Friday, July 25, 2008

The FairTax
by Rep. John Linder

We are rapidly coming to the point when people will be telling stories about what a great and powerful nation the United States of America used to be. The cost we are asking our citizens to endure makes us less than competitive in a global economy. We have a tax law with nearly 70,000 pages of law and regulations. Our tax on capital is crippling. Our tax on income for the highest earners takes half of what we earn. All of these costs, as well as the cost of complying with a code that no one understands, become embedded in the cost of our goods and services pricing us out of global markets. This is very well understood overseas. In a recent visit to Ireland, Neal Boortz, the co-author of two books on the FairTax, was told by an Irish gentleman that the Irish are scared to death that we will go to the FairTax. He explained that their economic “miracle” came as a direct result of our crushing taxes on capital and labor. Very simply, American companies relocated to Ireland because their tax code was much friendlier to business.

Since 1998 I have advocated for the FairTax. A simple bill--in fact, a mere 132 pages long--that will abolish all Federal income taxes, including personal, estate, gift, capital gains, alternative minimum, corporate, payroll, and self-employment taxes, and replace them with one simple, visible, personal consumption tax. The FairTax taxes what we take out of society rather than what we put into it.

Every household will get cash distribution at the beginning of each month that will be based on the size of the household and will allow that household to buy its essentials untaxed. Beyond that we are all voluntary taxpayers paying taxes when we choose as much as we choose by how we choose to spend.

Our nation has coped with this tax code for 95 years and it has failed. Our tax code has driven $2 trillion into the underground economy costing us about $50 billion in tax collections. Our tax code has driven $12 trillion into offshore financial centers that should be parked in our markets and banks. We are spending between $400 and $500 billion each year just complying with the code. That is like paying for a dead horse. We get nothing for that expenditure but a headache.

Getting rid of the IRS fixes everything. Keeping it in place and nibbling around the edges of the current system fixes nothing. As former Secretary of the Treasury told me, “You have just proposed the largest magnet for capital and jobs in history.” Why wouldn’t we want the United States to be the outsource destination for jobs? Why wouldn’t we want our nation to be the world’s safest and most stable tax haven? The FairTax will give us these results as well as create an environment that will expand freedom.

We have amassed millions of supporters across the country, all of whom are hungry for change. That said, we have millions more to go and we need to grow this grassroots army. I hope you will go to my website, There you will find much more information on the bill, and you can join the fight by signing up to become a “Citizen Co-Sponsor” for the FairTax. You can play an active role in bringing change to Washington.

found here at HuckPac

No comments: