Comment: A Proposal for Tax Reform Submitted by: Neil R. Hayward, an individual living in Longwood, Florida I propose that the panel recommends a tax system as reflected in House Bill HR 25 and Senate Bill S 25, both of which propose a national retail sales tax to replace the current income-based tax system. The proposals, also known as the Fairtax Bills, eliminate all income-based taxes (income, social security, medicare, inheritance, and corporate taxes) and replace them with a single consumption-based tax, a national retail sales tax, set at an inclusive rate of 23%. Included is a monthly rebate, in advance, to all citizens, that equates to the sales tax on purchases made to meet the poverty level, thereby effectively eliminating all taxes on the poor This tax meets all of the panel’s criteria (simplicity, transparency, stability, fairness, economic growth and competitiveness, reduced compliance and administration costs) and, in addition, would encourage savings and investment, increase exports, and decrease imports. Additionally, providing, as it does, a tax base of all consumers, the Fairtax would provide such economic growth that the current Social Security financial crisis would disappear. A final bonus is that the IRS would essentially disappear. Finally, such a consumption-based tax would be levied on all consumers, thereby including those exempt under the current tax system, such as tourists, business visitors, illegal immigrants and members of the ‘underground economy, all of whom consume. |