Sec. #7: How to Calculate Each State's Share of the Yearly Federal Budget
Exactly how will the CONSTITUTIONAL SUPPORT TAX (The CST) work? Here are some details.
Under the CST, the US Government will no longer have the power, through Congress or any other segment of the National/Federal Government, to lay and collect Taxes, Imposts or Excises. Currently, these are authorized by Article I, Section 8, Paragraph 1 (I-8-1) of the Constitution, along with Duties (Tariffs).
The Taxes, Impost and Excises components will be repealed from I-8-1. ((The one remaining item in I-8-1, Duties (Tariffs) will be used fully and exclusively to fund the AMERICAN HEROES APPRECIATION FUND (the AHAF), mentioned elsewhere in the CST website)).
The first constitution-type document for the United States was the Articles of Confederation (the A of C). Article 8 of the A of C, outlined how the original 13 States would raise money to pay the expenses of the "Union" Government the 13 formed under the A of C. (They divided the "common expenses" of running the Union government based each State's contribution to the total real estate values of the day across the 13-State "USA").
The "common expenses" of the U S Government in our day (i.e., the yearly Federal Budget) will be divided among the 50 States, Wash D C, and the territories and possessions that have legislative bodies and people subject to the 16th Amendment U S Income Tax. (Wash D C and the territories and possessions will be considered States for CST purposes).
- The division of the yearly Federal Budget will be done using an "income-by-state" formula that will be fair to all states.
- All individuals presently subject to filing one of the IRS 1040 Forms under the current Internal Revenue Code will be required to file a "CST 1040" Form.
- Keep in mind that the CST 1040s will only be used to compute a formula to divide the yearly National/Federal Budget among the States. There is no "Taxable Income" line on the CST 1040. No dollar amount of tax payable to the U S Government will ever be calculated to be paid to the U S Government.
- Essentially, the CST 1040 will have all of the same income lines as does the present 1040. The CST 1040 will end, however, at the Total Income line.
- Each individual taxpayer (or husband/wife combo) will file two copies of the CST 1040, one with the IRS, the second with the designated tax agency in the state of residence.
- On a state-by-state basis, the IRS will add the Total Income amounts for all the taxpayers residing in each State. The designated tax agencies in the 50+ States will do likewise for their residents of their State.
- The IRS and designated state tax agencies will compare their state-by-state Total Incomes and reconcile any differences.
- A Grand Total National Income will then be calculated by simply adding the 56 or 57 State income totals.
- The percentage that each State contributes to the Grand Total will then be computed.
- Each State's percentage will be applied to the yearly National/Federal Budget to determine its ratable share.
- This process will result in each dollar of income across the USA being assigned the same number of pennies of the yearly National/Federal Budget, regardless of where the party earning it resides. Further, each State's ratable share will be in proportion to its overall financial strength relative to the other States.
- For example, after a recent U S Census estimate of population, perhaps six years ago, the State of Mississippi had one-fifth the population of New York State. IRS income statistics for the same year showed that Mississippi had one-sixth the income of New York. Under the CST, Mississippi's ratable share of the U S Budget for that year would have been one-sixth of New York's. The same ratable share measure would apply between/among all States.
- At that point, the senior state legislative body in each State will be responsible to develop a tax structure on its citizens/residents to raise the money to pay its State's ratable share.