'Fair tax' also has homegrown fans

NJ.com

To the Editor:

Joseph Bastrimovich (letter, Jan. 24) complains that all of the letter writers who defend the “fair tax” come from northern New Jersey, so I thought I would satisfy him by writing from my home here in Woolwich Township, where the Gloucester County Times circulates.

Let me state right from the outset that I am the volunteer District Director for the Fair Tax here in the Second Congressional District of New Jersey. Hence, nobody is paying me to promote the fair tax . Furthermore, I do not know whether I would benefit directly and personally from it.

Having said this, I promote the fair tax because — for good reasons — I truly believe in it and what it can do for the United States

Bastrimovich is absolutely incorrect with respect to one very important point in his argument: The wealthy do not get a windfall from the fair tax.

On the contrary, it is actually the lower-income and middle-income citizens who would benefit disproportionately from the fair tax.

First, the fair tax proposal (a type of national sales tax) eliminates payroll taxes — which are highly regressive. Second, the fair tax eliminates other tax costs embedded in the price of everything you buy and every service you use — which hit the poor the hardest. Third, The fair tax is made progressive through a “Family Consumption Allowance,” or “prebate,” which reimburses every household in America that has a valid Social Security number, in advance, for tax on consumption of essentials up to the poverty level.

Everyone benefits from this allowance, but the poor benefit the most.

Finally, economists measure how regressive taxes are by using remaining lifetime resources, while politicians measure taxes using a single year’s income.

When you tax a corporation, who really pays the tax? Look in a mirror. Profitable businesses pass tax costs onto consumers. Or, they pay lower wages, produce shoddy goods, or reduce dividends to union pension funds. Or, the businesses send jobs overseas.

With the fair tax, corporations would send products overseas. The fair tax treats Fortune 500 corporations the same as mom-and-pop businesses. Big businesses and industries, which can afford lobbyists, no longer have an unfair advantage under the fair tax. And the same goes for wealthy people.

In conclusion, I would respectfully request that Bastrimovich take a second, closer look at the merits of the fair tax as the best alternative to the current tax code.

- Randy Poulson, Woolwich Township, NJ

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