Posted on 04/16/2005 8:37:33 PM PDT by CHARLITE
It is a rare thing when the American people can get excited about a piece of federal legislation that involves taxes. Normally, our elected officials are trying very hard to figure out how to sugarcoat yet another tax increase so they can supplement their habit of funding things like museums for ground hogs and rodeos and tropical biospheres in the farm belt. But a bill sponsored by US Representative John Linder offers a “once in a lifetime” opportunity for our lawmakers to not only do what is right by the American people, but do something that makes them look good as well.
Say the word “change” to a member of congress and immediately their palms begin to sweat and their eyes start to shift nervously from side to side. Faster than the New York Times can put up another picture of a terrorist with a hood over his head, politicians erect a security wall in an effort to maintain the status quo.
But this time it doesn’t have to be that way.
Congressman Linder’s bill – H.R. 25, dubbed the FAIR Tax Bill – is a brilliant piece of legislation. What it proposes is nothing short of genius in its simplicity. The bill would replace our current inferior system of the income tax with a revenue-neutral personal consumption tax. The IRS would be eliminated as we know it and there would never be another tax deadline or audit again. It sounds too good to be true, right? Well, it is within our grasp. All we have to do is “lobby” our elected officials for it.
This proposed legislation would put in place a more equitable tax system while affording a win-win situation for the American people, business and government. In fact, there are no losers but for the political spendthrifts, not even the people employed by the Internal Revenue Service would lose.
If the FAIR Tax system was adopted, taxpayers would be able to keep 100% of their paychecks. In return a 23% consumer tax would be assessed on goods at the time of purchase. That may sound high but consider that most Americans fall into the 15% tax bracket and have to pay 7.65% in payroll taxes (just about 23% right there). Then add in all of the hidden taxes placed on goods and services, 23% is less than what most people pay now.
The beauty of this system is that it is directly proportionate to what people spend. Those who earn more tend to spend more and would pay more in taxes because they make more and spend more. Those with lesser income tend to spend less thus they would be paying less in taxes. The system is proportionate unlike the system in place today.
Critics say that the proposed tax would be unduly harsh on those below the poverty level. That couldn’t be further from the truth. Under the FAIR Tax a rebate payment would be issued to every American household to replace the sales tax paid on necessities. No American would pay taxes on necessities and those living below the poverty line would effectively pay no taxes at all.
Congressman Linder’s proposal provides a more stable tax revenue generating system than the income tax because consumer sales vary less than does the income of the American people. We have the most robust economy in the world with consumer confidence that is rivaled by none. This tax system allows us to benefit from that confidence.
Further, because this tax is assessed on the “end user” business-to-business purchases and expenditures would not be taxed. The proponent organization Americans for FAIR Tax has commissioned research studies that indicate that would stimulate an estimated 20% to 30% drop in consumer prices allowing for our spending dollars to go even further than they do today.
In a last gasp of twisted rationalization I can almost hear the politicos now, “But what of all the employees at the IRS and at the tax preparation companies?”
To be sure, there will be a need for credentialed tax professionals within the FAIR Tax system. Taxes are still being extracted so there will be a need for auditors. The difference here is that auditors would be allowed to be auditors instead of having to act like law enforcement officers. There would be some who would be in need of employment after the change – there’s that scary word again – most tax professionals are highly trained. With the estimated 10.5% growth the FAIR Tax would stimulate, the economy would be ripe to absorb these professionals into the private sector. This would eliminate the IRS and its feeding off of the public trough at a cost of $250 billion every year.
Oh, and by the way, the FAIR Tax would make moot the ongoing argument about Social Security and Medicare. Government would be fully funded under the FAIR Tax system.
The only reason this exceptional piece of legislation may not become a reality is that the politicians didn’t want it put in place. The only reason they could possibly have to cheat you and me out of a superior and more equitable system of taxation would be because they are afraid of “change.” The new system might spotlight their pork barrel addiction and their failure each and every year to balance the budget and spend within their means. The only reason they wouldn’t vote for this intelligent piece of legislation is greed.
If you are tired of taxpayer funded studies on the mating habits of the South American three-toed tree sloth and redundant public works projects, contact your elected officials today and demand that they support the FAIR Tax. After all, they work for you, you shouldn’t have to work a third of a year for them.
About the Writer: Frank is a media consultant, and editor/owner of a popular web journal.
Comments: fsalvato@comcast.net
Related Reading:
Bill Would Dump IRS for Sales Tax: http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=43764
Americans for FAIR taxation: http://www.fairtax.org
TAX PING
"Congressman Linder’s bill – H.R. 25, dubbed the FAIR Tax Bill – is a brilliant piece of legislation. What it proposes is nothing short of genius in its simplicity. The bill would replace our current inferior system of the income tax with a revenue-neutral personal consumption tax."
A tax collection system can not do this. Everyone can not take home more pay at the same time prices go down. This is called smoke and mirrors. They are creating money out of nothing. If take home pay for employees goes up, so do prices. There is no way around it unless you are lying.
If you would like to be added to this ping list let me know.
John Linder in the House(HR25) & Saxby Chambliss Senate(S25), offer a comprehensive bill to kill all income and SS/Medicare payroll taxes outright, and provide a IRS free replacement in the form of a retail sales tax:
H.R.25,S.25
A bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national retail sales tax to be administered primarily by the States.Refer for additional information:
In return a 23% consumer tax would be assessed on goods at the time of purchase. That may sound high but consider that most Americans fall into the 15% tax bracket and have to pay 7.65% in payroll taxes (just about 23% right there). Then add in all of the hidden taxes placed on goods and services, 23% is less than what most people pay now.
Indeed each an every one of use gets hit today not only before we can spend what left after being raped by individal income taxes, but again when we spend the remainder.
The following article covers the mechanism on how the current Federal tax system propagates and is embedded into consumption expenditure today.
DO YOU PAY YOUR INCOME TAX
AT THE SUPERMARKET?
by D. Sherman Cox J.D. L.L.M. Taxation
My husband is an accountant. We live in NY State. He figures we pay about 49% of our total income in taxes or for government regulation fees of some sort each year. We work 6 months for us, and the other 6 months for the left wing social programs (Ever notice how all the social programs are for the democrat base? There are no conservative social programs!).
Excellent information! Fine response. Thanks, ancient geezer!
Char :)
Doesn't get any more uniform than a fair tax for all.
Excellent point. Thanks for that reminder! You're absolutely right. Where are the conservative social programs?........oh wait......"faith based initiatives?"
So the democrats attempt to use class war fare to "Overtax the successful" is unconstitutrional, aye?
Wow. You found an itty bitty one that will never get accepted anyway. It's .....gasp!...too righteous and right wing oriented. Only sinful behavior is rewarded by our government.
Uniform means 'of one form' to me which rules out the progressive tax system we now have in place.
It said the poor would not be taxed for necessities.
If you want to shop for extra goodies and luxuries, why would you feel you shouldn't have to pay for extras like everyone else?
"The retired and people that may be out of work will get hit hard. Is it too hard for all you to understand?"
A change has to begin sometime. How much do the retired spend anyway? I thought once retired, consumtion decreased. It's the young that get hit the worst.
Short of repealing the Sixteenth Amendment the most
important SERIOUS reform would be the simplification of
the tax code. Steve Forbes said recently that the IRS
rules and regulations are some nine MILLION words. For
most Americans who can't afford tax lawyers and accountants
this tax code is unintelligible. Admittedly, most Americans
don't have so many assets and so much income that they would
need an accountant. But they are still CONFUSED by it all.
The point is that an integral part of common law is that
the mass of citizens should be able to grasp the basic
principles of what they are paying for. This is clearly
lacking. I'm not a millionaire but I and many people
I know (all income levels) have had the experience of
consulting two "experts" and getting three opinions!
The present system is intolerable because ultimately
one has no real certitude of being "right" or "wrong".
And we are at the mercy of the last one who passes
his judgment or opinion.
Yes. The young still have families to support,
A FAIR tax would be much easier, though, and much better. Often, the rich get to use loopholes, and those on social programs have found ways to turn food stamps etc. into cash for Nike sneakers and fine jewelry. They would also have to pay when the cheat the system, and many of them live better than those who are actually employed!
I like the idea of a Fair tax - a lot! Everyone would pay for what they consume.
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