April 25th, 2008 06:51 EST
Is It Time To Consider The 'Fair Tax'
I`m an unrepentant procrastinator who waited until the last moment to file my taxes. The memory of the check I wrote the IRS is still fresh on my mind, this makes me susceptible to any radical tax plan that entails eliminating the IRS.
The income tax not only puts a dent in your wallet, it also scrambles your brain. I attended college and consider myself at least average in intelligence, but when doing my taxes I feel totally inadequate. There must be a system for generating revenue that doesn`t require citizens to be lawyers and certified public accountants.
A liberal, such as myself, generally doesn`t give much credence to "Fair Tax" plans advocated by conservatives like Mike Huckabee and Ron Paul. But in my present pliable state of mind, I`m ready to at least consider replacing the income tax with a fair tax.
A goodly number of law-abiding and tax-paying citizens share my abhorrence of the giant bureaucracy that steamrolls everyone in its way. Even celebrities, who routinely get away with murder, can`t run afoul of the IRS without paying a steep price, as Wesley Snipes recently discovered.
Here is a description of the "Fair Tax" plan from a neutral source (Wikipedia):
"The Fair Tax Act (HR 25/S 1025) is a bill in the United States Congress for changing tax laws to replace the Internal Revenue Service (IRS) and all federal income taxes (including Alternative Minimum Tax, corporate taxes, and capital gains taxes), as well as payroll taxes (including Social Security and Medicare taxes), gift taxes, and estate taxes with a national retail sales tax. The Fair Tax would be levied once at the point of purchase on all new goods and services. The proposal also calls for a monthly payment to all households of citizens and legal resident aliens (based on family size) as an advance rebate of tax on purchases up to the poverty level. The sales tax rate, as defined in the legislation, is 23% of the total price including tax (23Â¢ of every $1 "calculated like income taxes), which is comparable to a 30% traditional sales tax (30Â¢ on top of every $1)."
The fair tax is in the news because of these pending bills; they have picked up 69 sponsors in the House and five in the Senate. The fair tax doesn`t have a chance unless it picks up a lot more support in Congress. It would also help if the leading proponent of the fair tax wasn`t a screwball like Ron Paul.
Since the fair tax isn`t going to be enacted anytime soon, there`s plenty of time for us to learn more about it. Like most Americans I don`t know too much about the fair tax, and in the coming weeks I`m going to educate myself on this important issue.
Meryl Conant has an article in the WCBD Website that quotes accountant Thomas Spade outlining the pros and cons of the fair tax:
"Fair tax supporters say their plan eliminates many problems by doing away with the IRS, federal income tax, social security, and Medicare.
Spade says tax time would be simpler.
`Everyone would know you go make a purchase you pay a tax and you don`t have to pay anything on your income.`
Advocates also say it puts the power in your hands. The more you spend, the more you pay. They believe more people would spend -- and therefore create a more stable source of revenue for the government.
But, spade says there are concerns -- such as discouraging some of the practices the current tax system encourages.
`Some may say that would discourage home ownership. Other people only give to charity because they get a tax break for it,` he said.
Some opponents say it would add stress on people who make too little to even pay taxes now.
Spade continued, `They would have to pay an additional 28 percent or the tax rate on any purchase every time they go get something.`
Flat tax advocates say their plan prevents that with every house getting a monthly check for necessities."
There are many resources on the Web that explain the intricacies and nuances of the fair tax --- google to your heart`s content.
Don`t let the tax stimulus tax rebate check cloud your judgement; the IRS is still a monstrous organization, just ask Wesley Snipes.