Posted: Apr 21, 2005 By: John McDaniel

Comment: To the Tax Reform Panel,

I, along with 80-90% of my fellow Americans, want the Fair Tax, HR 25 as a
replacement for our current tax system.

Sincerely Yours,

John Paul McDaniel

4932 Oak Bluff

Mesquite, Texas 75150-3193

972-226-5798

50 Reasons I Support the FairTax
(How many reasons can you give for supporting the present obsolete IRS &
income tax system?)

Those Who Know the Facts Love the Fair Tax
"Family Friendly Tax Reform"
Tax Reform with far less pain and much more gain!
Out with the Old Code and in with the New
www.fairtax.org

1. It allows you to keep 100% of your paycheck, with nothing withheld for
Social Security and Medicare payments.
2. It eliminates the regressive payroll tax that hurts the poor. Currently,
every one of us is taxed a minimum of 7.65% on our first-dollar of wages up
to $90,000, if we earn that much.
3. It assures that the wealthiest Americans will be voluntarily helping to
fund social security with every last dollar they spend above the poverty
level. Today, earnings are subject to payroll taxes only up to $90,00 0. The
wealthiest Americans therefore do not pay into the system above that amount.
If their earnings are from investments, no earnings fund the Social Security
system. Under the FairTax, a single purchase (regardless of the source of
the earnings) can result in greater contributions to the Social Security
system than would be paid by an individual under the payroll tax of today.
4. It provides funding for Social Security and Medicare at a level equal to
or greater than at present, with a stronger and broader tax base.
5. It secures the future of Social Security and Medicare because all
spenders fund it and not just the workers.
6. It eliminates all personal income taxes, payroll taxes, corporate income
taxes, gift taxes, death taxes, and capital gains taxes.
7. It eliminates the income tax and the IRS. Members of Congress and the
public overwhelmingly agree that the current internal revenue code is
cumbersome, intrusive, coercive, and inefficient.
8. It is reve nue neutral with the present income tax system, funding the
federal budget at current levels.
9. It will remove an average of 22% of the cost of American made goods by
removing the built-in payroll tax (the other 7.65% of earnings that
employers pay) and other business taxes that are now passed to consumers as
an "embedded" tax of approximately 22% due to the cascading of income and
payroll taxes paid by U.S. employers, at every step of production, to the
U.S. Treasury.
10. It doesn't tax used items - clothes, cars, homes. Only new items are
taxed when sold by a business to an individual.
11. It is progressive, a "prebate" of the tax amount up to the poverty level
is given to everyone. This means that those spending below the poverty level
have a net gain because the "prebate" exceeds the amount paid in taxes.
(Under the present system they pay the payroll tax even if they get a full
refund of income tax withheld.)

12. It eliminates 90% of the cost of complia nce. American families and
American businesses waste an estimated $250 - $600 billion per year doing
the paperwork necessary to comply with the tax code. That is roughly $1,000
- $2,000 annually for every man, woman and child in the U.S.
13. It creates an opportunity for our products to leave this country costing
an average of 25% less, thus increasing our exports, lower our deficit
balance of trade, and increasing employment at home.
14. It encourages investment in companies located in the U.S., thus
providing a home for money already in the US and attracting more. The U.S.
will be the most attractive tax-free haven in the world for doing business.
American companies will return from offshore and overseas.
15. It encourages repatriation to the U.S. of money held by U.S. individuals
and companies now in foreign countries, with no tax consequence.
16. All 290 million Americans and 51 million visiting tourists fund Social
Security and Medicare with their purchases. Today only 110 million workers
fund these programs via deductions from their paychecks.
17. The broader tax base includes the ten percent of our economy, an
estimated $1 trillion, that today is underground or under the table. Under
the FairTax, the illegal drug dealer will pay his tax just like the rest of
us when he buys his sunglasses, BMW, and other items, as will those who do
business for cash.
18. It allows families to save more for home ownership, education, and
retirement. An average family making $50,000 will have $7,500 more spendable
income.
19. It makes educational tuition a tax-free expenditure of tax-free income.
20. It makes American products more competitive overseas by removing the
embedded tax from them, thus lowering their prices, which compensates for
low foreign wages.
21. It makes American products more competitive at home by removing the
embedded tax from them, compensating for the low cost of imported products
not burdened by taxes impose d by exporting countries.
22. It removes the need for formal 401-K's, IRAs, HSA, etc. Anyone will be
able to set up any kind of savings or investment account without regard to
taxes or the government.
23. It frees churches and other non-profit organizations from the expense of
filing tax returns and paying their half of Social Security and Medicare
payments for employees. There will no longer be any 501.c.3 or 501.c.4
non-profit tax status, because there will be no more tax to be exempt from.
24. It restores to churches and non-profit organizations the 1st Amendment
right to engage in free speech, without fear of losing their tax-free
status.
25. It gives individuals and businesses the right to donate as much as they
want to in a given year to charitable causes.
26. It restores the 4th Amendment, protecting against unreasonable searches
and seizures, from which the IRS presently is exempt.
27. It restores the 5th Amendment, which guarantees the right to du e
process. Under current systems the IRS has their own courts with their own
set of rules not included in the 5th.
28. It cleans up a major flaw in campaign financing, eliminating campaign
donations for "tax favors".
29. It eliminates wrangling in Congress over tax cuts, the tax code, and who
is or is not paying a fair share of the tax bill.
30. It encourages work by letting workers keep 100% of their earnings and
giving a rebate, to boot, making the notion that the more you work, the more
money you have, a reality, unlike the current system where welfare is lost
when you go to work, so your first dollars earned after taxes just offset
what you were currently getting in welfare, making you no better off.
31. It allows more of the lower income families to become home owners by
allowing a second job income above their current income (all tax free) to be
applied to a mortgage. Money for down payments for homes is also saved
totally tax free so that it will accumul ate faster.
32. It allows families to retain farms and businesses in the hands of those
who built them through the elimination of the death tax.
33. It allows families to help each other out tax-free, by eliminating the
gift tax.
34. It encourages individuals to self-insure, making the health system more
direct pay (no 3rd party pay), thus bringing costs down.
35. Without FICA to pay, most states, counties, municipalities, and school
districts will see a large increase in their state budget revenues,
additionally lowering the overall tax burden (State & Federal) for most
Americans.
36. It assures that no American will find, at the end of the year, a need to
get a loan to pay taxes as an alternative to penalties, interest, or
cheating.
37. It restores individual privacy. The government no longer needs to know
where you work, what you are earning, and what you are doing with it.
38. It eliminates the need to have a "marriage" clarification declaring who
you live with, as that has no bearing at all on a state or federal sales
tax.
39. It eliminates the need for courts to decide which divorced parent gets
to take the tax deduction for children.
40. It reduces production costs for farmers and other subsidized businesses,
leading to a reduction in subsidies, thus reducing the federal budget.
41. It eliminates the administrative costs incurred by states in collection
of state sales taxes because states will piggyback the state tax collection
onto the national tax collection, for which they are compensated by the
FairTax 1/4% administrative cost give-back. [Doesn't this go to the
retailers?]
42. It results in a windfall profit for many of those holding taxable
corporate high interest bonds at the time of passage of FairTax, since they
will not be taxed under FairTax. (A higher interest rate is usually paid to
entice investors to buy the corporate bonds rather than go with the lower
interest, but tax free, municipal bond s, now.)
43. It shifts the tax to consumption, which consumption tables over time
show is more stable than income, therefore the tax revenue stream is likely
to be a more stable and predictable amount.
44. It results in Federal Reserve rates being based on current consumption,
which is rather stable, instead of future earnings, which are less
predictable, resulting in surer inflation prevention.
45. It allows for better planning by businesses, because they no longer have
to consider tax implications for everything they do.
46. It makes higher employment or better compensation possible in the small
business sector where today it costs approximately three dollars in
compliance costs to pay one dollar in payroll and income taxes.
47. It moves many now providing tax preparation, advice, accounting,
planning, and records maintenance into an expansive economy where they will
be producing goods and services. There they can add to the standard of
living of all Americans a nd likely earn more than they do currently,
instead of shuffling paper for the government (and not contributing anything
economically to society).
48. It relieves citizens of the risk of facing the shift in burden of proof
that is so common with the current system, i.e., the taxpayer is guilty
unless innocence can be proved, when even IRS staff sometimes give
conflicting interpretations.
49. It's simple, unambiguous, and certain, the opposite of the current tax
code.
50. It's good for the environment. It reportedly would save about 300,000
trees a year that are needed to produce the paper for the IRS compliance and
tax forms, enough to reach around the equator placed end to end 28 times.
Also, since it taxes only new items, it would encourage buying tax-free
pre-owned cars, clothes, furniture, houses, etc. Reuse is good for the
environment, too.


Best Regards,
John Paul McDaniel

Go to: www.fairtax.org

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