For those who have not heard of The FairTax, I suggest you log onto fairtax.org and study the website. It is the most radically proposed change in the tax structure in our life time. When it is eventually implemented and becomes law, it will reduce our current 60,0000 page tax code to a 150 page manual. It will totally transform our treasury department, making April 15th just another day. It will also deem the IRS obsolete. The beauty of the proposal is that it was created and drafted by some of our nations leading economists and endorsed by many more. What this means is that our self serving politicians had no input, therefore, lending much more credence to its relative theme.
In short, the Fair Tax Amendment proposes the elimination of all taxes including but not limited to income, FICA, corporate, capital gains, inheritance and death. I’ll take a wild guess at you next question. How will the federal government support all of its current programs? Very easily. Those unfair, unequal, discriminatory taxes will simply be replaced by a national consumer’s tax of 23%, which will be paid by all (not just a few) for goods and services with the exception of food and drugs. Your next question may be. Don’t you think 23% is a little steep? Not really, most products purchased by the consumer have an existing embedded tax equal to or greater than what has been proposed. In theory, if all of the businesses that touch those products prior to it being purchased off the shelf, have no tax liability, the free market will adjust those retail prices accordingly. This does not even take into account that if our wages were not taxed, our take-home pay would be much greater, providing us with more disposable income.
Another frequently stated concern refers to the low income families that currently have little or no tax liability with our current system. Worry not. The proposal addresses that issue in length. The low income families that have minimal tax liabilities will not be injured. Those families will receive a monthly subsidy (from the federal government) that will be sufficient enough to pay their consumer’s tax.
Now lets take a few minutes to digest why this amendment is called the Fair Tax. Does the criminal element in this country pay their fair share of taxes? Does a narcotics smuggler file a 1040 each year declaring the millions of dollars he/she made in cocaine sales during the year? Do the elite, corporate investors, who shelter most of their income offshore, pay their proportionate share of taxes? Do the self employed people declare all that they should when filing their returns? Do the immigrants who migrate to this country for the sole purpose of opening a business pay their fair share during their first seven (7) years in business? How many of those immigrants continue to be the owner of record when their amnesty period ends? Also, how many of those immigrants transfer those businesses to a newly arrived family member for the start of another seven (7) year period? How many foreign business people travel into this country to do business and create revenue that is taken back to their homeland? How many illegal aliens are working here but taking American dollars back home? I will only ask one more question. What do all of these groups just mentioned have in common? You nailed it. They are all consumers of goods and services in this country and guess what, they will pay the same percentage that you and I will. We won’t care any longer that these groups are not taxed on their income because we won’t be either.
This information just provided barely scratches the surface of the total proposal. Again, refer to the website and study it at your leisure. I think most people will come to the same conclusion. Everyone living, visiting and/or doing business in this country will not have to worry about paying top dollars to research and discover loopholes prior to April 15th of each year because, there will be no loopholes and April 15th will just be another day.