Posted: Apr 29, 2005 By: Stephen F. Speer

Subject: Fair Tax - HR25 & S25

Comment: This letter from another citizen says it all!

I would like to take a few moments of your time to express my frustration with our current tax code, and to express my support of the Fair Tax proposal that is in front your panel.

I am sure you are sick of hearing about the 60,000 pages of IRS rules and regulations.
I am sure you are sick of hearing about the IRS abusing their power.
I am sure you are sick of hearing about the rich getting tax breaks, and the poor not paying anything, and the rich paying too much, etc. etc.

I am sure you are sick of filing your own tax returns, and paying a part of the $260 billion that Americans fork over to comply with the 60,000 pages of garbage that make up our IRS.

I am sure you are sick of hearing about the IRS “helpline” only being correct about 50% of the time. Repealing the 16th amendment, and streamlining the IRS to a “collection” agency for this Fair Tax, will bring shouts of joy. Not only will it bring shouts of joy from people in the USA, but also from the many companies that have moved out of the USA because of our current tax system. You don’t think they will come running back to our country, and bring with them all of the jobs that left with the company??

I have, over the last year or so, been hearing about this Fair Tax proposal on the floor of the House and Senate. I have, over the last 5 or 6 months, started to get actively involved in spreading the word about it as well.

What I do NOT see with the Fair Tax proposal, is a down side. I have heard the argument that it is regressive. Baloney!! Put more money in people’s pockets, and it will spur economic growth. The poor cannot complain (even though they will anyway), as it gives them the sales tax back on the essentials every month. The rich are going to pay more than the middle class, as the rich will buy steak, and the middle class will buy hamburger. The rich will buy Cadilacs, and the middle class will buy Fords and Chevys. The rich will have me build them a large fancy home, the middle class will have me build them a middle class home.

The drug dealers, pimps, and tax evaders will now pay some taxes. Right now, it takes one person, the tax filer, to cheat on paying taxes. With the Fair Tax, it will take 2: the consumer, and the person behind the cash register. Every merchant collects sales taxes, so it will be an easy transition.

Market competition will ensure that the 20-30% “embedded” tax that is in the price of every product I buy, will disappear, and be replaced with a 23% “visible” tax. You don’t think that American companies like Boeing, Ford, GM, and the likes, could be globally competitive if they were able to reduce their costs by 20%??? You think they might be able to hire more workers?? Not only because of the cost savings the Fair Tax would bring, but also because they HAVE to hire more people to fill the orders they will receive because of their newfound competitiveness in the global market.

I firmly believe that, as tax cuts have repeatedly shown, when you give more take home money to people, the economy prospers. Studies have shown that a sales tax is a much more stable tax than income taxes, which would help us tremendously in our efforts to make sure that all of our current government programs (some I support, a lot of them I don’t support), including Social Security and Medicare are funded. Not only for now, but for future generations.

When talking to people about the Fair Tax, the statement that always comes up, and is probably the biggest hurdle we need to overcome to enact the Fair Tax, is this: The Fair Tax makes way too much sense!!!!

I saw that the President, whom I supported in both elections, has asked that the Mortgage Interest Deduction and the Charitable contribution deduction be left intact. As a Realtor, I think that it is easy to dispute his reasons for keeping those intact: When there is no income tax, you need no deductions!!! There is more money in their pockets, which gives them more money to spend on house payments, and of course charitable giving. I can assure you that when I have money in the bank and things are going well, I am more generous than when I am wondering and worrying about paying the bills. I bet if you looked at charitable giving from the first of the year to around April 15th, you’ll see that there is probably a drastic dropoff, compared to the rest of the year. People are worried about how much they owe, or worried about getting their taxes done, or worried about getting audited. When people are stressed and worried, they don’t give, they aren’t as productive, and they aren’t going to spend money and spur the economy.

Again, as a Realtor, make sure you don’t throw me in with what our uninformed lobby group (NAR, National Assoc of Realtors) has to say about the Fair Tax, which would not have ANY loopholes. If a single person is making $15 per hour, grossing $600 per week, but only bring home $400-450, they would have an extra $150-200 per week to make up for the “deduction” of an interest payment. An person making that kind of wage, is probably going to be spending around 600 per month for a house payment, which for the early years of their mortgage would have them paying around $6000 per year in interest. Instead of paying income tax on the $31,200 per year income, they would pay it on $25,200 in income. The first $7150 would be taxed at 10%. The other 18050 would be taxed at 15%. The $6000 they used as a deduction, times 15%, would save them $900 per year in income taxes. Compare that to the $7800 more that they would bring home under the Fair Tax plan. If our Realtor group had any sense, they would see that this person could probably buy a much more expensive home with the Fair Tax in place, even without the deduction of the mortgage interest.

I am sure you have seen the many letters of recommendation from the economists across the nation for the Fair Tax. I have yet to have anyone tell me how it could negatively affect our economy. All they have to say is the indoctrinated lines that they have been hearing from the naysayers, “it will tax those who can least afford it” blah, blah, blah. I am a part of the middle class that these folks say can least afford it, and I am all behind the Fair Tax. As a matter of fact, I wouldn’t care if it cost me a little more per year when all is said and done. I firmly believe that I should pay taxes based on consumption. If I consume more than the next guy, I should pay more. I also don’t think that a guy that has worked his tail off to make himself rich, should have to pay a disproportionate share of taxes, like he does now. With the consumption tax, he will pay more, but only because he consumes more.

I thank you for your time. I realize that your job is not an easy one. But please, take into consideration what is best for this country. You know as well as I do that the naysayers and doomsdayers always squeal the loudest, afraid that their gravy train will be derailed. For once, like what happened in our last election, I would like for you to listen to the silent majority and adopt, or at least recommend to the President to support, the Fair Tax. I have not seen any polls that have shown anything but overwhelming support for a national retail sales tax over the income tax. Please listen to the cry for change that is coming from America!!!