Thursday, February 03, 2005

50 Reasons I Like the Fair Tax - Part 1
Kenneth J. Van Dellen (with help from friends) 1/22/05

Because there are 50 reasons, I will post 10 each day for the next five days. That will break it down nicely, I believe, so that you can mull over each reason and see just how good the Fair Tax is.

FairTax and Individuals and Families (Family-friendly tax reform)
  • It allows workers to keep 100% of their pay, with nothing withheld for the IRS or for Social Security and Medicare payments.
  • It is revenue neutral with the present income and payroll tax system, funding the federal budget at current levels.
  • It shifts the tax to consumption. Records show that consumption is more stable than income, therefore the tax revenue stream is likely to be a more stable and predictable amount.
  • It is progressive, a “prebate” of the tax amount up to the poverty level is given to everyone. This means that those spending below the poverty level have a net gain because the “prebate” exceeds the amount paid in taxes. (Under the present system the working poor pay the 7.65 percent payroll tax even if they get a full refund of income tax withheld.)
  • It doesn’t tax pre-owned items – clothes, cars, homes. Only new items are taxed when sold by a business to an individual.
  • It is expected to remove an average of 22% of the cost of American made goods by removing the built-in payroll tax (the other 7.65% of earnings that employers pay), corporate income tax, and other business taxes that are now passed to consumers as an “embedded" tax of approximately 22% due to the cascading of income and payroll taxes paid by U.S. employers, at every step of production, to the U.S. Treasury. Competition will cause prices to fall by approximately that amount, on average.
  • It allows families to save more for home ownership, education, and retirement. An average family making $50,000 will have $7,500 more spendable income.
  • It removes the need for formal accounts of the 401(k), IRA, HSA, etc., varieties. Anyone, rich or poor, will be able to set up any kind of savings or investment account without regard to taxes or the government. No special knowledge of tax law is necessary.
  • It makes educational tuition a tax-free expenditure of tax-free income.
  • It eliminates the income tax and the IRS. Members of Congress and the public overwhelmingly agree that the current internal revenue code is cumbersome, intrusive, coercive, and inefficient.

Coming in Part 2: more Individual and Families

For more information go to www.fairtax.org

2 comments:

Kitten said...

Thank you. All credit goes to Kenneth J. Van Dellen. I am merely reprinting. Please, come back for the rest of the reasons for supporting the Fair Tax!

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