Kenneth J. Van Dellen (with help from friends) 1/22/05
FairTax and Individuals and Families (Family-friendly tax reform)
- It encourages individuals to self-insure, making the health system more direct-pay (no 3rd party pay), thus bringing costs down.
- It puts an end to the anxiety for honest taxpayers that begins soon after January 1 for most of use, culminating in wondering whether we’ve claimed everything we legally could and nothing we shouldn’t, all without raising questions at the IRS. It makes April 15 just another day. (Perhaps it will be a holiday after the FairTax is enacted!)
FairTax and Social Security and Medicare
- It eliminates the regressive payroll tax that hurts the poor. Currently, every one of us is taxed a minimum of 7.65% on our first-dollar of wages up to $90,000 (the cap for FICA, not Medicare), if we earn that much. It provides funding for Social Security and Medicare at a level equal to the current system.
- It provides that all 290 million Americans and 51 million visiting tourists fund Social Security and Medicare with their purchases. Today only 110 million workers fund these programs via deductions from their paychecks.
- It assures that the wealthiest Americans will be voluntarily helping to fund social security with every last dollar they spend above the poverty level. Today, earnings are subject to FICA taxes only up to $90,000. The wealthiest Americans therefore do not pay into the system above that amount. If their earnings are from investments, no earnings fund the Social Security system.
FairTax and the Economy
- It increases investment in business by eliminating the capital gains tax.
- It allows for better planning by businesses, because they no longer have to consider the tax implications of everything they do.
- It makes higher employment or better compensation possible in the small business sector, where today it costs approximately three dollars in compliance costs to pay one dollar in payroll and income taxes.
- It makes American products more competitive overseas by removing the embedded tax from them, thus lowering the prices of our exports, which compensates for low foreign wages.
- By making our exports more competitive overseas, it lowers our balance of trade deficit and increases employment at home.
Coming in Part 4: The Economy; Churches; and Rights and Freedoms.
For more information go to www.fairtax.org