Editor’s note: This is the eighth and last in a series of commentaries in support of the Fair Tax.
By PAUL LIVINGSTON
All government policy, including taxes, hurts some and helps others. Winners and losers are chosen. Class warfare is applied. Politicians, lobbyists and special interests play the tax system to their advantage.
Real true tax reform could eliminate direct taxation, a tyrannical taxing system, and re-establish the original Constitution with the repeal of the 16th Amendment. Gone would be the income tax and payroll taxes, regressive taxes on jobs. Tax reform could eliminate hidden/embedded taxes of some $.22 per dollar and release businesses from a complex tax system that drives up prices of USA goods and services and drives out jobs, companies and capital from our country.
The tax base could be moved from income, saving and investments to a larger and more stable tax base on consumption. The underground economy, estimated to be over one trillion dollars, could be taxed. Families with Social Security numbers could be untaxed up to poverty level spending. Everyone would benefit with new job opportunities from an expanding economy and from tax relief.
All Americans would be helped with tax reform that follows the five tax reform principles of fairness, easy to understand, transparent, supports economic growth and is revenue neutral (same tax amount collected as the replaced taxes).
The solution moves the tax base from income, savings and investments to a tax base on consumption. One tax, a progressive sales/consumer tax system on all new goods and services. The solution is called the Fair Tax, bill HR25/S122.
The Fair Tax solution can be a unifier to bring all citizens and political parties together as there is much to like for everyone. The Fair Tax is a progressive system. The more you spend, the more tax you pay and at an increasing rate up to 23 percent. With the monthly tax refund, a negative tax rate is possible until your spending exceeds the poverty level amount as now annually determined by the Department of Health and Human Services.
Think of the Fair Tax as a progressive tax on the standard of living that you can afford. You now have freedom over how much tax you pay by controlling your spending on new goods and services.
Who opposes the FairTax policy? Tax lobbyists and Washington, D.C., has 17,500 registered tax lobbyists. Thus they out number the 537 elected officials by 32-to-1. Lobbying pays off by buying tax favors to game the tax code to get tax favors of many more dollars than the lobbying expenses. Plus, lobbying is a lucrative position for politicians when they are out of office. They no longer have the power but the pay is still real nice.
The IRS department will not be needed after the transition period. Some people will be employed by the Treasury Department to over see tax collections from the states and by Social Security to manage the tax refund, called a prebate, as issued the first of each month. Gone are $450 billion spent annually to comply with the present federal tax code.
Some politicians oppose the FairTax because they like the power to use the present tax system to their advantage. The need for tax lawyers will also decline. On the other hand, CPAs generally do not like tax work as the code has become contradictory and more difficult to understand. This leads to no correct answer and increased litigation liability.
Some voters like politicians having the power to redistribute wealth by taking from some and giving to others. Others believe that politicians are better at managing our economy than the free market system.
Grassroots support from loud and clear voices is needed to get the Fair Tax bill passed. As of March 13th, 63 representatives and eight senators are supporting the Fair Tax. Learn more, get involved and visit www.fairtax.org. Please contact your U.S. representative and two senators. Ask them to co-sponsor the Fair Tax bill, HR 25/S122.
Paul Livingston is a FairTax volunteer, district director and a resident of Jacksonville, Fla. Contact him at firstname.lastname@example.org.