Subject: The fairest tax reform is FAIR Tax Comment: Since the Income Tax was implemented in 1913, the tax code has burgeoned into a monstrous hydra. It is so complex that it is doubtful that any one person has read it, let alone understands it. Individual filings have been more and more complex. Paperwork and filing time have multiplied. Far from being a “progressive” tax, it has become regressive, even retributive. The Internal Revenue Service (IRS) has frequently abused its powers and exceeded its constitutional authority, and at times has been used for illegal political purposes. It has become a huge, inefficient bureaucracy consuming ever-mounting billions of dollars, always crying for more enforcement powers and increased budgets to collect revenues. The agency has abused its powers become invasive of privacy, and treading on the rights of many taxpayers. There have been scandalous conflicts of interests and politicization of the agency. In short, the code is a casuistic anachronism, and the IRS is a nightmare bureaucracy. Both have outlived their usefulness. The Federal Income Tax and IRS should be abolished. The 16th Amendment should be repealed. A new FAIR tax should be implemented in its place. I am impressed by the advantages of a national sales tax, particularly the current FAIR tax proposal as the most promising and fair tax plan advanced. There are many benefits to the Fair Tax proposal, which include the following: Eliminating payroll taxes will provide needed transparency to the tax system and be easily understood. No more hidden taxes. People actually take home the gross pay they have earned. The elimination of burdensome tax filings will be an economic breath of fresh air. This one feature alone will stimulate the economy with an infusion of capital and time now consumed by filing complicated tax forms. Instead of slaving over confusing and stressful tax forms citizens will be freed up to use the time in work or recreation, businesses will be able to invest capital into improvements, inventory, or hiring new workers. The FAIR Tax is administratively simple and more flexible. Retailers will add the tax as a single line entry at the bottom of each retail receipt at the point of sale. State revenue agencies will collect the tax and convey the federal portions to the federal government. The FAIR tax requires only a small federal administrative staff to oversee the tax collection. They will correlate their tax work with other professionals. There will be no need to intimidate taxpayers or invade their privacy. Future changes in tax rates can be made quickly and efficiently without the convoluted processes currently used. The FAIR Tax will be progressive in the sense that the "prebate" given to individuals makes up for the sales tax that low-income families will pay at the cash register, thus minimizing the impact of the tax on the poor, while fairly distributing the tax on the wealthy who will pay a proportionately higher tax based on higher-priced consumption. Instead of penalizing savings and investments by taxation, there is no question that the Fair Tax will encourage savings, which will help individuals, families, businesses and the overall economy in the long-term. Finally, the Fair Tax will level the economic playing field for U.S. manufacturers and service providers competing with foreign businesses. This is a critical need that the current tax structure stifles. By eliminating U.S. corporate and payroll taxes that are hidden in the cost of goods and services, U.S. made products and labor will be on parity with foreign competition. The FAIR tax applies tax collection at the retail sales level to domestic and imported goods equally. Virtually everyone agrees that the current tax system must be changed. Three main types of solutions have been proposed: Consumption Taxes, Flat Taxes, and reform of the current progressive income tax. Here are several specific reasons why the FAIR Tax is the best solution: Other consumption or sales tax proposals do not go far enough in the sense that they have not been as well researched and do not include the repeal of the 16th amendment. For a national sales tax to be widely accepted, the threat of an income tax must be removed. While other sales tax proposals have compelling arguments, none are as compelling or well constructed as the Fair Tax proposal (HR 25/S 25). Flat tax proposals do not eliminate the burden of the IRS. Flat taxes tend to shift more of the tax burden to the poor. Flat taxes will not encourage savings nor help U.S. companies have a fair chance in the marketplace. Flat taxes still allow for abuse and manipulation of the tax code, which is not as likely under the FAIR tax. Reforming the current code with mild steps like changing the top tax rate will do very little to improve things. Such timid modifications may be easier to do politically but do not accomplish any real change in a flawed system. Keeping the current regressive code largely intact will simply lead to more years of tinkering and frustration. The tax vehicle we have been driving is a broken-down “Model-T” bought in 1913. It is time to move into the 21st Century with a tax vehicle that will rocket America forward. This is the time to act boldly to reform the tax system by repealing the 16th Amendment, abolishing the IRS and replacing it with the FAIR Tax. Replacing the outmoded system IS necessary and possible! |