Posted: Apr 26, 2005 By: William Wadford

Comment: Tax Reform Comments

The country is in desperate need of tax reform. The current system is rife with favoritism, is so complex the IRS can not figure it out and is a drag on our national economy. It is simply a bad system too far gone to resuscitate.

The answer is called the FairTax (www.fairtax.org). Don't confuse this with a VAT. The FairTax is a tax on retail sales – sales to end consumers. With apologies to John Lennon; Imagine no Income Tax, it’s easy if you can.

After years of effort, broadly supported legislation is before both houses of Congress (HR 25 and S 25) the FairTax. The FairTax replaces the income tax with a retail sales tax on new goods and services. This tax rate is revenue neutral, generating enough tax revenue to completely replace (emphasis added) all federal personal, gift, estate, capital gains, alternative minimum, payroll tax withholding, Social Security, Medicare, self-employment, and corporate taxes as well as the 7.65% employer matching of FICA taxes.

The FairTax is also progressive, with a monthly rebate paid to each household in the amount equal to the sales tax on that household's poverty-level income (Those at the poverty level pay zero effective sales tax).

Scrap the current system. Please recommend installing the FairTax as delineated in HR 25 and S 25.