“I’m on the side of significant, fundamental tax reform. Our current income tax system has outlived its usefulness and needs to be replaced.”
- The current income tax system is full of loopholes for those who can afford high-priced tax lawyers and lobbyists. It fails to ensure a fair share contribution by all Americans, with the top 5% of earners paying well over 1/2 of all taxes collected. It’s an enforcement nightmare, requiring a government bureaucracy of over 100,000 IRS agents. It’s so complex it needs a multi-billion dollar industry of tax preparers and attorneys to make it work. And, the power of the IRS is often improperly manipulated by deceitful politicians over individuals and corporations to secure unwarranted favors or advantage.
- We need a tax system that is fairer, flatter and easier to understand, and one that produces the revenue stream necessary to fund constitutionally-appropriate government services.
- Cain’s 9-9-9 plan, Perry’s 20% flat tax, Romney’s 59 point plan, Ron Paul’s “Restore America Plan”, and, the Fair Tax, each have merit and move us in the right direction.
- Of them all, I believe the Fair Tax is a smart way to go. Fair Tax legislation is designed to replace all federal income taxes (including the alternative minimum tax, corporate income taxes, and capital gains taxes), payroll taxes (including Social Security and Medicare taxes), gift taxes, and estate taxes with a broad, national 23% consumption tax on retail sales of all new goods and services for personal consumption.
- The Fair Tax proposal also calls for an advance rebate, or “prebate”, to ensure no American pays federal taxes on spending up to the poverty level, dollar-for-dollar federal revenue neutrality, and a companion constitutional amendment that repeals the 16th Amendment.
- The sales tax would not apply to exports, goods used by businesses to produce other goods, or used goods.
- Advantages of a Fair Tax include: (1) All federal personal and corporate income taxes, gift, estate, capital gains, alternative minimum, Social Security, Medicare, and self-employment taxes would be abolished and replaced with one simple, visible, federal retail sales tax administered primarily by existing state sales tax authorities, (2) Workers get to keep their entire paychecks, (3) Retirees get to keep their entire pensions, (4) Closes all loopholes and brings fairness to taxation, (5) Everyone pays, including illegal aliens and the ‘underground economy’, (6) Completely eliminates the need for expensive tax preparation services; and, (7) Abolishes the IRS.