LOCAL GROUP FORMS TO PUSH FOR ENACTMENT
(MetroVoiceNews.com) — The national debate over taxation is shifting from the question of whether to alter our current tax system to the question of how to alter it. Today, polls indicate that a large majority of Americans are extremely frustrated with the current federal income tax system. Â The income tax discourages personal savings and investments by taxing capital gains, dividends, and interest earned. Wage earners struggle under the burden of a very regressive payroll tax. The income tax is complex — so complex that no one, not even the experts, truly understands it. Moreover, for the tax to be enforced, the taxpayer must sacrifice significant privacy. As a result, our citizens are governed by needlessly burdensome tax laws that they cannot understand and that are intrusive, complex and costly.
Americans For Fair Taxation (FairTax.org), a non-profit, non-partisan organization, believes that replacing the current tax system with a single rate, federal sales tax levied on all new goods and services with no exceptions or exclusions, best meets this challenge. Research has shown that the FairTax is a fair and progressive system of taxation that increases economic growth, investment, capital formation, and the creation of jobs and savings.
The FairTax plan
The FairTax plan involves passage of legislation that repeals the income tax, the payroll tax in its entirety, the estate tax, the gift tax, the capital gains tax, the alternative minimum tax, the self-employment tax, and the corporate tax; and passage of legislation that installs a single rate, national sales tax on all new goods and services at the point of final purchase for consumption, and that provides for a universal rebate in an amount equal to the sales tax on essential goods and services up to poverty level spending.
Although every taxpayer is subject to the same sales tax rate with no exceptions or exclusions, those least able to share in the cost of government will carry no federal tax burden at all. Under the current system, the more your income is derived from wages, the more you are affected by payroll taxes. In addition, under the FairTax, no one will pay tax on the cost of essential purchases, and those who demonstrate their greater ability to pay by consuming more, will pay more taxes.
Our current tax system is also unfair because it is highly responsive to political influence on behalf of special interest groups. Average taxpayers without the means or organization to influence tax policy are at a clear disadvantage. The inextricable relationship between the tax code and lobbyists is evidenced by the fact that more than half of Washington lobbyists are registered on tax matters. Under the FairTax, there is one single rate, there are no exceptions and there are no exclusions — no loopholes to be exploited by special interests.
In addition to the taxes on income that we pay, we also pay the cost of payroll and corporate taxes that are embedded in every product that we purchase. Businesses pass their costs on to consumers in the form of higher prices. But the burden to the consumer doesn’t stop there. We also pay for the cost of complying with the tax code. So complicated has the income tax system become that an analysis of IRS data by the Taxpayer Advocate Service estimated that individual taxpayers and businesses spend 6.1 billion hours each year complying with the filing requirements of the Internal Revenue Code. The Tax Foundation estimated compliance costs to exceed $265 billion or 3.1 percent of the Gross Domestic Product. This is equivalent to nearly a $1,000 tax on every American. Massive amounts of our national wealth are consumed merely by measuring, tracking, sheltering, documenting and filing our annual income. The twin burdens of time and money required for record keeping, tax form preparation, calculating and funding estimated payment schedules, and tracking income and expenses are eliminated by the FairTax. The FairTax generates the same amount of revenue as the current tax system, but at a much lower cost. The number of tax filers drops from 164.6 million to an estimated 30 million, an 81 percent reduction. Â Compliance costs under the FairTax fall to less than $20 billion.
Slow economic growth and economic stagnation have an adverse impact on low wage earners. These families are more likely to lose their jobs, are less likely to have the resources to weather bad economic times, and are more in need of the initial employment opportunities that a dynamic, growing economy provides. The income tax retards economic performance by creating a significant bias against saving and investment through double, triple, and even quadruple taxation. Under the FairTax, what you earn is what you take home. Americans are able to save more and invest more. The FairTax dramatically increases investment levels compared to levels that would have been achieved under the current income tax system. Increased savings will stimulate investment and productivity and the economy will grow more rapidly, creating demand for workers and improving job opportunities. Because taxes on capital are removed, foreign capital will flow into the United States, creating businesses and jobs. U.S. products competing abroad are free of the hidden costs of taxation while the FairTax is collected on foreign products sold in the United States. Virtually all economic models project a much healthier economy under a broad-based consumption tax such as the FairTax.
Local Group Forms
Kansas FairTaxers have just this spring joined a growing nationwide movement known as Americans For Fair Taxation (AFFT), newly reorganized in Houston this year as the AFFT National Grass Roots Council. The subsidiary AFFT state affiliate in Kansas, the FairTax Kansas Association, or FTKSA, is part of the AFFT National Grass Roots Council, and is seeking to have Kansans become authorized to vote for the Kansas delegation.Â Kansas delegates to the Grass Roots Council will help to shape a nationally coordinated effort to abolish the IRS, repeal the 16th Amendment, and replace the federal income tax. By donating only $10 on the secure www.FairTax.org website, one automatically qualifies to vote for a fellow Kansan to serve as a FTKSA delegate to the national Grass Roots Council.
“Promoting and advocating for the FairTax is the one and only thing that FTKSA does, and totally on a volunteer basis,” said Mark Saylor, a Topeka spokesperson for FTKSA. “One Hundred Percent of the money donated is used solely for that purpose.
The FairTax bill in Congress is designated as HR-25 in the House and S-122 in the Senate. All 6 members of The Kansas Congressional delegation are co-sponsors of the legislation, and it is hoped that the House Ways and Means Committee will hold a hearing on HR-25 soon, voting it out of committee onto the House floor for full debate.
For more information about the FairTax, go to www.FairTax.org. For more information on the local FTKSA group, Saylor can be reached at 785-213-8784.