Subject: Comprehensive Tax Reform Comment: I. Comprehensive Tax Reform Proposal. • tax base = consumption • exemptions, deductions, credits and exclusions = none • tax rate(s) = 23% inclusive, 29.9% exclusive • distribution of the tax burden = no one pays tax on consumption up to the poverty level • treatment of charitable giving = not required since no income tax to compute • treatment of home ownership = not required since no income tax to compute • collection method(s) = States collect from retailers and pass on to U.S. Treasury • treatment of businesses = no business to business sales tax All these are encapsulated and fully documented in House Bill HR 25 and Senate Bill S25 II. Impact of Proposal Relative to Current System. • simplicity (including transparency and stability) = Consumption is more stable than Income, everyone consumes even if income changes or stops. • fairness = My neighbor cannot game the system and pay less tax than me for the same consumption • economic growth and competitiveness = Tax sheltered money and foreign investment will flock back to this country plus the cost of our exports will be cheaper due to no imbedded income tax. • compliance and administration costs = Compliance occurs at the retail cash register and administration is orders of magnitude smaller than the IRS bureaucracy All these are encapsulated and fully documented in House Bill HR 25 and Senate Bill S25 III. Transition, Tradeoffs and Special Issues • Estimate GDP will increase by 15% the first year • Amendment IV of the Bill of Rights will be returned to full standing and people’s privacy will be restored when the IRS is abolished All these are encapsulated and fully documented in House Bill HR 25 and Senate Bill S25 |