Flat Tax has Flat Tires for Our Economy; The Fair Tax Supercharges

By: Merrill Bender • Section: Diaries; Redstate.org

Steve Forbes has published a new book called the "Flat Tax Revolution" where he promotes his old 1996 Presidential campaign concept of reducing your Income tax filing to a flat 17% rate and a simple postcard style form.

Mr. Forbes has resurrected from the auto junk yard of tax reform a car that won't run and is easier for special interests to hijack and steal later on. He is trying to inflate the tires of this old reform idea but the engine in this car will not provide enough energy to rev up our economy or go the distance to create quality jobs for American Families.

Mr. Forbes old (Flat Tax)Car is up against John Linder's and Neil Boortz's new Book "The Fair Tax Book" ( New York Times #1 Best Seller) which lays out a well researched Legislative Package which has been fined tuned to provide a Progressive Tax Reform and Tax simplification solution that truly supports American Workers, American Families while supercharging our American Economy in a way that fights outsourcing and brings American manufacturing back to US Shores.

The Flat Tax leaves in place the most REGRESSIVE tax on the working poor and Middle Class. 7.65% is pulled out of the First Dollar and every dollar there after that Average American Families Make. Another 7.65% is paid by their employers and many Economists say that suppresses wages and prevents low wage earners from earning more to suport their families. The Fair Tax eliminates the Regressive Payroll tax and still fully funds Social Security and Medicare.

For many of the same arguments that Steve Forbes presents for supporting the Flat Tax, The Fair Tax does it ten times better. and solves so many more of our tax and economic problems affecting the working poor and the middle class in America. The Fair Tax, Untaxes the poor by eliminating the payroll tax and giving them a true net tax rate of 0%.( with FairTax Prebate)
The Fair Tax is a fully researched and documented package that has already been put into full legislative form and is waiting in the garage of Congress, ready to rev up our economy and give every American Family a raise in take home pay. The AFFT (www.fairtax.org) has spent the last ten years and over 22 million dollars in focus group studies, polls and economic research to see what works well economically and works well for American families.

The better answer to Steve Forbes call for a 17% Flat income tax and keeping a 15.3% total Payroll tax - is The Fair Tax which takes ZERO Income tax and ZERO payroll tax out of your paycheck and allows you to take home 100% of your paycheck in take home pay.

That is actually what will happen under an up to date and ready to go Legislative Package- HR 25/ S25 commonly called the Fair Tax- www.fairtax.org. The Fair Tax Legislation has 37 Congressional Co-sponsors including the powerful #2 man in the House- Congressman Tom Delay.

The original Sponsor of the Legislation Congressman John Linder of Georgia started in the 106th Congress and has included the Bill in the 109th Congress as HR25. Support continues to grow as more people know the facts about the Fair Tax.

Congressman Linder has written a new book with Talk Show host Neil Boortz called The Fair Tax Book, Saying Goodbye to the Income tax and the IRS which outlines in a very factual way the strong economics that support the Fair Tax research and shows how this new simpler retail sales tax is better for American Families, giving them more take home pay even after paying the federal sales tax and buying all the same things they bought the year before under the Income tax.

Mr. Forbes Flat Tax car (Lemon) only eliminates about half of the $225 to $250 billion dollars in tax compliance costs where the Fair Tax eliminates a much stronger 90% of compliance costs. Mr. Forbes leaves 90% of the cumbersome IRS tax code because even under a Flat tax, 90% of the code determines the definitions and calculations of the income to be taxed. Then you tax it at 17%.

Mr. Forbes does not have a group of over 75 nationally known economists writing letters to Congress in favor of his idea. The Fair Tax has that support.

http://fairtaxreform.blogspot.com/2005/04/geter-done-economists-nationwide. html
He also leaves in place a tax code that is more likely to be corrupted by lobbyists and special interests in the future. Lobbyists who will continue to manipulate the code to rob Peter to pay Paul. Under the Lemon Law he should return this car to the used car lot he got it from.

American families want a new tax reform car that is safe and well tested for the economic roads of a new century. Two of our largest states operate their state budgets on a sales tax with no income tax, Florida and Texas.. These 2 States are ranked 15 and 19th in the world for their economic output and a Sales tax works for all their State functions.

The Fair Tax is "Family Friendly Tax Reform" whose time has come. http://fairtaxreform.blogspot.com/2005/02/give-every-american-family-raise. html

The Fair Tax package eliminates all Personal and Business income taxes, payroll taxes, AMT, and Death taxes. Due to these eliminations, prices will drop 22 to 25% and then the Fair Tax replaces them all with a revenue neutral federal retail sales tax on new products and services. Consumers will pay about the same as they do now.

American business and American labor should take strong note of the fact that exports are not taxed; thus the Fair Tax will provide a boom to American manufacturing because American products will be 22% lower in price for sale overseas. We can't compete with low wage countries but we can compete with lower taxes on business, products and services made in America. The result is a boom to the economy and a boom to better paying manufacturing jobs in America.
The Fair Tax Legislative package has been well researched and is well supported in the research section of their web site - www.fairtax.org.

Dr. Dale Jorgensen of Harvard University has researched the economic impact of the Fair Tax. Dr. Jorgensen calculates a 10.5% growth in the economy in the first year of the Fair Tax.
The Tax Reform debate and the research is far beyond the simple discussion of Flat Tax, VAT or National Sales Tax, though some will still go through the motions. A complete package is waitng in the wings ready to go - The Fair Tax.

The Fair Tax is much more than a National Sales Tax, it has additional provisions that result in prices dropping 22 to 25% before you add in their NST. Consumers will pay about the same for products and services as they did before but take home a much bigger paycheck that is 100% free of federal income or payroll tax.

In addition, the Fair Tax has provisions to maintain Progressivity by providing a prebate of the sales tax up to the poverty line to every family. For a family of 4 they receive $479/m for a Couple they receive $357/m. An Average family of 4 making $50,000/yr will have more than $7500 in additional take home pay and after tax purchasing power under the Fair Tax there by making it both progressive and fair. The more you spend the higher your effective tax rate. Supporters say, "Those that Know the Facts Love the Fair Tax". More importantly it is the only comprehensive tax reform proposal that eliminates the income tax and the more regressive payroll tax.

The Fair Tax meets all the guidelines set down by President Bush for his tax reform panel including promoting home ownership and supporting charities.

Steve Forbes has commented on the Fair Tax and misquotes how it works, his biggest error is to try and scare people away form the Fair tax and to his Flat Tax by saying families that buy a $100,000 home will now pay with the Fair Tax $130,000; UNTRUE.

Under the Fair tax the costs to Builders drops the price of the new home from $100,000 to $75,000 ( Economic research proves it); Than you add in a Federal Retail sales Tax of 30% Exclusive (23% inclusive equivalent) The New price will be $97,500. You pay about the Same and the taxes are paid. That Family also took home 30% more in take home pay and can afford that house much more easily than under the Income tax.

In addition, the Fair Tax also meets the 3 standards set by House Minority Leader, Nancy Pelosi in her open letter to the President on Tax Reform sent 12/15/04; 1) Tax Simplification; 2)Tax Fairness(Progressivity); 3) Revenue neutral.

This Car is waiting in the garage gassed up and ready to go. Democrats and Republicans need to climb on board and drive our economy in a positive and new direction with the Fair Tax Legislative package.

The Fair Tax has been built from the ground up, it has been test-driven and shared with many researchers, economists, average Americans and American Organizations.

Supporters include 560,000 members of Americans for Fair Taxation, 350,000 members of The National Tax Payer's Union, and is outlined as a legislative agenda item of the 6 million member American Federation of Farm Bureaus.

The Fair Tax has been fined tuned and polished for the 21st century. It is an economic engine waiting to rev up our economy and send us down the road better able to compete fairly in the global market place and to grow a financially stronger "ownership society" at home.