I have to give kudos to Gary Gerard for his op-ed in the Times-Union about taxes. It is shocking how so many households can get away with paying no income taxes. It should also be shocking that Americans spend roughly $265 billion a year just to comply with a 60,000-page federal tax code that stifles productivity, shifts jobs and dollars to overseas markets and evidently stifles the freedom of the American people. However, there is another option on the tax collection in this country. It is a system that is equitable, it is expansive, and above all else, it is fair.
The Fair Tax is a piece of legislation that will revolutionize tax collection in the United States. The Fair Tax eliminates all federal withholding taxes on individuals and corporate taxes and replaces it with a 23 percent embedded tax on the new goods and some services that Americans purchase. This tax is only collected once, at the point of sale. So when you go buy a new car, you pay a tax. If you buy clothes at a department store, you pay a tax. If the goods you buy are used, there is no tax.
Of course, the Fair Tax protects the idea of keeping tax free the necessities of life. So what the Fair Tax does is give every valid Social Security cardholder who is a U.S. resident a monthly prebate equal to the Fair Tax, paid on the necessities of life. People who are here illegally will not be eligible for a prebate and will pay taxes on everything they purchase. Tourists who come here will pay taxes on everything they purchase and take back home with them. Corporations and small businesses will be free from having to make tax decisions and will want to invest in the United States. Individuals who have put an estimated $13 trillion in foreign banks will want to put their money in U.S. banks to protect from income taxes - after they pay for hiding the income from the federal government.
Now some people might think that 23 percent is too high; however, to keep it revenue neutral, the rate must be that high. Once the federal government begins to cut spending, the rate can come down. However, with the Fair Tax, workers can keep their entire paychecks, people who are retired can keep their entire pensions and people who make good decisions on what they purchase can theoretically live without having to pay one dime in taxes to the federal government. The current rate will allow people who need Social Security and Medicare to receive those benefits while allowing younger generations to save for their own.
Radio commentator Neil Boortz summarized the Fair Tax as, "The biggest transference of power from the government to the people in history." Under the Fair Tax, the ultimate winner is freedom.
To read more and be properly informed about the Fair Tax, go to www.fairtax.org To see a list of candidates in Indiana supporting the Fair Tax, go to www.infairtax.org
