Our tax system is a mess. Radical surgery is the only answer. The Fair Tax Act by congressman John Linder, House and Senate bill number 25 needs to be brought up for a vote. In a vote in Georgia where the people are educated on the bill it was overwhelmingly approved with over 75% of the vote. The only ones to fear this bill are the lobbyists and our elected officials as they will lose power to the people. Space doesn't allow for a detailed explanation of the FTA so buy the book. It is not a tax cut, but tax neutral. What the act simply does is eliminate all taxes and replace them with an embedded national sales tax. The price of all goods would on average stay at current prices but instead of our unweildly tax collection system from individuals and corporations the store owner would send in the taxes. An interesting point is that 15 out of the last 16 quarter would have resulted in more taxes being gathered with this method. A family of 4 with the wage earner making, say $600 a week, (any amount could be inserted) would take home his/her paywith no federal taxes, FICA, taken out of the check. Only applicable local taxes would be taken out. To answer the question of how it affects the lower wage earner, they would not only get their whole paycheck but would get a rebate on taxes that were embedded, up to the poverty level of $25,000, which amounts to $480 @ month. This lets every American decide what he/she wants to do with their money. It also makes the USA an international tax haven since there would be no federal taxes on goods produced. This creates jobs instead of exporting jobs. This helps our trade deficit become a surplus again. Another good point is that money not spent would be invested or saved which would also creat even more jobs. More jobs equals more money for hard working Americans to spend creating even more revenue for Washington. This needs to be the main platform for the next conservative candidate for President. This rehaul of the tax system is not that hard, the mechanism is in place as we speak. We just need to collect it differently. Please buy the book and read it carefully. These fact are the result of Harvard & MIT professors with no axe to grind. Comments or questions are welcomed. Google the Fair Tax Act for even more info. Thanks, Bassboat
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This bill doesn't realy include a way for our government to transition from an income-tax based economy to a "fair-tax" base. Also, I personally believe that luxury goods should be charged with a thirty percent tax. This is not out of a sense of fairness or desire to vindicate the poor for years of manipulation by the weathly but simply because I believe our government will ened the revenue and if you can afford to buy a yacht, you can afford to support our government.
Hvance
A national sales tax is counter productive. Poor people will pay a larger percentage of disposable income to support infrastructure than middle and upper class. The cost of goods would rise proportionately. I think a better idea is a flat tax with no deductions. If every citizen paid 15% of income over 40K it would be fairer for low wage earners and high wage earners would pay a fair share.I agree that a flat income tax would be the best way to go. However, I don't think there should be a bottom limit (like the $40,000 you propose). I think everyone benefits from the Government and all should help support it. (Remember, 15% of $20,000 is only $3,000 - not too much to ask someone to pay.)
If the flat tax has no deductible amounts, it would be easy to have tax removed from all income and sent to the Government. (Employers, banks, stock brokers, savings & loan organizations, etc. would simply send directly to the Government 15% of the income you would otherwise receive from salary, interest, and dividends. At the end of the year, those same organizations would send you an account of your total income and the amount of such income already paid to the Government.) The Government would then have a steady, dependable stream of income. And at tax time, most people (except the self employed) would owe nothing - they could just check a few boxes and submit their statements.
Tax accountants are now in demand (because of the Sarbanes-Oxley Act) and those who had been tax accountants for individual taxpayers could find jobs as internal auditors for corporations.
I agree that a national sales tax falls harder on the poor. Everyone needs food, shelter, warmth in winter, transportation, etc. For the poor, this consumes the vast amount of their income and would all be taxed. For the wealthy who do not need to spend all their wealth on the above, but who can save for future, a much smaller amount of their income would be taxed - and they could determine what portion. (Only income that goes directly to savings is not taxed under the national sales tax.)
I believe that the national sales tax is unfair because the wealthy benefit more from our Government than the poor. The major expenses of the Government are the military and social security.
For social security, those who had larger incomes during their working years (which generally corresponds to the wealthy) receive more benefits than those who did not. (Remember there is a cap on the amount one pays to social security - at least there was 25 years ago when I was under that system - and the wealthy stop having amounts taken out of their salaries long before the end of the year.)
The wealthy also benefit more from military spending. Because the wealthy have more to lose, the wealthy have a greater interest in maintaining our current style of government. The poor would lose very little if we became a socialist or true communist state.
I think history has shown that the most stable governments are those with a large middle class, and a small upper and lower class. Whichever system of tax we go wtih should encourage this structure.
Tax simplification reform should be a plank of the platform. That said, it is too early to pick out the proper form this should take. It is enough that canidates are looking for methods to simplify tax policy and voting accordingly. I personally like a European style VAT which is a cousin of the national sales tax, but any tax which simplifies the current system will make for a better government for the long term.
Tax Platform:
-Taxes policy should be designed to simpify the tax system and minimize loopholes available to those with expert tax representation.
-Tax policy should be progressive: the responsiblity of funding government should fall on those who benifit from the properity of our nation.
-Radical tax reforms should be seriously considered, this includes but is not limited to: flat taxes, sales taxes, VATs and the elimination of income taxes.
-The IRS must be efficient, fair and independent.
The Fair Tax plan should be a Plank of any succesful 3rd party. Although we should note that this only a partial solution. The real problem is FEDERAL SPENDING.
Ron Paul...The only option for the American way of life.
Ron Paul is the only hope we have to take our country back. He is the only one with sound ideas for cutting spending and reducing the government down to it's rightfull and Constitutional size. His message of Liberty, Peace and Prosperity is the one that resonates with the People. He is the one striking fear in the statists. There are thousands of Americans who are volunteering their time and money to get the word out about Ron Paul and to let the People know that he is not only our best hope but our only hope.
A flat tax or fair tax, all have merit. In the end, though, we, the people, must regain our sovereignty by overall reducing the individual tax rate to no more than 10 percent of net income and reauthorize state apportionment as a way to institute structural accountability in government spending. Without structural accountability on spending, lobbyists, special interest and even our own electoral system will always act to force ever higher levels of irresponsible government spending.
ex animo
davidfarrar