Subject: About the Comment: Hello; I'd like to submit the following points about the proposed "FairTax Plan". BUSINESSES AND INDIVIDUALS WILL NO LONGER HAVE TO SPEND OVER $250 BILLION EACH YEAR IN COMPLIANCE COSTS. By not having to pay the costs of tax planning and filing, businesses will have more money to invest in expansion and modernization for global competitiveness. Individuals – wage earners – will be able to buy more, save more and invest more. THE FAIR TAX WILL BE A TREMENDOUS BOOST TO OUR ECONOMY! The cost of tax compliance and payroll taxes is built into the price of every good or service we currently purchase. Eliminating these costs will reduce production costs of U.S. products by an estimated 22%; therefore, prices will not go up. Foreign goods for sale in the U.S. will also be taxed, making American products 20% to 30% more competitive at home and abroad. Dr. Laurence Kotlikoff, chair of the economics department at Boston University, estimated that the move to a broad-based consumption tax would add a 7% to 14% increase in GDP. JOIN FAIRTAX AND BRING JOBS HOME. Our current income tax exports our jobs, rather than our products, but the FairTax allows U.S. exports to sell overseas for prices 22% lower, on average, than they do now – with similar profit margins. Lower prices sharply increase demand for U.S. exports, thereby increasing job creation in our country’s manufacturing sectors. America will be virtually the only country selling products abroad at prices that do not include a tax component in the price. As a result, multinational companies will flock to setup shop in the U.S. INTEREST RATES WILL FALL 25% to 35% UNDER FAIRTAX, FURTHER STIMULATING ECONOMIC GROWTH. Investors will no longer need to receive a “tax premium” to achieve a particular after-tax rate of return as interest income to investors will not be taxed. Today, tax- free municipal bonds command lower interest yields as no tax premium is included in the rate. In our FairTax tomorrow, all interest rates will command lower tax-free status. WAGE EARNERS/EMPLOYEES TAKE HOME 100% OF THEIR WAGES PLUS A “PREBATE” THAT UNTAXES ESSENTIAL-LIVING GOODS AND SERVICES. With the FairTax, there will be no Federal payroll deductions of any kind – no income tax, no Social Security tax, no Medicare tax and no self-employment tax. FairTax provisions will provide monthly “prebate” reimbursements on essential living expenses and prebate all taxes to those spending under the poverty line. Thank you for the opportunity to reply to your requested input. Sincerely; Ron Spears |