To: GaryMontana; Rowdee; rdf; Keyes For President; Keyesertarian; Avoiding_Sulla; Taxman; *Taxreform; ..
PING!
Jay Wolfe is a FairTax supporter, and not only is he a supporter, he is willing to talk freely about it...in other words, he is a CHAMPION for the cause of economic and tax freedom for our posterity. He recently sent out a very well-founded and very detailed article he wrote on the subject to every print publication in the state.
I'll publish it below in a while.
To: *Taxreform
Dear Bill,
Thank you for asking me my opinion of the FairTax (HR 2525). The FairTax was introduced in House of Representatives by John Linder (R-GA) and Collin Peterson (D-MN). It is the only bi-partisan tax bill in the Congress. Any discussion on tax policy needs to start with an understanding of what we have today.
Our current tax system punishes all Americans for working hard and saving money. It requires Americans to reveal financial details of their lives to the Government that they might not want to reveal to their own children.
The cost of taxation is embedded today in all goods and services, which especially affect the poor and the elderly. This hidden cost has been determined to be approximately 20% to 30% of the cost of the goods and services. This cost drives prices higher and reduces the availability of workplace benefits and livable wages. It is even included in the cost of education as those expenses are paid for with after tax dollars unless you meet whatever complex rules meet the politicians fancy.
Those earning an income below the poverty level must pay the highly regressive Social Security tax. The Social Security and Medicare systems face an uncertain future because of political posturing. The money paid into these systems is based on a ratio of workers to retirees. As the baby boomers retire this ratio will drop to less than 3 workers supporting every retiree. This would require either a tremendous increase in Social Security tax rates or a reduction in benefits. I do not favor either option.
The IRS estimates currently there is a 20% evasion rate under the income tax. Much of this is in the form of cash transactions or illegal activities such as drug dealers. In addition, the IRS estimates there is an additional 40% of Americans out of compliance with the tax code, mostly due to the complexity.
As a nation, we spend more than $200 billion a year just to comply with the tax code. Since tax simplification in 1986, there have been over 7,000 changes to the tax code, all in the name of simplicity and fairness. Yet it would be difficult today to find one American who feels the tax code is either fairer or simpler today.
There are more than 30,000 lobbyists in Washington DC with the sole purpose of manipulating the tax code for their own special interest. Politicians of both parties use the code to give benefits for financial gains and re-election.
The tax code makes it difficult for American businesses to compete in the world economy driving good manufacturing jobs overseas leaving mostly lower paid service jobs with no benefits for American citizens. This has especially affected inner cities and more rural States such as West Virginia over the past 25 years. One of my main goals as Senator will be to bring these quality jobs back to America in general and West Virginia in specific. After an 89-year experiment in social engineering under an income tax, it is time for a change.
In contrast to the current system, the FairTax would abolish the income tax, payroll tax, capital gains tax, estate and gift tax. This means that every American would take home their earnings free from any Federal Government deductions. For the average American this would mean an increase in take home pay of 25%.
In place of these taxes, the FairTax would impose a 23% national retail sales tax. This tax would only be applied to new goods and services, so nothing used would be taxed. This would allow every American to determine their tax burden by the amount spent on new versus used goods. The FairTax would be revenue-neutral, meaning it would not require the removal or reduction of any current Government spending.
The tax would be collected by the retailers and forwarded to the States. Forty-five States already have a sales tax so this would not require any new agency and the IRS could be abolished. The States would keep a ¼ of 1% for administrative costs then forward the balance to the Federal Government .
No business inputs would be taxed. According to lead economists from Americas leading universities, this would reduce the cost of goods and services between 20% and 30%.
There would be a rebate paid to every family based only on the size of the family. This rebate would be paid at the beginning of each month and would completely un-tax those spending below the poverty level. This has the effect of removing the tax from all the essentials of life.
An affordable education is one of the best ways for Americans to get ahead. The FairTax does not tax education, allowing all education costs to be paid with tax free dollars. This makes a good education more obtainable for all.
Funds paid into Social Security and Medicare would be based on the total economy as opposed to the number of workers per retiree. This would stabilize Social Security and Medicare for future generations.
America would become the savings tax haven of the world, attracting money that could be used to build new opportunities for all Americans. There would be no taxation on investment income.
The FairTax would not be paid on exported products, but would be applied when imports were purchased. This would attract industry and manufacturing companies back to America to provide good paying jobs to our citizens. In a 1996 study by ______, CEOs of the 500 largest companies were asked how they would react to this type of tax reform. Eighty percent stated they would locate their next factory in the United States, while twenty percent said they would move their headquarters here.
American citizens would no longer be subjected to an arbitrary, abusive tax system. There would be no more requirements for an annual reporting of your financial life to Government. April 15th would just be another beautiful spring day. The IRS could be abolished and those resources could be better directed towards fighting terrorism that threatens our way of life.
In summary, the FairTax is perhaps the most researched tax bill ever presented for passage. Many say that this would be a great change, but it could never happen. I believe it will happen with effective leadership. I am prepared to lead. If elected as your Senator from West Virginia, I will sponsor companion legislation to the FairTax in the Senate and start the country back on the road to fiscal responsibility, accountability and fairness.
Whether one is for larger or smaller Government, we should all agree that Government should be visible and accountable.
Thank you again for the opportunity to address this issue. I look forward to representing all West Virginians in the United States Senate.
Sincerely,
Jay Wolfe
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson