Consumption Tax on Sweet Beverages

This morning on the Washington Journal on C-Span, Susan Neely of the American Beverage Association (I think) was on to talk about an article she wrote about the Obama Administration's consideration of a consumption tax on sweet beverages (soda pop - and other).  Because of my prior research on the issue of tax systems and income revenues, I wrote a letter to the American Beverage Association.  The following is my letter:


Dear Sirs,

I watched Susan Neely on C-Span talking about the Administration's consideration of a consumption tax on sweet beverages. Since your industry is under attack, you are in position to expose the end game of the tax if you understand what's being done and you should be able to recruit allies to help you in this fight.

The consumption tax on sweet beverages is simply an incremental step toward the conversion of the U.S. tax system to a 'Goods and Services' tax on all purchases to harmonize our tax system with Canada's tax system. The energy
tax that is in the 'carbon cap and trade' legislation is another step in the incremental approach.

In 2005, Congress held a hearing to discuss the 'Fair Tax Act of 2005' (H.R. 25) proposed by Representative John Linder (R-GA). I spent a lot of time on that hearing and wrote a report of what I heard. I recorded it for my own purposes but when the hearing was pulled down from the Committee website, I posted my recordings of the hearing such as they were.

Fair Warning on the Fair Tax

At the time I wrote the above report, I didn't know about Canada's Goods and Services Tax and I also didn't know about the G8 - Global Information Society initiative. But recently when the debate began on health insurance
"reform", I knew what the Blue Dog strategy was really about:

Harmonizing the Tax System

It would take pages to explain all of this to you so I'm not even going to try in this email. What I will tell you is that we are losing the sovereignty of this nation by a slow-moving administrative coup d'etat and the change is the tax system is a part of it.

In 2004, the House Budget Committee held a hearing on the U.S. Tax Code's Impact on Revenue Projections and the Federal Budget. In this hearing, Representative John Spratt (D-SC) said that as of the end of fiscal year 2003, income tax revenues were at their lowest point since 1950. Representative John Linder (R-GA) said there has been 8 quarters in a row of declining revenues since 2001. "There is six trillion dollars offshore". Obvious to all of the unemployed American citizens and bankrupt retailers, when you export manufacturing (jobs) and white collar technology industries
(jobs), you are exporting personal income of the American people AND you are exporting the tax base with them.

Bush Tax Cuts Are Working!?

With globalization defined as the building of the global fiber optic telecommunications network with Internet capability, the Congress was sold the illusion of an entrepreneurial economy in which everybody would make their living in some way on the Internet - and when the above hearings were held, the impression given was that Congress was told that the lost income tax revenues were because all of the entrepreneurs just weren't filing their income tax on their Internet derived income. The truth is that the vast majority of jobs that would have been available over the Internet were exported to India where people could be hired for a tenth of what they could be hired here.

So getting back to the consumption tax, the idea is to replace federal income revenue with a consumption tax on all Goods and Services (GST) - to be collected at the point of sale by the provider of the service or the retailer. As was revealed in the 2005 Fair Tax hearing, for a full dollar for dollar replacement of the income tax revenue, it would require a tax of roughly 50 cents on the dollar.

Even though at this time, your industry is being targeted for the GST tax, with the full understanding of what's behind this initiative, you should be able to recruit other industries to help put a stop to deceptive, stealth move to issue to coup de grace on the American economy and the American people.

If you need more information on any of this, I would be happy to provide it to you.

Vicky Davis,
September 12, 2009