Posted: Jun 10, 2005 By: Adam L. Yoder

Subject: The FairTax is the solution to our Nation's tax problem!

Comment: The FairTax is the best solution to solve our great Nation's tax problem. Shifting the burden of the taxpayer to a consumption tax would encourage people to invest and save, something that the President has been promoting for awhile now. This would ease the burden of social security welfare programs for responsible citizens and decrease total expenditures in this area.

As a business owner, I find it encouraging that taxes would stop being assessed on income and that I would not have tax to imbed into the price of my goods sold. Although I have no employees at this point, I would be more likely to hire as I grow because I would not have the headaches and expenses of withholding.

To allay fears that have been expressed by the panel and/ or critics before, I would like to point out the following:
-1. Studies have shown that the FairTax is revenue neutral. Tom Wright of Americans for Fair Taxation should have provided data to the panel to substantiate this claim.
-2. Implementation should be welcome to the states because it simplifies every citizens tax compliance responsibilities and the 1/4% "processing fee" that the state keeps for collecting the taxes can be considered a substantial revenue stream. (If they do not think it is significant, then I will be happy to have 1/4% of the total federal tax revenue of my state).
-3. There have also been concerns that the FairTax would create a large black market. While I share this concern, I am certain that it is no larger than the combination of drug traffic, illegal gaming income, unreported income, and tax evasion that we currently see in our system. Since all of these are currently tax free in effect, these offenders would still be taxed under the new FairTax system. Also, since the number of tax filers would drop by 90%, this would allow the collectors and enforcers of the new and improved tax code to police offenders more effectively (as everyone would not be viewed as a potential offender under the FairTax).
-4. Finally, there has been concern over the "fairness" of the FairTax because it taxes consumption. The tired argument is that the FairTax taxes those with the lowest incomes the most, proportionally speaking. Unfortunately, this is ploy by proponents of other systems to misrepresent the FairTax. The FairTax includes a provision for a "prebate" that would exempt taxes on necessary items by providing an allowance for the tax on those items before the purchaser would even have to make the purchase. This is entirely fair, yet it maintains that those who purchase items that are luxuries (alcohol, tobacco, cigarettes, lottery tickets, movie tickets, etc.) would be paying the tax for those items. Those who invest and save would not be penalized for choosing to do so and would be rewarding themselves and the country. But, most importantly, the choice is theirs, not someone elses!

Thank you for this opportunity to provide comments to the Panel! Best wishes as you continue to prepare your report for the President. Remember, the FairTax (HR25/ S25) is the best alternative for our country's future!