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Happy New (Tax) Year!1/25/2007
by Bill Krecker
Ah yes, a new year! And what will 2007 hold? Amid the uncertainty, there is a sure thing. Most of us will be paying taxes and a lot of them!
Did you know that in 2006, Americans labored a total of 116 days (almost a third of the year) to pay their federal, state, and local taxes? This was like working until April 26 to pay the government’s bills, after which you started working to pay yours! A tax watchdog group, The Tax Foundation, called April 26 Tax Freedom Day (http://www.taxfoundation.org/taxfreedomday/). The foundation’s President, Scott A. Hodge, said, “Despite the tax cuts passed by the federal government recently, Americans will still spend more on taxes than they spend on food, clothing and housing combined.”
Do these facts bother you too? Taxes by the federal government on our income, payroll, investments, family estates, and you name it, are perhaps the most troublesome and not everyone is paying their “fair share.” Taxes that are owed but uncollected because of unreported or underreported income are estimated by the IRS at over $300 billion annually. Not very efficient!
Wesley Snipes (of “Blade” fame) is a case in point. The multi-millionaire actor was arrested recently. Officials allege he fraudulently claimed refunds in 1996 and 1997, and then failed to file returns between 1999 and 2006, amassing a $12 million tax debt. If his defense will be that he got bad tax advice, guess what: The U.S. tax code has gotten so complex and confusing that IRS employees themselves are reported to give incorrect advice over half the time. Fair? Hardly!
There is a better way. The FairTax Act of 2007, H.R. 25, would replace the taxing of our income, investments, etc., with a progressive national retail sales tax! Guess how many cars, boats, homes, HD television sets, toothbrushes, etc., Mr. Snipes bought in the last seven years? If the FairTax were law, he would have already paid the federal taxes that were included in the prices of the items he bought.
What about the drug dealers, gamblers, prostitutes, and undocumented aliens? You know they are not reporting their “wages” to the IRS but they do buy stuff, and when they do they’ll pay federal taxes probably for the first time ever!
Those who designed the FairTax realized that it isn’t fair to tax people on necessity items such as food, clothing, and medicine. That’s why the FairTax calls for every registered household in America to receive a check every month to help cover these costs, regardless of one’s income level. The amount of the check is based upon the number of members in the household and the calculated federal poverty level. In this way, lower-income wage earners and their families can be completely untaxed.
People who fully understand the potential benefits of the FairTax are wildly in favor of it. We will still be paying federal taxes, but we would get to choose when we paid them and how much we pay by our buying decisions. Our current system of taxation negatively affects our ability to manufacture and export goods, create jobs, and compete in a global market. (When was the last time you bought something “Made in the U.S.A.”?) It is good for all segments of our society and good for America. We need to be prosperous again. And think about it no federal taxes withheld from your paychecks and no tax returns to file! It is time for our representatives to quit talking about tax reform and do something about it.
Please check it out for yourselves by visiting http://www.fairtax.org or call 1-800-FAIRTAX, and take action. We need to let our representatives know that we want them to support this important legislation on our behalf.