Fair Tax benefits
A recent Letter to the Editor regarding the Fair Tax bears expanding.
Implementing the Fair Tax includes repeal of the 16th Amendment to revoke the authority of the federal government to tax income while still generating the same amount of revenue to run the government.
The Fair Tax eliminates and replaces all current federal payroll deductions. It is a consumption tax rather than a tax on earnings. It is a tax on retail sales of new products and services. It eliminates all business-to-business taxes and all of the inscrutable income tax codes.
1. Every household (not just those below poverty level) gets a prebate to cover the tax on basic commodities required based on a poverty level household: to assure that every household can pay the taxes on essentials. For example: Single Adult household with three children, $451 per monthly prebate. 2. Two adult household with three children, $672 per month prebate
The cost of the prebate to every American household is less than 50 percent of the cost of currently permitted and claimed income tax deductions that favor the wealthy more than the poor.
2. By eliminating taxes on exports, American products automatically become 23 percent more competitive in global competition, thereby creating more jobs in America. American products become even more competitive by eliminating the billions of dollars in non-value-added costs imposed on producers for income tax liability tracking and tax payment.
3. Taxes are paid only once on an item when it is sold for the first time. Used goods have no tax.
4. By eliminating tax loopholes and by applying tax on all new purchases, everyone pays commensurate with their spending. Legal and illegal proceeds cannot be hidden and are taxed when spent.
The Fair Tax puts citizens in control of their tax liabilities, not the government. Taxation and the IRS could no longer be used as political weapons by corrupt officials; while at the same time American products and services become substantially more competitive, and again, creating more and better jobs.