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Considering the mire of bureaucracy regarding federal income tax and its collection, I am pleasantly surprised by the realistic options being dis-cussed. On July 31, President Bush’s Advisory Panel on Tax Reform will include in their recommendations to policymakers: a revision of the federal graded income tax, a flat income tax, a consumption tax, and various combinations of these.
In the realm of law, where a few decide for the whole how society runs, decisions should not be made based on which people or groups benefit but by which system applies the same treatment to everyone, allowing personal choice to decide one’s progress in life. Taxation on income – productivity – discourages hard work, while taxing consumption via purchases of new items allows for more specific personal control of how much money goes to the public good.
The FairTax Act of 2005, H.R. 25, contains the best solution for sim-plicity, fairness, and equal revenue. Fairtax.org describes the proposed 23 percent tax as a “federal retail sales tax that replaces the entire federal income and Social Security tax systems, including personal, gift, estate, capital gains, alternative minimum, Social Security/ Medicare, self-employment, and corporate taxes.” I am proud to say the bill’s co-sponsor, John Linder (R-GA), is the Representative from my home district. He and Democrat Collin Peterson of Minnesota have garnered support from Speaker Tom Delay and in the last Congress had 54 co-sponsors. In 2003, Georgia Senators Saxby Chambliss (R) and Zell Miller (D) introduced S 1493 in their chamber.
At the San Francisco Tax Panel meeting on March 31, Milton Friedman gave his respected opinion that flat consumption tax is the way to go, leading to an increase in savings and financial independence opportunities for the poor. He believes that misconceptions of the tax’s effects and political considerations will hinder the bill’s acceptance. This is partially because it is seen as regressive: because the poor spend a greater percentage of their income on necessary goods and the rich will have much more disposable income, the class gap will ever widen. FairTax answers these concerns quite thoroughly.
Each month, singles and families receive a rebate check for the amount of FairTax on a calculated level of necessary items up to the poverty level. Eric Decker of Mountain View, District Director of Californians for Fair Taxation, compared this highly pro-gressive feature to the Earned Income Tax Credit “without the Byzantine mathematics.” He also emphasized that the tax is only on new goods, so poor families can avoid taxation on clothing, automobiles, or toys. As necessary expenses (i.e. medical or educational) fluctuate, a family can adjust spending on non-essentials. I also see this as a way to rein in our rampant consumer culture, obsessed with acquisition and placing stress on global resources. The biggest benefit of FairTax is the empowerment of “working class families.” The decision to save income will be the most beneficial, giving the poor an opportunity. If rich bastards want to buy yachts, they pay their tax to support rebates and fund government spending.
At the recent aforementioned reform meeting, Mr. Decker quoted 13 FairTax supporters outnumbering other advocacy groups. FairTax volunteers comprise a huge grassroots effort, and many of the comments submitted to the Tax Advisory Panel show support for the bill. If you feel strongly for or against FairTax or any other options for the U.S., please visit www.taxreformpanel.gov to exercise your voice.
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