Editor’s note: This is the sixth in a series of commentaries in support of The Fair Tax.
By DAVID LEAKE
The stock market has recovered. Home and car sales are increasing. Yet, America’s unemployment remains too high. Millions can’t find work. Millions of others are in part-time jobs or in jobs for which they are over qualified. Millions more have simply given up looking.
A major cause is the American income tax system. It discourages productivity. It drives jobs overseas. At an estimated 73,000 pages of tax laws, rules and court decisions, it frustrates everyone.
Taxing income discourages savings. Taxing businesses (the U.S. currently has the highest business taxes in the world, up to 35 percent) discourages existing businesses from expanding here. Is it any wonder they are moving operations and jobs to countries that tax them less?
Did you know, when the Titanic sank, there was no tax on income? We had an income tax briefly, from 1862 to 1872, to pay off Civil War debts. The Supreme Court in 1895 declared a new income tax passed by Congress unconstitutional. Aside from that, we survived from 1620 until 1913 without a tax on personal or business income.
What this country needs is not more patches on a broken tax system. It needs to replace that system with one that does not punish working people; one that lets them keep more of their hard-earned income. It needs a system that creates jobs by encouraging existing businesses to grow, and new businesses to be created in this country.
Such a tax system has been proposed. It is backed by over $22 million in research. It is a progressive tax that has been heralded in large part by conservatives. It sets a tax rate of 0 percent on families living at or below the poverty line. It taxes middle income families in a range from 1 percent to 16 percent. Only the very wealthy would approach the highest rate, at 23 percent.