Thursday, March 09, 2006
Give the FairTax a chance
Editorial commentary
Recent contributions
- Can we be a two-trolley town?
- Striving for civility
- School funding no fantasy
- Pesticide board's work will continue through merger
- Commentary archive
From the RoundTable blog
Read the latest entries
Donald A. Koop
Koop, of Roanoke, is a retired engineer from Eastman Kodak Co. and the volunteer communications director for Roanoke Area FairTax.
A local group of volunteers is working to provide a fairer way to pay federal taxes. A bill pending in Congress, The Fair Tax Act of 2005 (HR 25), would abolish the Internal Revenue Service and replace the income tax with a national sales tax. That is, the tax on income would be replaced with a tax on consumption.
A tax system that is routinely manipulated for their benefit by those with means, resulting in thousands of pages of incomprehensible rules and regulations, would be replaced with a system much like one we routinely deal with today -- our sales tax.
Roanoke Area FairTax (RAFT) is affiliated with Americans for Fair Taxation, the national organization that is supporting similar grassroots efforts across the nation.
RAFT has two missions: education and advocacy. We seek to bring knowledge about the FairTax to area citizens and channel the support of citizens to urge elected federal representatives to pass the FairTax legislation.
Education takes two forms:
First, make citizens aware that such a proposal exists.
Second, tell the public what the proposal is and provide sources of information. Such information includes a Web site (fairtax.org), a best-selling book (The FairTax Book by Neal Boortz and Rep. John Linder, R-Ga.), speakers, publications, informational meetings, workshops, booths and word of mouth. In addition, volunteers call on residents to talk about the FairTax.
Advocacy involves accumulating the support of individual citizens to provide notification to members of Congress that HR 25 deserves to be passed.
Although there is little motivation for Congress to pass the bill, when grassroots support reaches critical mass, action will follow.
The volunteers who educate also provide the conduit from citizens to representatives via a petition urging action. In general, people sign the petition only after learning what the FairTax is about.
Hopefully, readers of this piece will explore the sources of information listed above so that, if they choose, their support can be applied to the task. A petition can be submitted directly on the Web site.
Certain principles are central to the FairTax proposal:
n It is not anti-tax.
n It will raise the same revenue as the current system.
n It will tax only new goods and services
n Everyone will pay taxes the same way.
The creators of the FairTax determined that 22 percent of the current cost of consumer goods and services consists of embedded taxes and compliance costs (time and money). After eliminating these, a 23 percent embedded sales tax will provide equal revenue.
Other changes will benefit taxpayers, too. Gone will be the taking of withholding taxes, Social Security taxes and Medicare taxes from our wages. Gone will be the filing of paperwork and the payment of taxes every April 15. Gone will be the costs of the filing. Gone will be the Alternative Minimum Tax that due to inflation has declared many of us far richer than we really are.
Gone will be the need for the rest of us to make up for the tax evasion of others: earners of illegal income, the underground economy and the dishonest, all amounting to hundreds of billions of dollars of untaxed income. Gone will be the tax compliance costs of commerce passed on to all of us in the form of higher prices.
A number of bread-and-butter benefits will result. Although our take-home pay will be larger (no deductions), prices will be about the same due to competitive pressures. We will be able to buy more.
In addition, there is a provision for the less-successful: Every household will receive a monthly check (a "prebate") covering the taxes on all basic necessities for that size household. For low-income households, that will represent a 23 percent increase in income.
For the wealthy, it will approximate pocket change. For the rest of us, the prebate will represent an increasing benefit with decreasing income.
The economy is expected to show substantial growth as we think more about maximizing income and less about minimizing taxes. Offshore investors are expected to return and foreign investors to come to take advantage of our favorable tax environment. American companies will enjoy competitive advantages in the global economy.
What can you do to contribute to the public discussion of the FairTax? Visit the Web site, read the book, attend monthly FairTax meetings (fairtax.meetup.com/53/), write letters to the editor and sign a petition. Your support for this measure will make April 15 just another beautiful spring day.
