The FairTax proposes to eliminate, not add, taxes

originally published in The Fergus Falls Daily Journal

On one of his recent television programs, Keith Olberman became one of many whose evaluation of The FairTax reveals their misunderstanding, and the obvious fact that he hasn’t read the bill.

The essence of his remarks was, “The FairTax simply adds another 23% tax on top of all the other federal taxes.”

The FairTax does no such thing.

The FairTax proposes to eliminate all federal taxes — income, withholding, capital gains, corporate, inheritance, Social Security and Medicare — and replace them with a 23% sales tax, also known as consumption tax, paid only once, at the final point of personal consumption, paid only on new goods and services. Used goods, and busines to business trans-actions, will not be taxed.

Most wage-earning, tax-paying American citizens are not aware of “embedded taxes,” that are hidden, and do not appear on the receipt.

Though unseen, the consumer pays them.

A loaf of bread that sells for $2.69 includes the taxes on the wheat seed the farmer buys, the seeder he uses to plant those seeds, the truck that transports the wheat to the mill, the mill operator, the truck that moves the flour to the baker, the manufacturer of the bread wrapper, and finally, the store that sells the manufactured loaf. Who pays the taxes on those seven operations? You guessed it — or did you?

The worst of those embedded taxes is the payroll deduction tax.

That is money that’s withheld from wage-earners, even those who live below the poverty line. By eliminating those embedded taxes, wage-earners will take home their entire paycheck — 100% — and set their own tax rate, based on how much or how little they buy.

When The FairTax becomes the law of the land, there will come an economic upturn of great proportions. Outsourced companies will return to our shores. Goods produced in our great country will finally have a level playing field. Even Mr. Olberman will have more money in his pocket.

Dick Grenell
Ashby, MN


All active news articles