The current administration made a point the other day regarding shifting their focus to jobs and the economy. Sometimes the best solutions to problems are right under your nose and you miss them. One that has apparently been missed is called ‘Fair Tax Act’.
The FairTax plan is a comprehensive proposal that replaces all federal income and payroll based taxes with an integrated approach including a progressive national retail sales tax, a prebate to ensure no American pays federal taxes on spending up to the poverty level, dollar-for-dollar federal revenue neutrality, and, through companion legislation, the repeal of the 16th Amendment.
The FairTax taxes us only on what we choose to spend on new goods or services, not on what we earn. You take home your entire paycheck. The FairTax is a fair, efficient, transparent, and intelligent solution to the frustration and inequity of our current tax system.
There are two versions of the Fair Tax Plan, one each in the House and the Senate. So it’s not like Congress is unaware. The are HR25 and S296. If you go to the Fair Tax website ( www.fairtax.org ) there is a calculator you can use to plug in your own numbers and prove that you would have more money to spend under this plan. In my case it would be about $15000 more per year. That’s a pretty hefty raise.
If it works for me, then it should work for a business. If it does, then the business can expand, hire more people, pay better wages, provide better benefits and generally prosper at a higher level, as can their employees. What’s not to like?
So why has this idea languished already for several years? Why has Congress refused to act on what appears to be a ‘lead pipe cinch’?
If that’s not enough, here’s another plus. The FairTax will, for the first time, tax undocumented workers who now evade U.S. income and payroll taxes. Under the FairTax, all persons living in the U.S. that spend any money will pay taxes, whether they are here legally or illegally. Where’s the downside on that?
Still not convinced? The FairTax rate of 23 percent on a total taxable consumption base of $11.244 trillion (from 2007) will generate $2.586 trillion dollars which is $358 billion more than the under the current system. And it gets better with time and the expanding economy. More people making more and spending more creates more revenue.
It’s a simple concept, easy to administer and economically friendly. Not to mention you’d never have to file another tax return. So, what are we waiting for? Write your Congressional representatives.
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