What Is the "Fairest Tax?"

Last week I wrote about some of the things you might want to look out for when you prepare you 2001 tax return. Now, I don't know about you, but I am tired and frustrated with all the changes that occur each year in the tax laws and usually result in an increase in our taxes.

In this column over the next few weeks, I want to introduce you to the Fair Tax. This is one of the most exciting things that has been proposed in a long time. National polls indicate that over two thirds of Americans say they want to see major tax reform. The current system is not friendly to the average American. It is a system that punishes hard work as well as savings and investment.

We must find the best way to overhaul the IRS, or do away with it as we know it today. The latter seems the better wisdom! Enter the Fair Tax. This is an idea whose time has come.

What is the "The Fair Tax"? As proposed, the "Fair Tax Act" would eliminate all income, payroll, estate and gift taxes and would be replaced with a national retail sales tax of 23 percent. The Fair Tax will dramatically reduce prices, protect and ensure funding of Social Security and Medicare, empower the low-income earners and put choice and control back into the hands of every American.

How would the sales tax be split? Adjustments will surely occur if elected officials have any say in the issue, but as it looks now 14.91% will go into the general revenues to pay the "bills of government." The remaining 8.09% will go to Social Security and Medicare. No tax would be paid on products or services purchased for business, investment or export purposes.

Who will collect this tax? The tax will be collected by the seller of the goods and services. The state will remit monthly to the Federal Government if that state currently collects state sales tax already. If the state does not have a state sales tax, the Federal Government will administer the tax.

Lets face it. The current tax code has hidden the true cost of government from the taxpayers who support it. Those that cannot afford to pay anymore are the very ones facing the "penalties of taxation." It's time for a change and time to look seriously at this legislation. The research has been done. There will be more to come.

I'll give you some more facts about The Fair Tax next week. Stay tuned.

http://accesswdun.com/article/2002/6/193927