A national retail sales tax? GREAT IDEA!

The most popular of the various national retail sales tax plans is called the FairTax. It is in both houses of Congress today as HB 25 and SB 1493. It is a replacement, not an add-on, for the federal income tax and for federal payroll taxes collected to fund Social Security and Medicare.

The FairTax provides a dollar-for-dollar replacement of all revenues now collected through such taxes and eliminates the need for annual and quarterly income tax filings, the surveillance by the federal government of wages and investment income and the need for anyone to hire an expert in order to comply with federal tax laws.

The FairTax is a progressive tax. The biggest-spending wealthy will pay an effective tax of $23 for every $77 they spend on new products and services. The poorest get money back. American families would receive a monthly refund equaling the amount of sales tax a poverty-level family would normally pay.

As such, the FairTax eliminates federal taxes on the poor, including highly regressive Social Security taxes. This automatic refund won't mean much to the wealthy but will be quite significant to low- and moderate-income families and to those on fixed incomes. Everyone receives the refund, including the wealthy, in order to eliminate both means testing for the poorest Americans and the need to track earnings for everyone.

The FairTax has no exemptions, no shelters and no complex tax dodges available primarily to the wealthy and special-interest groups. The only thing every taxpayer can know about the current tax code is that it is an 8-million-word mess that no one has ever read. But even a child can understand the 13 words that define the FairTax: "The FairTax is applied to all new goods and services delivered at retail."

The FairTax captures billions of dollars of revenues currently lost in the underground economy. Even drug dealers would pay their share of taxes when they purchase goods and services. The simple fact is, the more money one spends under the FairTax, the more consumption taxes one pays. Those who buy luxury items pay more; those who live more modestly pay less.

The FairTax also eliminates the IRS' unwelcome surveillance of every penny of income earned, loaned, won or invested by American citizens. In place of the huge bureaucracy created to collect federal taxes, the FairTax uses the states' sales tax infrastructure to collect taxes at the point of retail sale.

The intrusive interest from our government into citizens' financial status is eliminated overnight.

We can achieve the dream of upward economic mobility for all if we first believe our goal is attainable. The FairTax — truly an issue that delivers on the promise of individual liberty — will survive the distortions of presidential politics, and with a demanding public, the FairTax will achieve the congressional passage and a signature from the White House. It all starts with telling the public the truth and believing we can change things. I believe.

• Herman Cain also has served as chairman of the Federal Reserve Bank of Kansas City and as CEO of Godfather's Pizza. He recently ran for the U.S. Senate from Georgia.

"Taking your logic to its conclusion, there is no way that a company could ever do a budget"

"Take a look at a corporate income statement sometime,
corporate income tax obligations are NEVER included as part of 'cost of goods sold'."

As someone who has been involved in the generation of many corporate income statements, I am more than familiar with GAAP formatting.

However, the format of the income statement has absolutely nothing to do with your main point, which is that income taxes cannot be predicted. To the extent that sales and expenses can be predicted, so can taxes. I know that to be a fact, since I have been personally responsible for generating many budgets.

Had I ever left out income taxes from my budgets using your wacky logic that they cannot be predicted, I would have been uncerimonously sent back to the drawing board.

BTW, there are many legitimate costs, such as sales & marketing, research & development, and general & administrative that are separate and distinct from COGS, also. Are you going to say that those expenses cannot be predicted, either? Or is it just taxes?

If we didn't have payroll withholding taxes and people had to make out a yearly or quarterly check, there would be a tax revolt, but since half the population doesn't pay any tax and gets a "rebate", they don't care.

Yep. And our elected bureaucrats feed off the apathy. Better our money in their pockets than our own.

So wouldn't FCA establish a "singles penalty" and shouldn't the same people who oppose the marriage penalty also oppose this penalty? (FWIW, I oppose both the marriage penalty and singles penalty.)

That is pure foolishness, Why should two adults regardless of marital status pay a different tax?

Being married or not is a lifestyle choice one makes freely as an exercise of liberty. There should be neither penalty nor incentive to the individual as regards the exercise of that or any other right.

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