- Home
- Premium Memberships
- Lottery Results
- Forums
- Predictions
- Lottery Post Videos
- News
- Search Drawings
- Search Lottery Post
- Lottery Systems
- Lottery Charts
- Lottery Wheels
- Worldwide Jackpots
- Quick Picks
- On This Day in History
- Blogs
- Online Games
- Premium Features
- Contact Us
- Whitelist Lottery Post
- Rules
- Lottery Book Store
- Lottery Post Gift Shop
The time is now 6:40 am
You last visited
May 6, 2024, 6:03 am
All times shown are
Eastern Time (GMT-5:00)
"Fair Tax info update ...
Published:
Updated:
"Fair Tax" Promotes Better Compliance, Smaller IRS
Apr 14, 2006, 15:45
Ben Pierce
The FairTax replaces the income tax and all other federal taxes with a national consumption tax. The FairTax is levied only once, at the point of purchase on new goods and services.
The group admits it will be difficult for legislators to face down entrenched special interest groups, but they initially proposed replacing the current system with U.S. Senate bill S. 25 and U.S. House of Representatives bill H.R. 25. The next step would be to repeal the 16th Amendment to the constitution allowing the Federal government to levy an income tax.
Signatories to the original petition include noted academic economists and practitioners who feel the current tax code cannot simply be fixed. The current regs include 54,000 pages, approximately 2.8 million words of mind-numbing rules, exceptions and special interest loopholes. This tangled web would be replaced by a simple national sales tax similar to that paid to the county, city or, in the case of our own Hawthorne TDD, the subdivision.
But what about poor people? The FairTax provides every family with a rebate of the sales tax on spending up to the federal poverty level (plus an extra amount to prevent any marriage penalty). The rebate is paid monthly in advance. It allows a family of four to spend $25,660 tax free each year. The rebate for a married couple with two children is $492 per month ($5,902 annually). Therefore, no family pays federal sales tax on essential goods and services and middle-class families are effectively exempted on a big part of their annual spending.
But what about the administrative burden of collecting the tax, now falling on the IRS? States can elect to collect the federal sales tax on behalf of the federal government in exchange for a fee of one-quarter of one percent of gross collections. Retail businesses collecting the tax also get the same administrative fee.
One of the biggest results of the Fair Tax would be to make it more difficult to evade taxes through shelters and other schemes. According to former IRS boss Charles Rossotti, people who actually pay taxes are cheated nearly $300 billion by those who do not pay all their taxes. This means we would enjoy a 20 percent decrease in what we have to pay if everyone paid their fair share.
Charities, which theoretically enjoy the benefits of our tax deduction for contributions, also would benefit under the FairTax. After the 1986 Tax Reform Act, charitable giving increased rather than decreased, despite lowering marginal income and transfer tax rates. Charitable giving rose by $6.4 billion, or 7.6 percent, in 1987 after the top tax rate fell from 50 to 28 percent (more than doubling the tax price of giving). The message is that increasing disposable incomes allows more giving, should citizens decide to do that.
Perhaps one of the worst drawbacks of the current tax system, with its preferences for certain industries and citizen expenditures, is that it distorts the price system of allocating resources to an activity. By removing the twisted incentives of the tax code, the FairTax people hope to accomplish a better use of resources.
Many citizens support the FairTax idea, too. Although many people who would favor such a system look at it from the perspective of making paying taxes simpler, that also represents a huge savings in national resources. If people are not forced to support a massive army of accountants to take care of their taxes, and instead use those resources for something else, the reallocation could potentially benefit all Americans and make our economy more competitive.
A tax every time you pay for your groceries also helps keep in front of taxpayers exactly how much they really pay in taxes. Seeing it come out of your pocket provides a rarely cited psychological advantage of causing people to bulk at every attempt to increase their taxes. Having taxes come out of a check when you never see the full amount makes it easier for Uncle Sam to pilfer your earnings.
(digitalBURG.com publisher Ben Pierce, CFA, signed the original FairTax petition letter along with approximately 75 other economists from locations throughout the country.)
THE FAIRTAX BOOK --- REVISED AND EXPANDED
In just over two weeks - on May 2nd - the soft-cover edition of The FairTax Book will be released. The book contains revisions to clarify points about the FairTax, and a 5000 word "afterword" to bring you up to speed on the latest status of H.R. 25 and to answer some of the critics who have surfaced in the last six months.
Though the furor over the hard-cover edition of The FairTax Book has died down, interest in the FairTax has not. The president's tax reform commission turned out to be a complete flop -- recommending nothing more than more of the same. In the meantime H.R. 25 is adding sponsors in the congress, and House leadership has promised a vote on H.R. 25 in the coming months.
Many of you ask what you can do to move the FairTax forward. I have a simple, and, on the surface, a self-serving suggestion on how you can do just that. Buy the soft-cover edition of The FairTax Book. Don't just by one, buy several. Spread them around. Send them to your friends. I would ask you to do that today ... buy them today. Go to Amazon.com and order a few copies. For less than $100 you can get 10 copies to spread among your friends. Business owners could buy a copy for every employee! We had just that happen with several business owners when the hardback came out. I can remember several days when Belinda and I were hidden in a conference room signing hundreds of books for this or that corporation that bought a book for every employee.
Members of Congress were already shocked last year to see The FairTax Book, a book on taxes, debut at No. 1 on the New York Times Bestsellers list. If the soft-cover edition of the book has a similar success it will send an even-stronger message to Washington. The people have studied this idea for tax reform, and they like it. It's not just a flash-in-the-pan.
Now .. I see that my asking you to get out there and buy the soft-cover edition might sound a bit self-serving. After all, I'm earning royalties here, aren't I? Well, the same pledge I made for the hardback edition stands for the soft-cover. Every penny of royalties, after expenses, will go to charity. With good sales of the soft-cover edition when all is said and done I will have contributed over a half-million to charity. I'm not in this to make money. I'm in this to change the tax code. Help me.
Here's your link for ordering the soft-cover edition from Amazon.com. Order now and you'll have your books within a day or two of the release date. There's an even fancier link at the bottom of the page!
Comments
This Blog entry currently has no comments.
Post a Comment
Please Log In
To use this feature you must be logged into your Lottery Post account.
Not a member yet?
If you don't yet have a Lottery Post account, it's simple and free to create one! Just tap the Register button and after a quick process you'll be part of our lottery community.
Register