— First in a series of commentaries in support of the Fair Tax Bill.
By PAUL LIVINGSTON
We all know taxes are but what does tax reform mean? It means removing abuses, eliminating bad practices and change for the better.
According to the Wikipedia encyclopedia, “‘No taxation without representation’ is a slogan originating during the 1750s and 1760s that summarized a primary grievance of the British colonists in the Thirteen Colonies, which was one of the major causes of the American Revolution.”
Today our taxes are determined by elected representatives of the people but it seems as though those elected representatives do not conduct the nation’s taxation affairs (or its spending affairs) with the best interests of their constituents in mind.
The matter of taxation was a huge concern as our constitution was being written. In particular, our constitution was written to prevent the tax system of tyrants, the direct taxation of income. Our present form of taxation, the income tax, was expressly forbidden by the constitution. Article I, Section 9, Paragraph 4: “No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein directed to be taken.”
Perhaps unknowingly, the wisdom of our Founding Fathers was overridden with the passage of the 16th Amendment on Feb. 13, 1913. According to Americans for Fair Taxation, “That 16th Amendment was simply worded, the tax return consisted of only one page, and the entire tax code itself consisted of only 14 pages.” At the ripe old age of 100, this cute baby in bath water has grown beyond 74,000 pages to become an ugly monster in sewer water. The most recent case in point was the fiscal cliff drama on stage in Washington, D.C.
The federal tax code drives jobs, companies and capital out of our country. High business taxes have driven up the prices of USA-produced goods and services to the point they may no longer be competitive in the world markets. The exportation of our high taxes no longer works in today’s markets and we, the final consumer, pay over 22 cents per dollar in hidden taxes on goods and services produced in this country.
We have regressive taxes on jobs, called payroll taxes, which are paid by both the employer and the employee. Want less of something, tax it more – we have a 15.3 percent tax on jobs. It’s no wonder the number of jobs in the U.S. has decreased.
Tax lobbyists in Washington, D.C, outnumber elected officials by 32-to-1. The tax code is used by politicians, lobbyists and special interests to their advantage to gain tax breaks, reward their friends and campaign supporters, punish their opponents and fund their pet projects.
As a nation we spend $450 billion per year to comply with income taxes. The IRS budget is $13 billion and it has 110,000 employees. An IRS study found code complexities alone lead to 16 percent noncompliance.
The underground economy, estimated to be $1 trillion to $1.5 trillion, goes untaxed. This makes no sense at all!
The present tax code punishes good behavior with taxes on incomes, savings and investments and rewards bad behavior with tax deductions for debt.
We need real, true tax reform that complies with the principles of tax reform as developed by the American Institute of CPAs. The principles for tax reform call for a tax code that is fair, simple and transparent, supports economic growth and collects the same total revenues as the current tax system. Our present tax code violates the first four of these principles.
There is a solution, found and created after years of research and study from $22 million in private funds. The solution takes power from politicians, lobbyists and special interest groups and probably will not be embraced by many of them.
Don’t let the professional politicians and the lobbyists further divide Americans along political lines. The non-partisan nature of the solution should unify all Americans, regardless of political party affiliation. All will benefit from it and therefore should readily support its adoption.
The solution starts by moving the tax base from income, savings and investments to a tax based on consumption. The solution is a progressive national consumption-sales tax system, The Fair Tax. The system includes a monthly tax rebate to untax family purchases up to poverty level spending.
We can have true tax reform by passing The Fair Tax Bill. Please contact your U.S. representative and two senators. Ask them to please cosponsor the Fair Tax Bill. Learn more and get involved at www.fairtax.org.
Paul Livingston is a FairTax volunteer and district director residing in Jackson ville, Fla. Contact him at firstname.lastname@example.org.