Urges Support Of A Fair Tax
To The Editor:
When challenges or problems take place in Washington, the normal response is "We must do something!" Typically, Washington's response is a combination of raising taxes and spending more money. Lets face it, currently the trillions of dollars we are spending is primarily made up of pork barrel and welfare.
There is a proposal that would fix many of the problems we face with no additional government spending. It is called the Fair Tax. The Fair Tax eliminates all taxes on income of any kind. No more personal or corporate income tax. No capital gains, dividend, estate or gift tax. No alternative minimum tax. No payroll tax. All would be replaced with a national sales tax. Instead of giving the government 33 cents out of every dollar you earn, you will give the government 23 cents out of every dollar you spend. The proposal will raise the same revenue as the current code, but you will choose when to pay taxes and how much to pay by how you choose to spend.
Just think, eliminating withholding taxes would give the average income earner an immediate 50 percent increase in takehome pay. How's that for a spending stimulus?
Perhaps now we should consider a Fair Tax before we commit additional trillions of dollars in debt on our future generations.
1. A Harvard professor's study showed that, on average, 22 cents out of every dollar we spend is paying the income taxes, payroll taxes, accountants, attorneys and the IRS in every product and service we purchase.
2. A Tax Foundation study says that we will spend $350 billion simply to comply with the federal income tax regulations in 2009. Americans spend billions each year calculating the tax implications of business decisions. That is inefficient and just plain stupid. Eliminating this would give us the equivalent of a $4 trillion tax cut over 10 years without any impact on the budget. Accountants, lawyers and IRS staff could redirect their skills into more productive responsibilities in the marketplace.
3. It is estimated that because of the complicated tax code, the underground economy is avoiding more than $2 trillion in taxes. Under the Fair Tax, these dollars would be taxed every time they buy a loaf of bread.
4. Offshore financial centers control more than $13 trillion in available finds. These centers are looking for opportunities to get into our markets. Much of that money represents corporate profits from foreign sales that - because they will be taxed at 35 percent if repatriated - they invest these profits offshore. Under the Fair Tax we will be the world's largest and most stable tax haven. That increase in liquidity would make what we have done - and will do - with taxpayers funds look trifling.
If we are serious about getting more cash into our system and leaving more money in the pockets of workers to spend, we should look seriously at fixing a broken tax system that even Jimmy Carter called a disgrace. Yes, there are some concerns and issues associated with this new system, but if developed with the logic of our original founders, we can improve a failed system.
If our goal is to just spend trillions of dollars on new entitlements and burdening future generations with increased taxes and a diminished standard of living, then our current policies are the right prescription. If our goal is to free American markets and the American entrepreneur to innovate, we should encourage our representatives to support a Fair Tax. If this makes sense, write or call your representative today and tell them you want a Fair Tax.
Mike Crampton, McConnellsburg, Pa.