Posted: May 21, 2005 By: Betty Malone

Subject: common sense taxation

Comment: Completing Income Tax returns costs more than 6 billion man-hours & $700 billion for “consultants”! The tax code is so complicated it cannot be fairly administered or confidently complied with, but can be used to “punish” political opponents. Everyone, including minimum wage earners, pays more than 20% in federal taxes, built into the things we buy.

The Fair Tax is naturally “progressive,” since a monthly “prebate” (compensating households for the NRST on necessities) will cover the full amount of the Fair Tax paid, up to almost $19,000 per year in spending. Only those spending more than $250,000 per year will pay the maximum 23% rate.

The Fair Tax expands the tax base by a third, making “tax cheats,” criminals & illegal aliens tax PAYERS for once. It won’t even bother them, because the net prices of things will be essentially the same. Conversion costs are “zip,” because retailers in almost all states already collect sales taxes. Company income taxes will end, as will "contributions" to Social Security & Medicare.

The IRS will be reduced to auditing collections by the states. There are no “loopholes” for people to exploit, to avoid paying the Fair Tax.

By funding all of Uncle Sam’s operations, the Fair Tax will disconnect Social Security & Medicare from the number of people in the workforce, dramatically improving the actuarial validity of those schemes. Since used goods will be untaxed, payment of the Fair Tax will be voluntary. It will also be obvious to everyone how much Uncle Sam is costing them.

The end of withholding will grow paychecks by “half,” so spending – sales, production & employment – will increase. But savings will be with untaxed income & will grow untaxed, so there will be more incentive to save & savings will increase too. Eliminating the 20-some percent federal tax component in the things we produce will boost exports, reversing our balance of payments & the flow of production lines & jobs overseas.

The Fair Tax is a "win=win" deal. Uncle Sam gets steady income & a better reputation, taxation is more efficient & FAIR, for once!