Subject: Retail Consumption Tax; FairTax Comment: There are many benefits of a Retail Consumption Tax like the FairTax (HR25 & S25). The rich will no longer be able to use legal entities; C-Corps, family foundations, charitable remainder trusts, etc. to shelter income from tax. It will be taxed when it is spent. Social Security and Medicare will become solvent again. Our current system only taxes wage and salary earners, and as the baby boomers retire there will be fewer and fewer workers left to pay income taxes. The retail consumption tax will tap all spending on goods and services broadening the base for our Social Security. Under a consumption tax the $1 Trillion underground economy would be taxed for the first time ever. Salary and wage earners will keep 100% of their paychecks. Their spending power will increase, because goods will cost the same once all the hidden taxes (corporate income tax) are eliminated from the supply chain. $400 Billion is spent annually by tax payers to submit $1.2 Trillion in taxes. This is a staggering 33 1/3% cost of collection. This waste would be eliminated. The elimination of income tax will make off shore corporations and bank accounts irrelevant. This will create a flood of monies into the US available for investment and job creation. The economic boom that follows will be astounding. American manufacturers will have a more level playing field as all goods foreign and domestic will be taxed the same. This to will increase job creation. Since the consumption tax eliminates taxes on interest, savings rates will rise. The poor will pay zero taxes by receiving a pre-bate based on anticipated spending. The current role of the IRS would no longer be required. The agency could be eliminated or reduced and used to monitor collection of the retail tax similar to state agencies. VAT and the flat tax do not create the above benefits because they continue to tax income. They do not eliminate payroll taxes, they do not make it any easier to comply with our muddled tax law, and they do not tax the underground economy. It is time to streamline our economy and increase our ability to compete in the global marketplace we now live. The Retail Consumption Tax (FairTax, HR25 & S25) is key to our success. |