Thursday, August 17, 2006

Why I so strongly support the FairTax.

Yesterday evening I was asked if I was president what would be the first thing I would try to do while in office. Without a doubt I responded that I would push congress to pass the FairTax.

In fact, if I was to run for office the FairTax would be a huge part of my campaign platform. Why??? Because I believe that the FairTax would be the biggest transfer of power from politicians to the citizens of this country since the end of the Revolutionary War.

Here is just a over veiw of what the Fair Tax is and what it will do for you and America. The FairTax proposal is a comprehensive plan to replace federal income and payroll taxes, including personal, gift, estate, capital gains, alternative minimum, Social Security/Medicare, self-employment, and corporate taxes.

The FairTax proposal integrates such features as a progressive national retail sales tax, dollar-for-dollar revenue replacement, and a rebate to ensure that no American pays such federal taxes up to the poverty level.

Included in the FairTax plan is the repeal of the 16th Amendment to the Constitution. The FairTax allows Americans to keep 100 percent of their paychecks (minus any state income taxes), ends corporate taxes and compliance costs hidden in the retail cost of goods and services, and fully funds the federal government while fulfilling the promise of Social Security and Medicare.

Americans take home their whole paychecks.
Not only do more Americans have jobs, but they also take home 100 percent of their paychecks (except where state income taxes apply). No federal income taxes or payroll taxes are withheld from paychecks, pensions, or Social Security checks.

No federal sales tax up to the poverty level means progressivity like today's tax system.
To ensure no American pays tax on the necessities of life, the FairTax plan provides a prepaid, monthly rebate (prebate) for every registered household to cover the consumption tax spent on necessities up to the federal poverty level. This, along with several other features, is how the FairTax completely untaxes the poor, lowers the tax burden on most, while making the overall rate progressive.

However, the FairTax is progressive based on lifestyle/spending choices, rather than simply punishing those taxpayers who are successful. Do you see how much freer life is with the FairTax instead of the income tax?

Retail prices no longer hide corporate taxes or their compliance costs, which drive up costs for those who can least, afford to pay.
Did you know that hidden income taxes and the cost of complying with them currently make up 20 percent or more percent of all retail prices? It's true.

According to Dr. Dale Jorgenson of Harvard University, hidden income taxes are passed on to the consumer in the form of higher prices - from an average 22 percent on goods to an average 25 percent on services - for everything you buy. If competition does not allow prices to rise, corporations lower labor costs, again hurting those who can least afford to lose their jobs.

Finally, if prices are as high as competition allows and labor costs are as low as practical, profits/dividends to shareholders are driven down, thereby hurting retirement savings for moms-and-pops and pension funds invested in Corporate America.

With the FairTax, the sham of corporate taxation ends, competition drives prices down, more people in America have jobs, and retirement/pension funds see improved performance.

The FairTax will stop job out sourcing, brings jobs home and make American products more competitive on the world market.
Most importantly, the FairTax does not burden U.S. exports as they are with the current income tax.

So the FairTax allows U.S. exports to sell overseas for prices 22 percent lower, on average, than they do now, with similar profit margins. Lower prices sharply increase demand for U.S. exports, thereby increasing job creation in U.S.manufacturing sectors.

At home, imports are subject to the same FairTax rate as domestically produced goods. Not only does the FairTax put U.S. products sold here on the same tax footing as foreign imports, but the dramatic lowering of compliance costs in comparison to other countries' value-added taxes also gives U.S. products a definitive pricing advantage which foreign tax systems cannot match.

Tax criminals - don't make criminals out of honest taxpayers.
Today, the IRS will admit to 25 percent non-compliance with the code. FairTax.org will be generous and simply take the position that this is likely a conservative estimate of the underground economy.

However, this does not take into account the criminal/drug/porn economy, which equally conservative estimates put at one trillion dollars of untaxed activity. The FairTax will tax this - criminals love to flash that cash at retail - while continuing to provide the federal penalties so effective in bringing such miscreants to justice. The substantial decrease in points of compliance - from every wage earner, investor, and retiree, down to only retailers - also allows enforcement to concentrate on following the money to criminal activity, rather than making potential criminals out of every taxpayer struggling to decipher the current code.

No Tax Penalty On Savings or Investments.
Under the fair tax plan you can save and invest however you want, no tax penalty on interest from savings, withdrawl money from investment and retirement accounts with no tax penalty.

No More Forms to Fill Out And File.
This one is by far my favorite. Never have to file any kind of IRS form again. Make April 15 just another beutiful spring day.

1 comment:

Sgt Mac said...

Once again I almost agree, but I stick with my guns that the poor a necessity in life. The division in classes are also a necessity in life. With a few fixes to the plan I could support it. Spain for president.