Posted on 11/02/2005 10:09:04 AM PST by Eaglewatcher
-1- An Open Letter to the President, the Congress, and the American people Concerning Reform of the Federal Tax Code
Dear Mr. President, Members of Congress, and Fellow Americans,
We, the undersigned business and university economists, welcome and applaud the ongoing initiative to reform the federal tax code. We urge the President and the Congress to work together in good faith to pass and sign into federal law H.R. 25 and S. 25, which together call for:
• Eliminating all federal income taxes for individuals and corporations,
• Eliminating all federal payroll withholding taxes,
• Abolishing estate and capital gains taxes, and • Repealing the 16th Amendment
We are not calling for elimination of federal taxation, which would be irresponsible and undesirable. Nor does our endorsement call for reduced federal spending. The tax reform plan we endorse is revenue neutral, collecting as much federal tax revenue as the current income tax code, including payroll withholding taxes.
We are calling for elimination of federal income taxes and federal payroll withholding taxes.
We endorse replacing these costly, oppressively complex, and economically inefficient taxes with a progressive national retail sales tax, such as the tax plan offered by H.R. 25 and S. 25 – which is also known as the FairTax Plan. The FairTax Plan has been introduced in the 109th Congress and had 54 co-sponsors in the 108th Congress.
If passed and signed into law, the FairTax Plan would:
• Enable workers and retirees to receive 100% of their paychecks and pension benefits,
• Replace all federal income and payroll taxes with a simple, progressive, visible, efficiently collected national retail sales tax, which would be levied on the final sale of newly produced goods and services,
• Rebate to all households each month the federal sales tax they pay on basic necessities, up to an independently determined level of spending (a.k.a., the poverty level, as determined by the Department of Health and Human Services), which removes the burden of federal taxation on the poor and makes the FairTax Plan as progressive as the current tax code,
• Collect the national sales tax at the retail cash register, just as 45 states already do,
• Set a federal sales tax rate that is revenue neutral, thereby raising the same amount of tax revenue as now raised by federal income taxes plus payroll withholding taxes,
• Continue Social Security and Medicare benefits as provided by law; only the means of tax collection changes,
• Eliminate all filing of individual federal tax returns,
• Eliminate the IRS and all audits of individual taxpayers; only audits of retailers would be needed, greatly reducing the cost of enforcing the federal tax code,
An Open Letter to the President, the Congress, and the American people -2- • Allow states the option of collecting the national retail sales tax, in return for a fee, along with their state and local sales taxes,
• Collect federal sales tax from every retail consumer in the country, whether citizen or undocumented alien, which will enlarge the federal tax base,
• Collect federal sales tax on all consumption spending on new final goods and services, whether the dollars used to finance the spending are generated legally, illegally, or in the huge “underground economy,”
• Dramatically reduce federal tax compliance costs paid by businesses, which are now embedded and hidden in retail prices, placing U.S. businesses at a disadvantage in world markets,
• Bring greater accountability and visibility to federal tax collection,
• Attract foreign equity investment to the United States, as well as encourage U.S. firms to locate new capital projects in the United States that might otherwise go abroad, and
• Not tax spending for education, since H.R. 25 and S. 25 define expenditure on education to be investment, not consumption, which will make education about half as expensive for American families as it is now.
The current U.S. income tax code is widely regarded by just about everyone as unfair, complex, wasteful, confusing, and costly. Businesses and other organizations spend more than six billion hours each year complying with the federal tax code. Estimated compliance costs conservatively top $225 billion annually – costs that are ultimately embedded in retail prices paid by consumers.
The Internal Revenue Code cannot simply be “fixed,” which is amply demonstrated by more than 35 years of attempted tax code reform, each round resulting in yet more complexity and unrelenting, page-after-page, mind-numbing verbiage (now exceeding 54,000 pages containing more than 2.8 million words). Our nation’s current income tax alters business decisions in ways that limit growth in productivity. The federal income tax also alters saving and investment decisions of households, which dramatically reduces the economy’s potential for growth and job creation.
Payroll withholding taxes are regressive, hitting hardest those least able to pay. Simply stated, the complexity and frequently changing rules of the federal income tax code make our country less competitive in the global economy and rob the nation of its full potential for growth and job creation.
In summary, the economic benefits of the FairTax Plan are compelling. The FairTax Plan eliminates the tax bias against work, saving, and investment, which would lead to higher rates of economic growth, faster growth in productivity, more jobs, lower interest rates, and a higher standard of living for the American people.
An Open Letter to the President, the Congress, and the American people -3- The America proposed by the FairTax Plan would feature:
• no federal income taxes,
• no payroll taxes,
• no self-employment taxes,
• no capital gains taxes,
• no gift or estate taxes,
• no alternative minimum taxes,
• no corporate taxes,
• no payroll withholding,
• no taxes on Social Security benefits or pension benefits,
• no personal tax forms,
• no personal or business income tax record keeping, and
• no personal income tax filing whatsoever.
No Internal Revenue Service; no April 15th; all gone, forever.
We believe that many Americans will favor the FairTax Plan proposed by H.R. 25 and S. 25, although some may say, “it simply can’t be done.” Many said the same thing to the grassroots progressives who won women the right to vote, to those who made collective bargaining a reality for union members, and to the Freedom Riders who made civil rights a reality in America.
We urge Congress not to abandon the FairTax Plan simply because it will be difficult to face the objections of entrenched special interest groups – groups who now benefit from the complexity and tax preferences of the status quo. The comparative advantage and benefits offered by the FairTax Plan to the vast majority of Americans is simply too high a cost to pay.
Therefore, we the undersigned professional and university economists, endorse a progressive national retail sales tax plan, as provided by the FairTax Plan. We urge Congress to make H.R. 25 and S. 25 federal law, and then to work swiftly to repeal the 16th Amendment. Respectfully,
Donald L. Alexander Professor of Economics Western Michigan University
Wayne Angell Angell Economics
Jim Araji Professor of Agricultural Economics University of Idaho
Ray Ball Graduate School of Business University of Chicago
Roger J. Beck Professor Emeritus Southern Illinois University, Carbondale
John J. Bethune Kennedy Chair of Free Enterprise Barton College
David M. Brasington Louisiana State University
Jack A. Chambless Professor of Economics Valencia College
Christopher K. Coombs Louisiana State University
William J. Corcoran, Ph.D. University of Nebraska at Omaha
Eleanor D. Craig Economics Department University of Delaware
-4- An Open Letter to the President, the Congress, and the American people
Susan Dadres, Ph.D. Department of Economics Southern Methodist University
Henry Demmert Santa Clara University
Arthur De Vany Professor Emeritus Economics and Mathematical Behavioral Sciences University of California, Irvine
Pradeep Dubey Leading Professor Center for Game Theory Dept. of Economics SUNY at Stony Brook
Demissew Diro Ejara William Paterson University of New Jersey
Patricia J. Euzent Department of Economics University of Central Florida
John A. Flanders Professor of Business and Economics Central Methodist University
Richard H. Fosberg, Ph.D. William Paterson University
Gary L. French, Ph.D. Senior Vice President Nathan Associates Inc.
Professor James Frew Economics Department Willamette University
K. K. Fung University of Memphis
Satya J. Gabriel, Ph.D. Professor of Economics and Finance Mount Holyoke College
Dave Garthoff Summit College The University of Akron
Ronald D. Gilbert Associate Professor of Economics Texas Tech University
Philip E. Graves Department of Economics University of Colorado
Bettina Bien Greaves, Retired Foundation for Economic Education
John Greenhut, Ph.D. Associate Professor Finance & Business Economics School of Global Management and Leadership Arizona State University
Darrin V. Gulla Dept. of Economics University of Georgia
Jon Halvorson Assistant Professor of Economics Indiana University of Pennsylvania
Reza G. Hamzaee, Ph.D. Professor of Economics & Applied Decision Sciences Department of Economics Missouri Western State College
James M. Hvidding Professor of Economics Kutztown University
F. Jerry Ingram, Ph.D. Professor of Economics and Finance The University of Louisiana-Monroe
Drew Johnson Fellow Davenport Institute for Public Policy Pepperdine University
Steven J. Jordan Visiting Assistant Professor Virginia Tech Department of Economics
Richard E. Just University of Maryland
Dr. Michael S. Kaylen Associate Professor University of Missouri
David L. Kendall Professor of Economics and Finance University of Virginia's College at Wise
Peter M. Kerr Professor of Economics Southeast Missouri State University
Miles Spencer Kimball Professor of Economics University of Michigan
James V. Koch Department of Economics Old Dominion University
Laurence J. Kotlikoff Professor of Economics Boston University
Edward J. López Assistant Professor University of North Texas
Franklin Lopez Tulane University
Salvador Lopez University of West Georgia
Yuri N. Maltsev, Ph.D. Professor of Economics Carthage College
Glenn MacDonald John M. Olin Distinguished Professor of Economics and Strategy Washington University in St. Louis
Dr. John Merrifield, Professor of Economics University of Texas-San Antonio
An Open Letter to the President, the Congress, and the American people -5- Dr. Matt Metzgar Mount Union College
Carlisle Moody Department of Economics College of William and Mary
Andrew P. Morriss Galen J. Roush Professor of Business Law & Regulation Case Western Reserve University School of Law
Timothy Perri Department of Economics Appalachian State University Mark J. Perry School of Management and Department of Economics University of Michigan-Flint
Timothy Peterson Assistant Professor Economics and Management Department Gustavus Adolphus College
Ben Pierce Central Missouri State University
Michael K. Pippenger, Ph.D. Associate Professor of Economics University of Alaska
Robert Piron Professor of Economics Oberlin College
Mattias Polborn Department of Economics University of Illinois
Joseph S. Pomykala, Ph.D. Department of Economics Towson University
Barry Popkin University of North Carolina-Chapel Hill
Steven W. Rick Lecturer, University of Wisconsin Senior Economist, Credit Union National Association
Michael Rizzo Assistant Professor of Economics Centre College
Paul H. Rubin Samuel Candler Dobbs Professor of Economics & Law Department of Economics Emory Univeristy
John Ruggiero University of Dayton
Michael K. Salemi Bowman and Gordon Gray Professor of Economics University of North Carolina at Chapel Hill
Dr. Carole E. Scott Richards College of Business State University of West Georgia
Carlos Seiglie Dept. of Economics Rutgers University
John Semmens Economist Phoenix College, Arizona
Alan C. Shapiro Ivadelle and Theodore Johnson Professor of Banking and Finance Marshall School of Business University of Southern California
Dr. Stephen Shmanske Professor of Economics California State University, Hayward
James F. Smith University of North Carolina- Chapel Hill
Vernon L. Smith Economist W. James Smith Dean of Liberal Arts and Sciences and Professor of Economics University of Colorado at Denver
John C. Soper Boler School of Business John Carroll University
Roger Spencer Professor of Economics Trinity University
Daniel A. Sumner, Director, University of California Agricultural Issues Center and the Frank H. Buck, Jr., Chair Professor, Department of Agricultural and Resource Economics, University of California, Davis
Curtis R. Taylor Professor of Economics and Business Duke University
Robert Vigil Analysis Group, Inc.
John H. Wicks, Ph.D. Professor Emeritus Department of Economics University of Montana
F. Scott Wilson, Ph.D. Canisius College
Mokhlis Y. Zaki Professor of Economics Emeritus Northern Michigan University
An Open Letter to the President, the Congress, and the American people -6-
I am not one of the people ("EVERYONE") that thinks this.
Excellent. I'm always impressed by thorough research nomatter where it may lead. If this was yours, my hat is off to you, sir.
I must say that if the FairTax goes into effect, that I fully intend to pay my valuable employees, the ones that would be hell to replace, EVERYTHING they're getting now, including what's withheld from them for the IRS AND FICA, INCLUDING "the employer's matching contribution [cough, cough]".
I am not married to the FairTax, but it's the best thing I've seen so far, especially after the disastrous attempt to impose a "flat" tax in 1986. As a former victim, not only of guilty-until-proven-innocent IRS kangaroo courts, but of screaming invective from out-of-control IRS employees, that I am eager for anything that will put an end to the IRS once and for all. I hope you can understand my motivation. But, if you can't, so be it.
bttt
Same old endless spam.
You are a statist. This business about same old same old is wearing thin with a lot of us. We have a plan, a house Resolution, about 55 sponsors and a book that has been number 1 on the NYT best seller list for three weeks.
The men who wrote that book have been enjoying audiences of 5,6 ,700 people at their book signings. We are the Boston Tea Party. You are the Redcoats. We are the future, you are the past. We are doing something. You are not. We are determined, you are negative. We are 600,000 strong (at last count) you are a handful of K street lawyers and IRS employees. We are so fed up that we might just throw a bunch of bitter tea into a harbor. You have no such will. You are only willing to obey. We are willing to throw you off of your throne.
It's like when you watch an old episode of The Andy Griffith Show. You can always tell who is the bad guy right off the bat. The only question is: what life lesson shall be learned? You are similar. You are dishonest and especially wicked with your little stingers like, "get it?". Your dishonesty is so easy to see, so overt, to those of us who understand the fair tax argument. I do understand that lurkers would be confused, especially after they read your incredible falsehoods. I'm really unsure why I continue to engage you, other than the fact that I told you that you were in my crosshairs about a year ago.
Since then I, and many other Fair Tax supporters, have destroyed any semblance of argument that you ever had. My late posts to you are just posts of spite. You have no credence here, you're just a pest. I return your spite with my spite, cuz I'm just a sick and tired taxpayer, sick and tired of paying you and the rest of your K S bastards. Have you ever been tarred and feathered?
I don't think it will burn all that much, but I'll betch it hurts one's feelings.
I doubt that anyone here can decipher what you are saying.You mean you can't because it wasn't spelled out for you in the Fairtax bible? I'm not surprised you can't since you, (a retired contractor/builder?) don't understand the basic concept of builders hiring sub-contractors in the construction process...
Have you ever read the bill?...When you do look up "`SEC. 904. TRUST FUND REVENUE." Paragraphs (d), (e) and (f)
Oh yeah and regarding the "compliance cost" for withholding, check out "`SEC. 903. WAGES TO BE REPORTED TO SOCIAL SECURITY ADMINISTRATION."...that includes reporting self-employment income as well.
To replace it with a scheme that won't lower taxes or spending by so much as a cent. False "reform".
Can't say I'm surprised that such dishonesty would appeal to you.
You're claiming that employees aren't paying any taxes but that they will under the NRST?
Strange "point", whatever it is.
Only one problem. This would eliminate 90% of the power congress has. It will only pass if the voters absolutely demand it. I don't see much chance of that in the near future, but it's a brilliant idea anyway.
They wanted the British to continue taxing tea at the same rate?
Funny, the history books never mentioned that.
By reducing federal taxation and spending by 0.0%.
It wouldn't eliminate their ability to spend it, but it would limit their ability to manipulate voters with tax cuts. The beauty of this plan is the natural progressivity of it, the more you spend the more you get taxed. But, when all is said and done, everyone has the power to limit their taxes by limiting how much they spend.
You seem to be running away from your original point - you said that the nrst is a scam because it doesn't lower taxes - stressing its revenue neutrality.
In response, I asked you to consider whether elimnating withholding and having taxpayers write a monthly check would reduce spending- even though it would be revenue neutral.
The point being made (and was obvious to even you) is that the method of tax collection has a great bearing on taxpayer sentiment. Nobody will put up with taxes and tax costs so high.
So the fact that the fair tax bill is revenue neutral isn't what would put downward pressure on spending. Same as if we changed no tax law except to say no more withholding- from now on write a monthly check to the feds...there's no change in revenue collection there. But only a retard would say changing the method of collection as such would have no effect on taxes and spending.
Changing to monthly checks would hurt - hurt a lot. The system that makes taxpayers aware of the tax burden is a system that will be fought by leftists.
If you really wanted a system to make taxpayers aware of the tax burden, you could eliminate witholding and force taxpayers to write a check weekly! Or better yet, daily! If you really want people to be uspet enough to change the behavior of politicians wrt taxes (spending), make the taxpayer pay from cash out of his wallet! Make him pay everday by sucking his hard-earned $ from his very hands - and there WILL be a change. Is that your fear?
the fact that the fair tax bill is revenue neutral isn't what would put downward pressure on spending. Same as if we changed no tax law except to say no more withholding- from now on write a monthly check to the feds...there's no change in revenue collection there. But only a retard would say changing the method of collection as such would have no effect on taxes and spending.
Are you so myopic as to not see that revenue neutrality is not what puts downward pressure on taxes? Why do you continually igonre ideas outside of the one idea in your view?
If we changed our system only to eliminate withholding, but kept it revenue neutral, and instead had people pay in cash from their pockets, there would be a change. That much is trivial. If you choose to go on ignoring that fundamental idea, you will continue to appear insufficiently prepared to discuss the matter.
Holy cow you are dense.
Revenue neutral has no affect on spending. If it did, why do we have deficits? Revenue neutrality is only a way to make the fair tax bill politically viable. It would be impossible to negotiate spending cuts in an amount sufficient to placate the taxpayers. It always has been - that's why it's never been done.
Of course, the folks who don't want spending cuts will argue for them prior to the fair tax - because they know spending cuts won't happen - without a change in taxpayer sentiment.
Indeed, seeing the obvious change in taxpayer sentiment post fair tax, leftists are doing anything they can to prevent it from moving forward. The left knows that when people actually perceive the money leaving their pockets, people won't stand for a lot of spending that the left depends on.
Witholding income minimizes the effect of taxation on the populace (we never see it, taxes are hidden in prices).
Charging an nrst maximizes the effect of taxation on the populace. (We always have it and must give it up out of our hands, "FEDERAL TAX $$$" is printed on every receipt to reinforce the burden)
The nrst is the antithesis of the marist income tax. Why are you opposing it on false grounds? What's your real reason for opposition?
But under the nrst, they'll be keenly aware of the tax burden and will demand more spending cuts.
Do you oppose spending cuts?
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