Reserve Bank and treasurer of R.H. Macy and Co. By 1945, about three-fourths of Americans were paying federal income taxes. And although the withholding tax was sold as a wartime emergency, like most expansions of government instituted during wartime, it has been a way of life for most Americans ever since.

The Curse of the Withholding Tax

The income tax allows the government to confiscate the wealth of its citizens. The curse of the withholding tax is that it allows the government to commit this crime systematically, effortlessly, painlessly, and benevolently.

Surprisingly, it was a free market economist who helped the federal government implement the withholding tax in the first place. As was pointed out by the Austrian economist, Murray Rothbard (1926–1995), in his 1971 article "Milton Friedman unraveled":

One of Friedman's most disastrous deeds was the important role he proudly played, during World War II in the Treasury Department, in foisting upon the suffering American public the system of the withholding tax. Before World War II, when income tax rates were far lower than now, there was no withholding system; everyone paid his annual bill in one lump sum, on March 15. It is obvious that under this system, the Internal Revenue Service could never hope to extract the entire annual sum, at current confiscatory rates, from the mass of the working population. The whole ghastly system would have happily broken down long before this. Only the Friedmanite withholding tax has permitted the government to use every employer as an unpaid tax collector, extracting the tax quietly and silently from each paycheck. In many ways, we have Milton Friedman to thank for the present monster Leviathan State in America.


Ideally, the elimination of the withholding tax would force the American people to see exactly how much of their income is being confiscated by the government to fund its trillion-dollar budgets. This would, of course, have to be followed by sufficient outrage on behalf of the American people to reduce those budgets. The elimination of the withholding tax is also sometimes seen as freeing businesses from being tax collectors. But this would only be true if businesses also ceased to collect Social Security tax for the government.

But on a more practical note, there are two reasons why even if the withholding tax were eliminated it might not result in sufficient enough outrage at the level of government wealth confiscation and spending. First, the majority of the population presently pays little or no income tax. It is of no consequence to them if the "rich" have money withheld from their paychecks or not. And second, many out of this majority are not only not taxpayers, they are taxeaters who benefit from the redistribution of the wealth of those who actually pay taxes. The continued expansion by the Republicans in Congress of refundable tax credits like the Earned Income Tax Credit and the Additional Child Tax Credit will ensure that the number of taxeaters will increase.

There is also one significant practical consideration that cannot be ignored. The chance that Congress would ever eliminate that which provides the government with a continual flow of revenue is zero. There is, therefore, nothing short of dramatically rolling back income tax rates (good) or eliminating the income tax altogether (better) that will even begin to tame the federal leviathan.


Laurence M. Vance is a freelance writer and an adjunct instructor in accounting and economics at Pensacola Junior College in Pensacola, FL.   See his archive.

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