Posted: Apr 26, 2005 By: Gaylon Vorwaller

Comment: GAYLON VORWALLER

I. Description of Proposal . the tax base (income, consumption, hybrid)
• I propose that we replace the current income tax with a consumption tax. I propose that the FAIRTAX proposed in congress as HR25 and S25 be the new tax. (www.fairtax.org)
• The Fairtax proposes 23%. I would propose a somewhat lower rate.
II. Impact of Proposal Relative to Current System .
• The tax is simple and straightforward.
• It is fair to all, and favors the poor by offering rebates on tax of basic living expenses.
• It provides for extreme economic growth and competitiveness
• It will bring American business back to America
• Compliance and administration costs will be 10% of current costs
• The tax is discretionary, as Americans will be able to keep all they make, and basically choose how much tax to pay, by how much, and for what, they spend money.
• Lower income people can avoid the tax by purchasing used goods – which they pretty much do anyway.
• One caveat: The current income tax must be wholly abolished, with provisions that it can never be reinstated. The 16th amendment must be repealed, so as to remove a chance for future confusion on this issue.
III. Transition, Tradeoffs and Special Issues .
• The tax is not only “revenue neutral”, but is projected to increase revenues, by capturing taxes from dollars currently not taxed from foreign visitors, dollars that are not taxed due to noncompliance, and even dollars from ill-gotten gain - $Billions of dollars that currently escapes taxation.
• There will be an impact to IRS employees. These can be transitioned to other jobs, and to the new revenue collection effort. Early retirements, government buyouts, and attrition can account for the rest of the unneeded job positions.
There will be a huge impact on the tax industry – attorneys, CPA’s. These individuals will have to 1) retool for the new tax 2) find another way to make money. This casualty is part of the normal evolution of any economy, and will be worth it to the hundreds of millions of Americans who will greatly benefit. In any case, these jobs are non-productive jobs, leaching billions of dollars every year out of the economy for non-productive, non-growth efforts. Congress must not bow to the pressure from lobbying from these organizations.