FairTax would be great for families and for economy

Who among us would not like to have the IRS abolished?

Presidential candidate Mike Huckabee's win in Iowa has brought an innovative proposal to do just that to the attention of the American electorate. The proposal, called the FairTax, involves eliminating income tax, Social Security tax, capital gains tax, death tax and any other kind of tax in favor of a flat-rate consumption tax or sales tax.
 
By eliminating all taxes but a flat sales tax, we would also be eliminating the embedded taxes that we pay for with each product that we buy. Experts estimate that 22 percent of the cost of each item we buy covers the embedded taxes.
Competition in the free market will bring prices down to reflect a lack of corporate taxes and other taxes that manufacturers have to pay. The proposed rate of the FairTax is 23 percent, so with the embedded taxes eliminated, it would be a wash.

The FairTax would also widen the base of taxpayers. Because anyone who consumes goods would pay taxes, people who previously failed to report their incomes would begin paying their fair share of taxes. This would include illegal aliens and underground industries such as pornography, drugs and gambling.

In order to make a sales tax fair for those near the poverty level who spend a higher percentage of their incomes on consumption, the government would send a rebate to every household of legal residents to cover the amount of sales tax that is paid by families at the poverty level.

Let's recap: Take off the embedded tax, add the FairTax, and our prices would basically stay the same, employees would receive their entire checks with no federal withholding. Think of our purchasing power. The economy would boom like never before. The stock market would be off the charts.

As great as the FairTax could be for the American people and our economy, it will not be implemented without a grassroots effort. We must write, call, e-mail or visit our senators and representatives.

Sen. David Vitter and U.S. Rep. Charles Boustany have expressed support for the proposal. Reps. Rodney Alexander and Richard Baker are cosponsors for HR 25, the FairTax bill. Sen. Mary Landrieu and Reps. Charles Melancon, William Jefferson and Jim McCreary are not in favor of the proposal and need to hear about the FairTax from their constituents at home.

For more information, visit www.fairtax.org or buy The FairTax Book by Neal Boortz and Georgia Congressman John Linder.

Steve C. Barry is a pharmacist who lives in the Church Point, LA area.

 

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