Subject: Tax solution Comment: Thank you for the opportunity to make comment on cleaning up the US tax system -- proposals and possible solutions. I am convinced that there is nothing that comes close in the governmental or political landscape that could cause such dramatic improvement to our economy and benefit to the citizenry enmasse as the so-called Fairtax proposal, HR25/S25. It will rev up our economy and create quality jobs -- using only the political capitol and will available to us now, it offers realistic opportunity for the government to balance the budget and reverse the pathetic deficit trend. Here are 10 strong non-partisan reasons to support and make HR25/S25 your top recommendation: 1. Preserves Social Security and Medicare with an expanded tax base that is revenue neutral and provides an opportunity for private retirement savings accounts without taking $2 trillion out of Social Security to pay for it. (See #8 & #9) 2. Removes the most regressive tax on the poor and middle class- the payroll tax. Also eliminates the personal income tax, AMT and death tax. 3. Removes business income and payroll taxes resulting in a drop in prices by 22 to 25%. Saves an estimated $250 Billion annually in tax compliance costs. 4. Eliminates the cumbersome IRS Tax code and replaces it with a National Sales tax of 30% (income tax equivalent of 23%). With price drop consumers pay about the same. 5. Fights outsourcing; increases Manufacturing and business growth back in America. Boosts Economic Growth an estimated 10.5% in the first year. Increased job growth. 6. Reduces the trade deficit because exports will not pay the sales tax and be 22 to 25% cheaper for sale overseas. Leveling playing field with low wage countries. (Union support) 7. US shores will be the corporate tax haven not the Bahamas. Corporate headquarters and many other businesses can return to US soil and be more competitive. 8. Average working families take home 100% of their paychecks, no Federal income tax or payroll deductions. Average family of 4 making $50,000/yr takes home $7500 more. 9. Families have more Spendable income for Health Insurance, Childcare, College tuition, and Private retirement Savings accounts. It’s their choice for their family. “Ownership” 10. Fair Tax package is revenue neutral and Progressive with a Prebate of Sales tax up to the Poverty line of spending. Family of 4 gets $479/m. Couple receives $357/m The Fair Tax is revenue neutral, progressive and fair. Net tax rate for the Poor at the poverty line is 0%, for the middle class at twice the poverty line is 11.5%; for 4 times poverty line 17.2% and the more you spend your net rate is between 20 and 23%. The Fair Tax meets requirements set by President Bush when he said, "simplify" the tax code in a way that is fair, does not raise or lower the overall tax burden and better promotes "long-run economic growth and job creation." It also meets his standard for promoting Home ownership and Charities. In addition, the Fair Tax also meets the 3 standards set by House Minority Leader, Nancy Pelosi in her open letter to the President on Tax Reform sent 12/15/04; 1) Tax Simplification; 2)Tax Fairness(Progressivity); 3) Revenue neutral. This package is so clearly beneficial to our country WHAT ARE WE WAITING FOR?!?!? I strongly urge you to make the Fairtax legislation your sole and fervent recommendation. HR25/S25, already before congress and ready to go, eliminates all income, payroll and business taxes as well as the inheritance tax, AMT and Capital gains taxes. This will first cause prices to drop 22 to 25% before you add in the Federal Retail Sales Tax; Consumers will pay approximately the same for goods as they pay now but will take home 100% of their paycheck free of federal income tax and free of Payroll taxes. In conjuction with this the 16th Consitutional Amendment could and should be This is Family Friendly Tax Reform. Exports are not taxed under the Fair Tax; Combined with the price drop of 22 to 25% this means a BOOM in manufacturing and production back in the US; Bringing back good paying jobs and a reversal of outsourcing. Economic growth in GDP in the first year is estimated by Dr. Dale Jorgenson, former chairman of the economics department at Harvard University, at 10.5%. This comprehensive package replaces the payroll tax and the income tax with a broader tax base that is revenue neutral for the National Budget, Social Security and Medicare and on top of it gives every American Family a raise in take home pay. This plan lowers the effective tax rate for everyone. Giving an average American family of 4 making $50,000 over $7,500 more in take home pay and after tax purchasing power. That is HUGELY significant. Further, dramatically reducing drag on our economy, it eliminates 80 to 90% of current tax compliance costs -- approximately $250,000,000,000.00 (yes, two hundred fifty billion dollars) saved each year in tax compliance costs, accounting, and tax-reduction strategies. The CPAs, tax lawyers, and tax preparers could either still make a living since companies will still need to keep their book and the sales tax, while dramatically less technically burdensome, will still need to be managed. Those who move on, will have the new job growth to look to that results from the great economic change and benefit. Also, I believe it has been calculated that the $250 billion dollars in tax compliance costs saved each year by this tax reform would be enough to fully fund the estimated $2 trillion "cost" of the transition from the Social Security system we have to the one we should have, in just eight years! The benefits are unbelievably far reaching and eliminate virtually all the detriments of our current system. In a simple, no extra effort or cost way, even undocumented aliens will be paying tax. Tom Wright of FairTax.org summarizes some benefits this way: "By removing the embedded cost of the income tax system, American-made goods are more affordable at home and more competitive overseas. This brings good jobs back to our shores as well as keeping those we have here." This plan is in everyway in the best interest of the US -- good for the government and budgeting, business and jobs, and the people overall. I used to think that a flat tax was a fairly decent idea, and have thought that simplification of our tax code and removal of loopholes was a serious need, but the more I look at the Fairtax plan, the more I am convinced we have found a brilliant and near perfect solution with it in it's clear proposal on simply eliminating our current tax code altogether and replacing it with a consumption/sales tax. The Fair Tax meets all the guidelines set down by President Bush for his tax reform panel including promoting home ownership and supporting charities. In addition, the Fair Tax also meets the 3 standards set by House Minority Leader, Nancy Pelosi in her open letter to the President on Tax Reform sent 12/15/04; 1) Tax Simplification; 2)Tax Fairness(Progressivity); 3) Revenue neutral.This is so clearly beneficial to our country WHAT ARE WE WAITING FOR?!?!? I strongly urge you to make the Fairtax legislation your sole and fervent recommendation. We have the answer right before us. What are we waiting for? Sincerely, Patrick B. Gibbons IV 3514 Harvard Ave. Dallas, TX 75205 214-526-3778 pbgiv@swbell.net |