As Lawmakers in Washington try to hammer out a deal to keep America from going over a “fiscal cliff”, Americans are still left to deal with dozens upon dozens of new taxes that will be heaped on them as Obama care kicks in. The current state of the American tax system is, to say the least, problematic. is there another way to collect revenue in such a way that keeps the nation running as it should, while lifting the burden of taxation that Americans are now buried under that will only continue to get worse?
Many think the answer to this could be HR25, otherwise known as the “Fair Tax”. The Fair Tax is non-partisan legislation that would eliminate the current income tax, along with it’s enforcer, the IRS, and create a progressive, national retail sales tax. It would allow American workers to keep all of their take home pay, and also eliminate payroll, estate, and capital gains taxes.
Under the Fair Tax, there are no exemptions, and each household recieves a “prebate” check every month. This check is calculated by how many persons live in a particular household, and poverty level spending. This monthly payment to all legal American households would offset taxes on basic necessities.
In a time of great debate on what and where to cut spending on such things as Social Security and Medicare, the Fair Tax would provide these programs with a larger and much more stable tax base from which to draw. Another advantage of the Fair Tax, is that it ends the era of back room dealing tax favors to special interest and lobbying groups who benefit immensely from the current corrupt tax system.
Today, the United States has the highest corporate tax rate in the world at 35%. The Fair Tax would bring billions of foreign tax dollars to the U.S. economy, and make America the prime spot in the world for foreign investment. This would create much needed jobs, and make American products much more competitive.
In it’s present form, the American Tax Code is a mind-boggling 72,000 pages of rules and regulations. The Fair Tax would save the American taxpayer an estimated $400 billion dollars complying with this behemoth annually. The Fair Tax would raise the same revenue as the current system, while raising wages for working Americans by over 10% in it’s first year.
Right now, HR25 has 70 co-sponsors in the U.S. House of Representatives, and the companion bill in the Senate, S13 has 8 co-sponsors. Perhaps incoming Freshmen in Congress will be able to push this plan just a little bit further along to give hard working Americans a viable alternativeto the current tax system.