Each year it costs us over $250 billion in record keeping and collection costs just to comply with the current code. This $250 billion in wasted paperwork is equal to $1000 every year for every man, woman and child in the U.S. The FairTax will raise the same amount of tax revenue but the cost to comply with it will only be about $10 billion annually. That’s equal to only $45 for every man, woman and child.
Not only is the current 45,000-page tax code wasteful of our money and time, it is so complicated that tax experts can’t agree on how to fill out a given tax return. The cost to businesses to comply with the current tax code is passed on to customers and adds an average of over 22% to the cost of every good and service produced in the U.S. This hidden tax puts Americans at a 22% disadvantage when competing here or abroad with foreign produced goods and services. With the elimination of the current tax code prices will decline by an average of over 22% and result in companies and jobs returning to the U.S.
Our founding fathers saw an income tax as very dangerous to the freedom of citizens and twice forbade it in the U.S. constitution. In 1913 politicians amended the constitution and passed an income tax that started at 1% for the very rich. Today this has evolved to where the minimum federal income related tax that a low-income person can achieve is 47.3% (15.3% social security & Medicare taxes, 22% hidden tax discussed above, and the minimum income tax rate of 10% = 47.3%). This doesn’t include gasoline, state income and property taxes, etc. The current tax code is very regressive because lower income workers pay a much higher percent of their income in these taxes.
Almost half of the lobbying in Washington is to obtain tax favors for the various interest groups at the expense of the rest of us. This perverts our representative form of government. NO amount of campaign finance reform will solve this problem because the lawmakers are enjoying the perks from the lobbyists. Those with vested interests in the current tax system will likely call the FairTax a risky or radical tax scheme. However, it is the failed 90-year-old radical income tax experiment that has proven to be as risky and dangerous as our founding fathers had predicted. What we need now is fundamental tax reform.
The FairTax is fundamental tax reform. It is a tax on consumption, which treats everyone equally, as our founding fathers intended. It is a simple 23% sales tax on all new goods and services. This sounds high unless we are aware of the 47.3% that people even the lowest income bracket are now paying. Extensive research shows that this 23% sales tax will raise the same amount of revenue as does the current tax code, but without the wasteful paperwork and invasion of our privacy. This research also shows that a sales tax will provide a more stable revenue source than the income tax. A key provision of the FairTax is that it protects the poor by providing for a monthly rebate to every citizen in the amount of sales that would be paid on basic needs purchases. Every household receives a check in the amount of 23% of the poverty level for a household of their size. In other words, the poor will pay no taxes. Also, no tax is to be paid on purchases of used items. There are also no taxes on savings and investment income, which will encourage savings that will then be available to finance investment, which will encourage economic growth and more jobs.
The FairTax is advocated by the Americans For Fair Taxation (AFFT), a national non profit, non partisan research group that has evolved into a volunteer grassroots group to bring about the enactment of the FairTax bill. AFFT has spent over $13 million for research performed by some of the greatest economists and market experts in the U.S., including the Chairman of the Economics Department at Harvard and top economists at Stanford, MIT, University Of Chicago, research think tanks, etc. The FairTax has been called “the most researched public policy issue ever”.
To learn more go to the FairTax website: FairTax.org or call (1(800) 324-7829. Studies have shown that 84% of the public supports the FairTax over other alternatives once they learn about all the alternatives. The Bush Administration has expressed considerable interest in replacing the current tax code with a consumption tax, like the FairTax. The FairTax is attractive to labor, business, rich and poor. It is unconscionable that we, as a free people, allow ourselves to be taxed in such an inefficient, coercive, and invasive manner. Just think: NO MORE TAX RETURNS!!!
Just imagine if everyone wanted to buy used cars to avoid the taxes.
Remember when some or other east coast state put a special tax on pickups? No pickups were sold until the tax was repealed! People bought cars, or went to other states for their truck purchase, or bought from private parties.
I predict that Detroit et al. will fight this tooth and nail.
To say nothing of H&R Block.
The "bipartisan" bill has gone from 7 co-sponsors to 1 co-sponsor....
Wait a minute I thought Linder claimed that HR 2525 would be 'revenue neutral'. How can HR 2525 be revenue neutral AND save the taxpayers $2.5 trillion over the next 10 years as claimed later in the article?