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Section A: General News


Editorial: Who will tax reform hurt and who will it help?




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Guest Editorial
April 10, 2013 | 1,120 views | Post a comment

By Glen Terrell and Paul Livingston

Who is helped and hurt by real/true tax reform?

All government policy, including taxes, hurts some and helps others. Winners and losers are chosen. Class warfare is applied. Politicians, lobbyists, and special interests play the tax system to their advantage.

Real true tax reform could eliminate direct taxation, a tyrannical taxing system, and re-establish the original Constitution with the repeal of the 16th Amendment. Gone would be the income tax and payroll taxes, regressive taxes on jobs. Tax reform could eliminate hidden/embedded taxes of some 22 cents per dollar and release businesses from a complex tax system that drives up prices of U.S. goods and services and drives out jobs, companies, and capital from our country.

The tax base could be moved from income, savings, and investments to a larger and more stable tax based on consumption. The underground economy, estimated to be more than $1 trillion, could be taxed. Families with Social Security numbers could be untaxed up to poverty level spending. Everyone would benefit with new job opportunities from an expanding economy and from tax relief.

All Americans would be helped with tax reform that follows the five tax reform principles of fairness: easy to understand, transparent, supports economic growth, and is revenue neutral. (That is, the same amount of taxes would be collected as the amount of taxes replaced.)

The solution moves the tax base from income, savings, and investments to a tax based on consumption. One tax, a progressive sales/consumer tax system on all new goods and services. The solution is called the FairTax, bill HR25/S122.

The FairTax solution can be a unifier to bring all parties together. The FairTax is a progressive system. The more you spend, the more tax you pay and at an increasing rate up to 23 percent. With the monthly tax refund, a negative tax rate is possible until your spending exceeds the poverty level, which is determined by the Department of Health and Human Services.

Think of the FairTax as a progressive tax on the standard of living that you can afford. You would have freedom over how much tax you pay by controlling how much you spend.

So who opposes the FairTax? Tax lobbyists, and Washington has 17,500 registered tax lobbyists. They outnumber the 537 elected officials by 32 to 1! Lobbyists game the tax code to get favors.

The IRS will not be needed after the transition to a FairTax. Some people will be employed to oversee tax collections from the states and by Social Security to manage the tax refund. The refund, or prebate, is issued the first of each month. Gone is $450 billion spent annually to comply with the present federal tax code.

Some politicians oppose the FairTax because they like the power to use the present tax system to gain favor. There would be fewer tax lawyers and demand on CPAs for income tax preparation.

Some voters like that politicians have the power to redistribute wealth by taking from some and giving to others. Others believe that politicians are better at managing our economy than the free market system, so grass-roots support from loud and clear voices is needed to get the FairTax bill passed.

As of March 13, 63 representative and eight senators support the FairTax bill.

Editor’s Note: To read the bill, (HR 25 and S 122) go here: http://1.usa.gov/XDXRoU and click on GPO site. To learn more about or join the FairTax movement, go to www.fairtax.org and sign up.
 

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