A Federal SALES Tax,

OR  VAT (value added tax),

(AND the Proposed “FAIR TAX”)




     The interstate commerce clause of the U.S. Constitution has long been perceived (and recognized) as a complete bar to the taxation of retail sales in the fifty states by the federal government.  The interstate commerce clause allows the taxation (by the federal government) of the first sale at the whole-sale level after interstate transport occurs, but effectively forbids the taxation of general retail sales by the federal government!


      The Constitution, of course, gives the federal government lawful powers to lay and collect taxes in the United States of America, both directly and indirectly.   However those powers ARE VERY CAREFULLY LIMITED IN SCOPE AND POWER so that they do not intrude upon or invade the jurisdiction and powers of the legislatures of the fifty States, or the fundamental, constitutionally enumerated and preserved, rights of the American People.  To wit: all direct taxes are required under Article 1, Section 2, Clause 3 to be apportioned to the state legislatures for payment, and under Article 1, Section 9, Clause 4 are also required to be laid in proportion to the census, notwithstanding (irregardless of) the adoption of the 16th Amendment (see Brushaber v Union Pacific R. Co and Stanton V. Baltic Mining Co.). 


      Under Article 1, Section 8, Clause 1 the federal government is given the authority to tax indirectly, by impost, duty, and excise.    The excise taxing authority includes the power to tax “income” derived from excise taxable activities (see Stanton V. Baltic Mining Co.).


      Under Article 1, Section 8, Clauses 3 and 4, the federal government is given complete authority over all foreign affairs and foreign persons in America.


      Imposts are taxes laid on foreign goods being imported into the United States of America, or on foreign activity conducted within the U.S. (America), and are in accord with these sections of the Constitution.


      Duties” are taxes laid on goods manufactured in the U.S. that are being exported for sale outside the country, in some other part of the world.  The U.S. has basically foregone these types of taxes and has very few “duties” in existence that have been imposed on American articles to be exported outside the country.  We properly do not punish our own manufacturers for selling “overseas”.


    These sections of the Constitution grant all legal powers to the federal government over all foreign affairs, including international foreign agreements with other nations (treaties), and over foreign persons in the United States and their activities.   Article I, Section 10, Clauses 1, 2 and 3 of the Constitution prohibit any and all of the States from enacting any individual agreements with foreign entities or nations, or taxing their imports.   All foreign relations are regulated and legislated under federal law, not State law.


      However, under the U.S. Constitution, each of the governments of the fifty states retains the sovereign power and lawful jurisdiction over its own people, lands, and activities, under their own Constitutions, and each State’s legislature alone enacts law for the People of that State regarding affairs and matters occurring exclusively within that State’s lands and territory. 


      Additionally, Article 1, Section 8, Clause 3 of the Constitution gives the federal government jurisdiction and authority over foreign commerce and over all interstate commerce between the states, but not occurring within a single State, thus establishing the complete jurisdictional authority of the federal government, which is an authority around the states and between the states, but not over the land of the fifty states.  This is why the Supreme Court has rejected the federal government’s attempts to exercise police powers inside the fifty states that could not be reasonably related to interstate commerce, as recently as 1998 in the U.S. v Lopez decision.


      Under the U.S. Constitution, the federal government does not possess the territorial jurisdiction necessary to tax retail sales in the fifty states.  That authority, jurisdiction, and power belong exclusively to the legislatures (governments) of the States themselves.  Under the Interstate Commerce clause of the U.S. Constitution, it has long been plainly recognized by all that the federal government may only tax the first sale at the wholesale level after interstate transport (commerce) has occurred.  


      Of course these federal excise taxes, imposed and laid on interstate commerce, CAN ONLY BE IMPOSED AND LAID ON GOODS THAT HAVE ACTUALLY CROSSED STATE LINES, because that is the definition of both the requirement and the authority to tax “interstate commerce” that is alleged to be applicable.    One should carefully note that these interstate commerce taxes, like the federal gasoline tax, are not separate items to be paid by the consumer, as a sales tax is itemized separately on your receipt, but rather the federal interstate commerce based tax is “built in” to the price of the gas at the pump because that tax is paid not by the consumer, but by the WHOLESALER or RETAILER transporting the product across state lines.  The consumer does not actually “pay” that tax, it is paid by the seller (who usually passes it through to the consumer as part of the cost of the goods), but it is not a separate item on the consumer’s receipt.


      That is because ONLY the State legislatures ALONE may tax the retail sales that occur within a particular State, NOT THE FEDERAL GOVERNMENT.  Sales taxes have long been recognized under the U.S. Constitution and its system of limited powers, under a clearly delineated separation of powers, as being the exclusive prerogative of ONLY the territorial sovereign, i.e. the STATE legislatures and governments, NOT CONGRESS, except where Congress is the territorial sovereign.   The power to lay and impose a Sales tax is the exclusive power of the territorial sovereign, and is not a power legitimately possessed by the federal government in any of the lands of the fifty states.  The only places where a federal sales tax can be constitutionally imposed, is in Washington, D.C., i.e.: the District of Columbia, and the territories and possessions of the federal government, i.e.: Guam, Puerto Rico, U.S. Virgin Islands, etc.   Nowhere else can it be made applicable.


      A federal sales tax cannot be constitutionally imposed in any of the fifty states because the federal government does not possess the territorial jurisdiction necessary to tax retail sales inside the fifty states. 


      Finally, a federal VAT (value added tax) is nothing but a federal sales tax in a thinly veiled disguise, imposed in a tiered” manner on all levels of sales operations, i.e.: wholesale, distribution, and retail.   However, just as outlined above for the federal sales tax, a federal VAT is also UNconstitutional under the separation of limited, territorially based powers, as commanded by the Constitution of the United States of America.


      Therefore, all these idiotic politicians talking about a national sales tax, or a flat tax, to replace or LAY ON TOP OF the federal income tax, only demonstrate that they are unfit for constitutional congressional (or State) office, because they are not aware of or don’t understand the constitutional limitations imposed on the authority of the federal government to tax the property or activities of We the People, OR to tax retail activity occurring inside the territory of the fifty states.


The federal government may, under the authority of the interstate commerce clause, ONLY tax the first sale at the wholesale level after interstate transport.  Under the U.S. Constitution, they may NOT tax retail sales in the fifty states. 


As a proposed federal retail sales tax of 22.5% on all sales activity within the fifty states of the United States,  the proposed “FAIR TAX” (to replace the income, estate, and employment tax withholding and collection laws) IS ALSO PLAINLY AND CLEARY UNCONSTITUTIONAL !





It should be entirely unacceptable to the American People to exchange one (operationally) UNconstitutional system of taxation for another (legislatively) UNconstitutional system, rather than make a return to a truly Constitutional system that is honestly based on a true understanding of the limited  powers of the federal government that are granted to tax indirectly, BUT NEVER DIRECTLY, even after the addition of the 16th Amendment to the Constitution.