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Section A: General News


Editorial: What are the five principles of ‘fair’ tax reform?




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February 20, 2013 | 1,315 views | 13 comments

As mentioned in last week’s column, there is a solution to the tax problem. It is a solution that was created after years of research and study from $22 million in private funds.

The FairTax takes power from politicians, lobbyists, and special interest groups, and, therefore, probably will not be embraced by many of them.

The non-partisan nature of the solution should unify all Americans, regardless of political affiliation, as all will benefit. The solution starts by moving the tax base from income, savings, and investments to a tax based on consumption. It is a fair tax.

Evaluating reform

The American Institute of CPAs [www.aicpa.org] lists criteria to evaluate proposed tax reforms. The FairTax bill (HR25 and S122) is based on five principles which are in compliance with the American Institute of CPAs’ criteria for tax reform.

1. Fair means no loopholes, no special deals, no exclusions, no class rates, and no exceptions. Everyone is treated alike.

The present tax code divides us into classes based upon income. United we stand; divided we fall.

The FairTax is one rate of 23 cents per dollar in the sale price of all new goods and services. That rate is figured inclusively in the retail price of goods and services just like our present income and payroll tax rates are figured inclusively in our pay.

The FairTax system is progressive because of the rebate to untax purchases up to the poverty level as determined by the Department of Health and Human Services. This monthly “prebate” is sent out the first of each month to all registered families with valid Social Security numbers.

The FairTax is capped at 23 percent on the standard of living that the family can afford. Imagine regaining lost economic freedom by controlling how much tax you pay by controlling how much you spend.

The FairTax greatly reduces the use of the tax code by politicians, lobbyists, and special interest groups to enhance their power and authority.

2. It must be simple: Read that as “easy to understand.”

Our present tax code is more than 74,000 pages. The IRS studies show the code to be so complex that 16 percent of the errors on taxes are due to its complexity and contradiction.

The FairTax eliminates income tax, payroll tax, capital gains tax, gift tax, estate tax, and self-employment tax. The FairTax bill is 133 pages long, double spaced, and can be read on the Internet. For a PDF of the bill, go here: http://1.usa.gov/XDXRoU and click on GPO site.

The FairTax would end the 240 million income tax filings and be collected by 20 million businesses that are registered and licensed by the states. To cheat now takes only you; with the FairTax it requires a conspiracy of both the buyer and seller.

3. Transparent means taxes are in the open. You see and know what is being taxed and how much tax you paid. The FairTax eliminates hidden taxes businesses now pass on to consumers in the form of higher prices.

4. It supports economic growth. Our present tax code hurts the economy by punishing the creation of jobs, along with capital. The FairTax makes the USA a tax-free haven for businesses, and brings jobs, companies, and $10 trillion to $12 trillion of offshore capital to our economy. It taxes the underground economy estimated to be $1 trillion to $1.5 trillion.

5. It is revenue neutral, designed to bring in the same amount of money as the present system.

The FairTax moves the tax base from income, savings, and investments to a tax based on consumption. We can have true tax reform. Contact your U.S. representative and your senators. Ask them to please co-sponsor the FairTax bill.
 

Your Opinions and Comments

 
PRAIRIE GROUCH  
GRAND PRAIRIE TX  
March 27, 2013 6:58am
 
One of the provisions of the proposed fair tax is the ability of the government to adjust the rate to match the needed revenue. The tax can be adjusted up or down to match the needed revenue. Is there any one on this green ... More ›

 
Alvin Charmaine  
March 27, 2013 6:28am
 
The fair tax exempts business purchases from being taxed, it also doesnt tax used goods. Does that mean that I can open a business that buys cars, then sell them used tax free? The devil is in the details with the fair ... More ›

 
Publius Valerius Publicola  
Rome, Tx.  
March 26, 2013 3:19pm
 
Elect responsible, common sense conservatives to all offices and solve the problem. Whatever the solution, flat or the fair tax, the initial rates, until spending is controlled, will be high. As long as the under-informed and ... More ›

 
PRAIRIE GROUCH  
GRAND PRAIRIE TX  
March 26, 2013 6:50am
 
Fair tax is not fair. Just another progressive tax system which has a rebate system. Flat tax with no exemptions is fair.

 
Alvin Charmaine  
March 25, 2013 7:44pm
 
They do fair tax and im going into the import - export business. The black market opportunities will be awesome. You think the border has holes in it now, just wait till people are sneaking groceries across.

 
PRAIRIE GROUCH  
GRAND PRAIRIE TX  
March 25, 2013 4:53pm
 
The proposed fair tax rate is 23 percent and it is inclusive which equates to about 30 percent added to each item purchased. In addition, the state and local tax will be paid on the price of the product. The more tax that ... More ›

 
Anthony Gasbarro  
Fairhope, Alabama  
March 25, 2013 12:44pm
 
Our federal tax code is broken. There have been more than two changes to it EVERY congressional day for 20 years. It is so complicated that many IRS employees can’t explain it accurately. It is 72,000 pages long. A tax code ... More ›

 
squawk box  
Pandora, Tx  
March 22, 2013 6:55am
 
Adding a few thousand to a new car that most people finance must have the banker smiling.

 
PRAIRIE GROUCH  
GRAND PRAIRIE TX  
March 22, 2013 6:44am
 
The fair tax rate is 23 percent. Since this is an inclusive rate, the exclusive would be about 30 percent. Since the tax would be included in the sale price, state sales tax would automatically rise. Beware of the dog that ... More ›

 
Alvin Charmaine  
March 22, 2013 5:51am
 
Im a fair taxer, i support tax reform for all the reasons mentioned. There are a lot of tax deferred dollars that would get freed up, and automatically hit the ecoonomy, trillions in 401k's I'd forsee a huge black market ... More ›

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