Tax Day

It's April 15th and if you haven't filed your taxes yet, you have until midnight to either get them in the mail, filed electronically, or request and extension. Did you pay enough in taxes? Do you think you should pay more? Maybe like most of the rest of America, you think you paid too much.

Wouldn't you like to make April 15th just the day between the 14th and 16th? Nothing special about the day, unless it's a birthday or anniversary or other special day for you. It can be like that.

HR 25 and S25 have introduced into Congress as the Fair Tax Act. It would repeal the 16th Amendment which created the Income Tax and abolish the IRS. You would no longer file taxes. No more 1040's. "C" would be just another letter of the alphabet instead of a tax form.

No more FICA taken from your paycheck, Regular or Medicare. No more withholding. The money you earn you will keep. What a concept!

You will "pay" your taxes based on what you purchase. If you buy a new item, you will pay tax on it. If you buy a "used" item, you will pay no tax at all. This is a consumption tax. You are taxed on what you consume (buy).

You will get a prebate each and every month deposited into your bank account to pay for the taxes you will pay on the basic necessities of life. A married couple with three kids would get a different amount ($487) than a single mom with three kids ($327) (5 family members as opposed to 4). And yes, it's fair. It's based on the number of people in the family instead of income. Don't forget, that single mom might be a doctor or lawyer and the parents a waitress and a car salesman.

Everyone who buys an item will pay taxes - American citizens, illegal aliens, foreign tourists, and anyone who doesn't have a traditional job where taxes are taken from their paychecks (criminals such as drug dealers, prostitutes, thieves, burglars, and shoplifters).

Everyone will pay the same rate of tax, from Joe and Jane Sixpack to the Bill Gates of the world. If you buy an item in America, you will pay the same tax. The difference will be if you buy a "used" item or a new item. If you want to buy a new car, say a $25,000 vehicle, you will pay the same tax rate as a Bill Gates who can buy a $100,000 vehicle.

Taxes will be collected the same way they are today. The retailer or service provider collects a state sales tax and remits it to the state Department of Revenue, or whatever it’s called in your state. When the National Retail Sales Tax (NRST) – The Fair Tax – is passed, the retailer or service provider will collect whatever tax is due and remit to the Federal government when they remit taxes to the state. Considering the amount of time saved by not having to prepare and file a Federal Income tax form, I think that it would be well worth it.

I believe that there will be an added benefit down the line. Forty-three states now have a state income tax. When the citizens of those states see the benefits of a consumption tax rather than a tax on income, I believe they will begin to petition their state governments to repeal the state income tax and go to a full consumption tax. Think of the benefits, you will no longer pay the state every payday, you will no longer pay the Federal government every day and you will pay taxes only on what you buy.

You will "own" your own money. You will be able to spend the money that was previously taken from your paycheck any way you choose. You can put it in the bank, you can pay off a mortgage, send your kid to college, buy a house, take that dream vacation you've wanted to take, or whatever you want to do. It’s your money. It will be your choice on how you spend your money. Unless you bury your money in a hermetically sealed mayonnaise jar in the backyard, it will help the economy. And I don’t know anyone who does that.

I know you will have questions, so go to Americans for Fair Taxation and see if you can get your questions answered. Or go to my sidebar and look for Income Tax Reform - The Fair Tax. Maybe one of the links will help you understand why this is such a good idea.

Freedom of choice. It's a good thing.