Statement to the President's Panel on Tax Reform

Clay R. McCall (Private Citizen)

9685 Cleatwood Dr. NE

Leland, NC. 28451

\(H\) 910-371-9641

\(c\) 910-520-1637

You may contact me if you have any further questions.

I have been researching the history of the writing of the Constitution
of the United States for the past year. I have read the Federalist
Papers, written by James Madison to the people of New York. My
interpretation of these papers, especially of those relating to taxes,
is that the current income tax system that we currently suffer under is
not what the founding fathers of this country ever intended for its
citizens. They understood the need for the government to have money to
operate, but not by taking, by force, from its own citizens. They even
tried to protect its citizens from this possibility by writing
protections into the Constitution itself as can be seen in Article 1,
Section 2, Paragraph 3 regarding Direct taxes. In Article 1, Section 8,
Paragraph 1 regarding Indirect taxes. The 16^th^ Amendment did nothing
to change the meaning or intent of these two taxing clauses. In 1916,
the US Supreme Court stated in Brushaber vs. Union Pacific that income
taxes were to remain in the class of indirect taxes. Today the income
taxes that we citizens suffer under are Direct Taxes based on the value
of the money (property) that we earned in exchange for our labor. This
concept goes entirely against the ideas and intentions set forth in our
Constitution. I had a conversation with a lawyer who explained to me
that he had talked to a Federal judge and was told that no judge would
ever find in favor of a citizen because he would be disbarred for
incompetence for going against established beliefs. The courts believe
that the government needs money to operate, therefore everyone must pay
taxes. The income tax is used today to reward or punish, thereby making
the system a tool for social engineering, to make citizens dependent
upon government for all their needs, rather than encourage citizens to
work or save or make a living for themselves. It requires telling the
government everything about our lives thus violating nearly all of the
first 10 amendments (Bill of Rights) and taking away our rights to Life,
Liberty and the Pursuit of Happiness. Filling out endless forms and
signing under threat of perjury and imprisonment if any information if
left off or incorrectly given is not my idea of Life, Liberty and the
Pursuit of Happiness. Today's tax system is designed to favor those with
money, specifically those special interest groups who benefit from
various tax breaks or loopholes. These special interest groups don't
give a damn about me or anyone else, therefore, I don't benefit from any
tax break or loophole. I rely on computer software to figure out my
taxes each year because I am not a tax code wizard. The software I use
(Turbo Tax) guarantee's 100% accuracy.

The following is my story:

I retired from 28 years of Federal Government service in November of
2001. Twelve of those years were with the US Marines; the remaining 16
years were with civil service. During my tenure, I put money aside in a
private 401(k) for retirement. When I retired, I moved to the
Wilmington, NC area in the hopes of becoming an Actor. I used my
retirement and my 401(k) to supplement my living while I pursued acting
classes and getting into films and TV shows. When I filed my 2002 taxes,
I ended up paying \$12,000 additional taxes for using my 401(k). In
2003, I called the company and asked them to deduct my taxes before
sending me my money. What they did not tell me was that they only took
out 10% unless otherwise directed. At the end of 2003 when I filled out
my tax forms for that year, I owed another \$9,500 in taxes to the
federal government. My conversation, with IRS employees, was anything
but pleasant. Their attitude was that it was the governments' money and
I had to pay it. I disagreed with that perception. I believed that it
was my money. I was brought to tears by these people. Every
correspondence is riddled with threats of fines and imprisonment and
liens and property being taken and so on. I am currently in the process
of doing an Offer in Compromise to settle my debt. This has been an eye
opening experience for me. Since I have heard about the Fair Tax Act
(HR-25/S-25) I have seen a light at the end of a dark tunnel, not only
for me, but for this country. The current tax system is a burden on the
economy of this country and is a yoke around the necks of this country's
citizens. The Fair Tax is the only tax that is fair to everyone, from
the poor to the rich. The rebate that each family gets makes the tax a
progressive tax. Each citizen will have the option to choose what they
want to buy, thus giving them the choice of what to pay taxes on. This
tax will provide the ability of every citizen to go out and make a
living and not be hampered by a nosy and overbearing government. This
tax will also bring in revenues from those underground economies
currently not being taxed such as the porn industry and the illegal drug
industry. It is human nature that the more money you make, the more
money you will spend. With all the illegal aliens in this country
without a Social Security card, they will be adding to the tax revenues
and not be benefiting from the rebates. Tourists will also be adding to
the tax revenues and they too will not be benefiting from the rebates.
The consumption base is much steadier and predictable than the income
base. Corporations will come back to this country to set up factories
because of the elimination of corporate taxes and payroll taxes. The
ills of Social Security reform would be solved with the passage of the
Fair Tax Act. Social Security could go back to being a volunteer program
as it was originally intended. Everyone who spends money in this country
will be contributing to its continued use. If you don't get a Social
Security card, then you don't receive Social Security when you reach
retirement, but you are still paying into it every time you purchase
something.

My name is Clay R. McCall. I am 52 years young and I am single. I live
in North Carolina and I am still working towards becoming an actor. I am
endeavoring to get my real estate license and it pains me to think that
most of what I am going to make over the next few years will be taken
away, by threat of force, by my government. I sometimes wonder if it is
worth the effort.

I would like to thank the panel for taking the time to read this letter.
I hope you will think of the American people and not the special
interest groups that do not want to see the current system go away, when
you make your recommendations to the President. Please give the Fair Tax
serious consideration and it recommendation.