House Majority Leader Signs On To Linder’s Bill Abolishing the IRS

FAIRTAX BUILDS MOMENTUM
House Majority Leader Signs On To Linder’s Bill Abolishing the IRS Washington, D.C. - Congressman John Linder (R-Georgia) is pleased to announce that he has added more than 20 co-sponsors – including House Majority Leader Tom DeLay (R-Texas) – to his innovative tax reform legislation, the FairTax. Linder’s bill, H.R. 25, would abolish all federal income taxes, death taxes, capital gains taxes, and payroll taxes, and replace them with a national retail sales tax.

"The momentum behind the FairTax continues to build, and Majority Leader DeLay’s co-sponsorship is just the latest signal that support for the FairTax is growing," said Linder. "The bill now has 21 co-sponsors – more than any other fundamental tax reform legislation in the House – and they represent a bipartisan coalition of members from across the nation. Not only do my colleagues recognize the harm done to the American people by the overly intrusive and burdensome income tax code, their constituents recognize it every April 15th," continued Linder.

The addition of DeLay and 14 other co-sponsors in the last month alone is just the latest positive news regarding the FairTax. In February, the annual report of the White House Council of Economic Advisers stated for the first time that elimination and replacement of the complex and arcane federal income tax code with a consumption tax would increase efficiency in the tax system and promote investment and growth. The report stated that a consumption tax, like the FairTax, could very well be the most suitable replacement for the income tax system.

I am the primary sponsor of The FairTax. The FairTax is one of the most exciting proposals to ever reach the American people. It offers long-needed tax relief – in the form of lower prices, nearly nonexistent compliance costs, and the ability to choose how much to spend in taxes – to all Americans, while eliminating the income tax and allowing Americans to keep 100 percent of their paycheck. The FairTax will dramatically reduce prices, protect and ensure funding of Social Security and Medicare, empower the low-income earners, and put choice and control back into the hands of every American. All the crucial elements are in place: a public that is eager and ready for a fairer tax system, and a Congress willing to seriously consider genuine tax reform. To be competitive in the next century and to renew the American dream, we must change the way we fund our national government.

• Repeals the all corporate and individual income taxes, payroll taxes, self-employment taxes, capital gains taxes, estate taxes and gift taxes.

• Imposes a revenue-neutral national sales tax on all new goods and services at the point of final purchase for consumption. Business-to-business transactions and used products (which have already been taxed) are not subject to the sales tax.

• Allow you to keep 100 percent of your paycheck, pension, and Social Security payments.

• Gross Domestic Product will increase by almost 10.5 percent in the first year after enactment.

• Real investment would initially increase by 76 percent relative to the investment that would be made under present law. While this increase would gradually decline, it remains 15 percent higher than under the existing tax structure.

• Exports would increase by 26 percent initially and would remain more than 13 percent above the level under the current tax system.

• Increases incentives to work by as much as 20 percent in many households, leading to higher economic growth and efficiency.

If you would like view the new FairTax PowerPoint slide presentation or consider the significant benefits of the FairTax in greater detail, please take some time to visit the "FairTax" section of my website located in the "Resource Headquarters."

National Taxpayers Union

March 31, 2003

The Honorable John Linder
1727 Longworth House Office Building
Washington, DC 20515

Dear Representative Linder:

On behalf of the 335,000-member National Taxpayers Union (NTU), I write to offer our endorsement of H.R. 25, the FairTax, and to urge all Members of Congress to join as cosponsors. Should H.R. 25 come before the House for a vote, it will be heavily weighted in our annual Rating of Congress.

America's present Tax Code is extremely punitive and complicated, taking more from taxpayers than ever before. The current Tax Code is clearly not what the nation envisioned when it ratified the 16^th Amendment nearly 100 years ago.

Initially, rates were extremely low. In fact, the tax rate on the first $20,000 of income was a mere one percent, while the highest rate was still a fairly reasonable seven percent on all income above $500,000. In 2001 dollars, that would equate to a one percent income tax on all income up to $300,270 while the seven percent rate would apply only to income earned above 7.2 million dollars. In fact, as late as 1939 only five percent of the population was required to file income tax returns.

Today, the federal income tax is extremely "progressive" in the worst possible sense of the word. Dangerously burdensome on both the taxpayer and the economy - and maddening in its complexity - it has become a detriment to America's economy.

While progressive income taxes are inherently unfair and unquestionably slow our economy, the regressive nature of our current payroll taxes certainly hurts those who can least afford to pay them. As you are aware, the poor in America do not pay excessive income taxes, but they do pay excessive payroll taxes.

Because your FairTax would replace both the income and payroll taxes with a simple, fair, 23 percent sales tax with monthly rebates, it would greatly benefit all Americans and our national economy.

As the federal income tax deadline approaches, Americans are vividly reminded that the burden of filing taxes can be nearly as bad as the burden of paying taxes. We salute you for your effort to reform both problems and urge your fellow Members of Congress to join you in this effort by working to pass H.R. 25.

Sincerely,

Paul J. Gessing
Director of Government Affairs

FairTax Facts! Americans For Fair Taxation (AFFT) is a non-partisan organization of grassroots volunteers who are working diligently to get H.R. 25, The Fair Tax Act of 2003 enacted. They currently number some 420,000+ members and are growing daily.

The American Farm Bureau Federation (AFBF!) supports the FairTax. The State Farm Bureaus membership totals over five million members.

Scrap The Tax Code! An excellent FairTax and NRST website!

FairTax Volunteer - Get Smart

Ten Worst Tax Laws

6. Progressivity of Income Tax Rates

Score: 47
Started when: 1913
By whom: President Wilson’s original income tax law featured progressive rates.
Why: Class war. Politicians argue that people who make more money should pay a larger share of it in taxes. It is central to the politics of envy and resentment that is the staple of the Democratic Party.
What it does: The tax rate escalates in steps for progressively higher levels of income. Under current tax law, the first $12,000 in taxable income is taxed at 10%; from $12,000 to $46,700 at 15%; from $46,700 at $112,850 at 27%; from $112,850 to $171,950 at 30%; from $171,950 to $307,050 at 35%; and from $307,050 up at 38.6%. This punishes people as they make more and reduces their incentive to invest and create jobs.
Revenue: In 1999, the highest personal income tax bracket yielded $164 billion in revenue, 8.6% of total federal revenues.
Reform efforts: The drive for a flat income tax, boosted by the Steve Forbes in his 1996 presidential campaign and promoted by now-retired Rep. Dick Armey (R.-Tex.), has stalled.

7. Income Tax Withholding

Score: 46
Started when: 1943
By whom: President Franklin Roosevelt signed the Current Tax Payment Act into law.
Why: Roosevelt promoted it as "a temporary wartime measure" to ensure a steady flow of funding for World War II. Lawmakers feared taxpayers might refuse to pay the higher tax rates and surcharges enacted in the Revenue Act of 1942.
What it does: Compels employers to withhold federal taxes from workers’ paychecks and pay them directly to the government on the workers’ behalf
Revenue: According to the IRS, in fiscal year 2002, the federal government took in $1.39 trillion through income and payroll tax withholding.
Reform efforts: In 2001, Representatives Ron Paul (R.-Tex.), Jeff Flake (R.-Ariz.), and Steve Largent (R.-Okla.) introduced H.R. 1364, the Cost of Government Awareness Act, which would have eliminated the withholding of income taxes and required individuals to pay income taxes in monthly installments. No serious effort is now under way to pass such a law.

The Tax Man Cometh As Cato Institute President Ed Crane has said, "Taxes are actually the price we pay for our failure to create a civil society."

He’s right. In a genuinely "civil society" where Americans depended more on private institutions, families, charities, and private enterprise to solve society’s problems, and were dependent less on government, we wouldn’t need an IRS that collects $2 trillion in taxes (more than the entire GDP of most countries) each year. We might not need an income tax system at all.

This is useful food for thought as tax filing season is upon us. Today, when combining federal, state and local taxes, many middle-income Americans work as large a share of the day to pay the government’s bills as their own, according to a new report by the Texas-based Institute for Policy Innovation.

It wasn’t always like this. In fact, Justice Holmes can be excused for his enthusiasm for paying taxes because during his lifetime taxes were less than one-third what they are today. In fact, for the first 100 years of the nation, taxes were reasonably non-oppressive. In colonial times opposition to high taxes was deeply ingrained in the American spirit (the Revolutionary War was, after all, the first American tax revolt) and this hostility lasted throughout the 19th Century.

But even more encouraging is the rising tide of voter support for the FAIR Tax. This proposal would replace the entire income tax structure with a national retail sales tax. Rep. Jon Linder (R.-Ga.) is spearheading the crusade for this repeal of the income tax. Linder says that abolition of the income tax and implementation of a national sales tax would create thunderous rates of growth for the economy, which would be liberated from the shackles of high tax rates on work and income.

The FAIR Tax plan would also get the IRS out of our lives and out of our pocketbooks, Linder adds. It would no longer be the government’s business how much money you made.

And perhaps best of all, the FAIR Tax would make April 15th just another warm Spring day again, rather than a day that we approach with dread and trepidation. The average American now spends 15 to 20 hours on tax preparation and half of us wait till the last week to do our taxes. With the Iraq war winding down in victory, here’s hoping that our next major triumph in America is in the war against tax tyranny.

I'm very afraid of the Fair Tax.

As your should well be.

The NRST is an inherently regressive form of taxation that is truly despotic. Long term, it would result in a two-tiered socio-economic stratification of our society. It is not disimilar to a 21st Century eco-feudal system where the corporate aristocracy invest and expand their property holdings completely tax-free, while the serfs are overburdened with the excessive taxation on consumption and persuaded that it's supposedly "fair" because the consumption taxes are redistributed through the formal social welfare system.

Posing as "tax reform", the NRST (HR 2525) also represents a "land grab" where business interests are favored over individuals purchasing for their own use:

A family purchasing their own new home for $200,000 pays NRST at a tax-included 23% rate. This means that of the $200,000 paid, $154,000 goes to the seller, and the Gov't receives $46,000 in tax.
A landlord/investor can exploit the business exemption of NRST and purchase the same new single family dwelling tax free as a rental investment for only $154,000. Tenants pay NRST on rent and Landlords act as tax collectors for the government
The $154,000 vs. $200,000 purchase price advantage that landlord/investors enjoy over individual personal homebuyers can be expressed two ways:
- Landlord/investors enjoy a 23% discount compared to the individual personal home buyer.
- Individual personal home buyers must pay 29.87% more than landlord/investors.

This a significant inequity between individuals trying to buy their own new homes and landord/investors looking to buy the same single family dwelling as a rental investment. This disparity has long term implications affecting the distribution of private property. The American tradition favoring individual property rights is reversed. The NRST would discourage individual "consumption" of real property.

"... legislators cannot invent too many devices for subdividing property, only taking care to let their subdivisions go hand in hand with the natural affections of the human mind. The descent of property of every kind therefore to all the children,...
But it is not too soon to provide by every possible means that as few as possible shall be without a little portion of land. The small landholders are the most precious part of a state."
-- Thomas Jefferson to James Madison, Oct. 28, 1785 -- PROPERTY AND NATURAL RIGHT

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

"A home is NOT an investment, W/G, but merely a place to live."