Hats off to Nancy Pelosi! We both support Tax Reform. Will she support the FairTax?
Last month Nancy Pelosi brought up "tax reform" and the idea of a National Sales Tax. That is the second or third time this year she has brought it up. Not to mention President Obama, he brought it up early in the year.
I decided to write the Democratic Party and encourage them to rally behind Pelosi and her push for tax reform. Below is a copy of my letter (some sources were used from here) to all Democratics members of congress:
Attention Legislative Assistants, Legislative Directors, and members of Congress:
Hats off to Nancy Pelosi's attempt to talk about Tax Reform, again last month - pushing the idea of a National Sales Tax.
You see, I am a conservative; I don't support your party. But, I do support tax reform. I know many Republicans do, as well as Independents. Why are you, our leaders stifling on this issue? God knows it is a big task but we can't delay this endeavor. Your constituents need you all (all members of congress) to stick together like glue to get this job done. The effort will produce good fruit, like a booming economy and long-term surplus for generations to come.
With that said, here is what I would like to see:
- Collect National Sales Tax (on goods and services)
- Rid Corporate Taxes (to produce economic growth)
- Rid income tax (to stimulate spending)
That's the short story. But how will this work? Here is a brief list:
- Enable workers and retirees to receive 100% of their paychecks and pension benefits,
- Replace all federal income and payroll taxes with a simple, progressive, visible, efficiently collected national retail sales tax, which would be levied on the final sale of newly produced goods and services,
- Rebate to all households each month the federal sales tax they pay on basic necessities, up to an independently determined level of spending (a.k.a., the poverty level, as determined by the Department of Health and Human Services), which removes the burden of federal taxation on the poor and makes this tax system as progressive as the current tax code,
- Collect the national sales tax at the retail cash register, just as 45 states already do,
- Set a federal sales tax rate that is revenue neutral, thereby raising the same amount of tax revenue as now raised by federal income taxes plus payroll withholding taxes,
- Continue Social Security and Medicare benefits as provided by law; only the means of tax collection changes,
- Eliminate all filing of individual federal tax returns,
- Eliminate the IRS and all audits of individual taxpayers; only audits of retailers would be needed, greatly reducing the cost of enforcing the federal tax code,
- Allow states the option of collecting the national retail sales tax, in return for a fee, along with their state and local sales taxes,
- Collect federal sales tax from every retail consumer in the country, whether citizen or undocumented alien, which will enlarge the federal tax base,
- Collect federal sales tax on all consumption spending on new final goods and services, whether the dollars used to finance the spending are generated legally, illegally, or in the huge "underground economy,"
- Dramatically reduce federal tax compliance costs paid by businesses, which are now embedded and hidden in retail prices, placing U.S. businesses at a disadvantage in world markets,
- Bring greater accountability and visibility to federal tax collection,
- Attract foreign equity investment to the United States, as well as encourage U.S. firms to locate new capital projects in the United States that might otherwise go abroad, and
- Not tax spending for education, an expenditure on education is an investment, not consumption, which will make education about half as expensive for American families as it is now.
The current U.S. income tax code is widely regarded by just about everyone as unfair, complex, wasteful, confusing, and costly. Businesses and other organizations spend more than six billion hours each year complying with the federal tax code. Estimated compliance costs conservatively top $225 billion annually - costs that are ultimately embedded in retail prices paid by consumers.
The Internal Revenue Code cannot simply be "fixed," which is amply demonstrated by more than 35 years of attempted tax code reform, each round resulting in yet more complexity and unrelenting, page-after-page, mind-numbing verbiage (now exceeding 67,000 pages containing more than 3 million words).
Our nation's current income tax alters business decisions in ways that limit growth in productivity. The federal income tax also alters saving and investment decisions of households, which dramatically reduces the economy's potential for growth and job creation. Payroll withholding taxes are regressive, hitting hardest those least able to pay. Simply stated, the complexity and frequently changing rules of the federal income tax code make our country less competitive in the global economy and rob the nation of its full potential for growth and job creation.
Say it ain't over Uncle Sam. It isn't! All of the above has been scrutinized for 10 years now with millions of dollars spent to test the idea of a "national sales tax". The good news, economists found this tax system would be the best in the world. Even more good news, a bill already exists in the House and Senate. The bad news... You, our constituents, haven' given the bills the time of day. Nancy Pelosi, from an American to an American and Republican to a Democrat, I support your idea of the National Sale Tax.
In summary, the economic benefits of the H.R. 25 and S. 296 bills are compelling. They eliminate the tax bias against work, saving, and investment, which would lead to higher rates of economic growth, faster growth in productivity, more jobs, lower interest rates, and a higher standard of living for the American people.
Here is the run down:
The America proposed by the H.R. 25 and S. 296 bills would feature:
- no federal income taxes,
- no payroll taxes,
- no self-employment taxes
- no capital gains taxes,
- no gift or estate taxes,
- no alternative minimum taxes,
- no corporate taxes,
- no payroll withholding,
- no taxes on Social Security benefits or pension benefits,
- no personal tax forms,
- no personal or business income tax record keeping, and
- no personal income tax filing whatsoever.
No Internal Revenue Service; no April 15th; all gone, forever.
I believe that many Americans (from all parties) will favor the H.R. 25 and S. 296 bills, although some may say, "it simply can't be done." Many said the same thing to the grassroots progressives who won women the right to vote, to those who made collective bargaining a reality for union members, and to the Freedom Riders who made civil rights a reality in America.
I urge Congress not to abandon Tax Reform nor the H.R. 25 and S. 296 bills simply because it will be difficult to face the objections of entrenched special interest groups - groups who now benefit from the complexity and tax preferences of the status quo. The comparative advantage and benefits offered by the H.R. 25 and S. 296 bills, are to the vast majority of Americans, is simply too high a cost to pay.
Therefore, I urge Congress to make H.R. 25 and S. 296 federal law, and then to work swiftly to repeal the 16th Amendment.
Most Humbly Yours,