It's time to dump the income tax

Crain's Chicago

With U.S. unemployment at a persistent 8.3 percent since January and the national economy hovering at a meager growth rate of 1 to 2 percent, it is clear that American business needs a boost.

There is much national debate over how to stimulate economic growth — whether to spend or save our way out of debt. However, no one seems to be addressing the root cause of the problem — the 77,000-page Federal Income Tax Code that is full of loopholes and contradictions, and which perpetuates inequities that polarize the American people into haves and have-nots.

For a growing number of Americans, the only solution is replacement of the current federal income tax with the FairTax Plan, a federal consumption-based program that taxes citizens on what they spend, not what they earn. The FairTaxis a new, simplified, transparent and utterly equitable system of revenue generation that levels the economic playing field, does away with the IRS bureaucracy altogether, saving $13 billion-plus a year, and brings a $1 trillion efficiency to U.S. business every year.

Since 2000, pursuant to action by its board of directors, the Associated General Contractors of America has endorsed and supported the FairTax Plan. As chairman and CEO of Pepper Construction, I previously served as president of the 30,000-member trade association, which represents the construction professionals who build America. It was through my association with contractors group that I first learned about and became an active supporter of the FairTax…

U.S. exports are expensive, and foreign imports are, at retail, cheap. The FairTax levels the playing field. Under the FairTax, imported goods and domestically produced goods incur the same U.S. consumption tax. With the present system, U.S. companies and workers must pay income tax and payroll taxes, but foreign goods enter the country entirely free of any U.S. tax, other than whatever modest customs duties are levied. The FairTax removes all taxes on exports, restoring the international competitiveness of American manufacturers in the global marketplace.

What all this means to America is the increased availability of funds to apply to debt retirement, positive economic growth and job creation. And growing our economy creates opportunities for young Americans ages 18-29, 1.7 million of whom have been jobless for the past year, the highest unemployment rate for that age group since World War II. This is a generation in danger of becoming a “lost generation,” jobless and without prospects to become productive, contributing members of our society and future leaders of American commerce.

At Pepper Construction, we have a culture of dedicated, hardworking employees and an expectation of making a fair profit for the work we do. Adopting the FairTax will go a long way towards ensuring our future competitiveness, and the competitiveness of our nation.

- Richard Pepper

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