FairTax – A New Tax System for the American People.
Before I was self-employed I received paychecks from my employer on a bi-weekly basis. It was almost painful to look at them – such a gigantic portion was ripped away from me to pay taxes even before I ever saw a penny. At the end of the year after filling our paperwork complex enough to make my head spin and praying that I didn’t make any mistakes I’d send in my papers to the IRS – only to have more money taken out of my pocketbook. Granted, for my age I wasn’t doing poorly but on the other hand I was lower middle-class, none of this $100k year stuff.
The tax system is depressing. The fact that taxpayers are chosen at random by the IRS for audits is disturbing. The recent news that our “emergency bailout” includes numerous pork provisions offering tax exemptions to small niche special interest groups is infuriating. The Fair Tax offers several significant advantages over the current tax system and other alternatives – including a relatively significant amount of support from legislators in the Congress.
What is the FairTax? Essentially the FairTax would replace all current taxes with a single, simple tax – a sales tax. Yes, the sales tax would be quite high (around 30%) but you’d be bringing in a much heftier paycheck and not paying out anything at the end of the year – further everyone (no exceptions) would receive a prebate each month covering the basic amount one would pay in taxes on essential goods (e.g. food and clothing). Additionally, items are only taxed when they are new – so your acquisition of a used home, car, etc. would not be taxed. Finally, the reduction in numerous tax burdens on businesses and the increased simplicity of adherence to business tax laws would result in a dramatic decrease in the cost of manufacturing and distributing products allowing a similar drop in price.
I could go on and on, but why? The Americans for Fair Taxation have written up an extensive website on the topic – position papers, news, scorecards for whose for/against in the political system, and just about anything else you could desire – so go check them out!