|The FairTax Book|
|Sunday, February 5, 2006 [11:53 am]|
by Neal Boortz and Congressman John Linder
Seems like a great idea to me: repeal all federal taxes (including income taxes, business taxes, investment taxes, inheritance taxes, Social Security taxes, and Medicare taxes) and replace them with a simple national sales tax on all goods and services at the retail level.
This plan replaces over 50,000 pages of tax regulations with a 130-page document. The plan would also do away with the IRS. Parting is such sweet sorrow...
The book estimates that a sales tax rate of 23% would be sufficient to maintain the federal government's current revenue level.
What about the poor? The plan also includes a monthly tax rebate check sent to each and every household. The size of your rebate depends on the size of your household. The refund is an estimate of how much your household would have spent in taxes when buying the basic necessities of life (according to national poverty levels). For example, a family with two parents and two kids would receive a monthly rebate check for $492 (a family of four spends about $2100 per month on the basic necessities of life, and 23% of that $2100 [$492] they would be spending on sales taxes). Thus, the basic necessities are tax-free.
Why is the FairTax a good idea?
1. It makes our tax system easy to understand and easy to enforce.
2. It taxes consumption instead of income.
3. It provides funding for Social Security and Medicare that is not dependant on the size of the current working population (no more "baby boomer retirement" crises).
The more you spend, the more tax you pay. Tax evasion, even for "criminals," becomes nearly impossible.
The Fair Tax Bill is currenty being reviewed by a House committee as H.R. 25.
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