Wednesday, April 15, 2009

Tea Party

"The democracy will cease to exist when you take away from those who are willing to work to give to those who are not." ~Thomas Jefferson

I am not one for shouting my political beliefs to a sea of strangers via the world wide web... but I am a HUGE supporter of the Fair Tax.

In case you are not familiar with the idea of the Fair Tax, here's a thumbnail sketch from www.fairtax.org

Americans take home their whole paychecks.
Not only do more Americans have jobs, but they also take home 100 percent of their paychecks (except where state income taxes apply). No federal income taxes or payroll taxes are withheld from paychecks, pensions, or Social Security checks.

The prebate makes the FairTax progressive.

To ensure no American pays tax on necessities, the FairTax Plan provides a prepaid, monthly rebate (prebate) for every registered household to cover the consumption tax spent on necessities up to the federal poverty level. This, along with several other features, is how the FairTax completely untaxes the poor, lowers the tax burden on most, while making the overall rate progressive. However, the FairTax is progressive based on lifestyle/spending choices, rather than simply punishing those taxpayers who are successful. Do you see how much freer life is with the FairTax instead of the income tax?

No tax on used goods.

The amount you pay to fund the government is totally visible. With the FairTax you are only taxed once on any good or service. If you choose to buy used goods − used car, used home, used appliances − you do not pay the FairTax. If, as a business owner or farmer, you buy something for strictly business purposes (not for personal consumption), you pay no consumption tax. The FairTax is charged just as state sales taxes are today. When you decide what to buy and how much to spend, you see exactly how much you are contributing to the government with each purchase.

Retail prices no longer hide corporate taxes or compliance costs, which together drive up costs for those who can least afford to pay.

Did you know that income taxes and the cost of complying with them currently make up 20 percent or more of all retail prices? It’s true. According to Dr. Dale Jorgenson of Harvard University, hidden income taxes are passed on to the consumer in the form of higher prices for everything you buy. If competition does not allow prices to rise, corporations lower labor costs, again hurting those who can least afford to lose their jobs. Finally, if prices are as high as competition allows and labor costs are as low as practical, profits/dividends to shareholders are driven down, thereby hurting retirement savings for moms-and-pops and pension funds invested in Corporate America. With the FairTax, the sham of corporate taxation ends, competition drives prices down, more people in America have jobs, and retirement/pension funds see improved performance.

The income tax exports our jobs, rather than our products. The FairTax brings jobs home.

Most importantly, the FairTax does not burden U.S. exports the way the current income tax system does. The FairTax removes the cost of corporate taxes and compliance costs from the cost of U.S. exports, putting U.S. exports on a level playing field with foreign competitors. Lower prices sharply increase demand for U.S. exports, thereby increasing job creation in U.S. manufacturing sectors. At home, imports are subject to the same FairTax rate as domestically produced goods. Not only does the FairTax put U.S. products sold here on the same tax footing as foreign imports, but the dramatic lowering of compliance costs in comparison to other countries’ value-added taxes also gives U.S. products a definitive pricing advantage which foreign tax systems cannot match.

The FairTax strategy is revenue neutral: Neither raise nor lower taxes so consumer costs remain stable.

The FairTax pays for all current government operations, including Social Security and Medicare. Government revenues are more stable and predictable than with the federal income tax because consumption is a more constant revenue base than is income.
If you were in a 23-percent income tax bracket, the federal government would take $23 out of your paycheck for every $100 you made. With the FairTax, if the federal government gets $23 out of every $100 spent in America, the same total revenue is delivered to the federal government. This is revenue neutrality. So, instead of paycheck-earning Americans paying 7.65 percent of their paychecks in Social Security/Medicare payroll taxes, plus an average of 18 percent of their paychecks in federal income tax, for a total of about 25.65 percent, consumers in America pay only $23 out of every $100. Or about 30 percent at the cash register when they elect to spend on new goods or services for their own personal consumption. And this tax is collected only on spending above the federal poverty level, providing important progressivity.

Tax criminals don’t make criminals out of honest taxpayers.

Today, the IRS will admit to 16 percent noncompliance with the code. FairTax.org will be generous and simply take the position that this is likely a conservative estimate of the underground economy. However, this does not take into account the criminal/drug/porn economy, which equally conservative estimates put at one trillion dollars of untaxed activity. The FairTax does tax this -- criminals love to flash that cash at retail -- while continuing to provide the federal penalties so effective in bringing such miscreants to justice. The substantial decrease in points of compliance -- from every wage earner, investor, and retiree, down to only retailers -- also allows enforcement to concentrate on following the money to criminal activity, rather than making potential criminals out of every taxpayer struggling to decipher the current code.

Okay... I think that about sums it up (I'll step down from my soap box now).
To learn more about the Fair Tax, please educate yourself at www.fairtax.org

ps. the Fair Tax Book by Neil Boortz and John Linder is a WONDERFUL and enlightening read.

1 comment:

  1. Anne,

    You go girl!!! I agree with you 100% Thanks for visiting my blog! I like the Rabbit Hatching too!

    Linda

    PS Only 5 more weeks!!!!!

    ReplyDelete