Saturday, May 14, 2011

FairTax.org

"The income tax has made more liars out of the American people than golf has." - Will Rogers


Feature Article
“Thank you for contacting me about federal tax reform. I value your opinion and agree we need to replace our current tax code...”

This is a typical Congressman's form response when contacted about tax reform. The good news is that even Washington has finally recognized our tax code is broken!

So the question is, what should replace the system we - meaning tax accountants - know today?

The leading contenders are the “Flat Tax” and the FairTax. Here are details on how they measure up.

The Basics – The leading flat tax bill before Congress (HR 1040) would remove portions of our tax code and offer a onetime choice for individuals to stick with our current tax code or switch to a 19% income tax with a standard deduction. The FairTax is a voluntarily progressive, national sales tax that eliminates our federal tax code, including payroll taxes, and its comparison rate of 23% is only on new goods and services beyond the poverty line.

Your Wallet – An income tax rate you can understand is very appealing but the flat tax keeps the regressive payroll taxes that are also withheld from your paycheck every Friday - and the IRS to make sure it happens. The FairTax only applies when you choose to consume so you can invest, save, donate and buy used goods with no taxes! Plus, Uncle Sam doesn’t even need to know about your habits every April. Consider this: If you want to pay less taxes, spend less (or buy used) under the FairTax. You can control your tax rate!

The Economy –A flat income tax choice would be better for our economy just for the reason that as more people switch over, the hundreds of billions Americans spend each year figuring out their taxes would shrink. It also reforms corporate taxes but is not border adjusted like the FairTax - critical to the Made In America label and bringing back lost manufacturing jobs. The FairTax has over $20 million in research behind it plus 80 economists’ endorsement. All the fundamental questions are answered and the latest findings are powerful. If you want a higher wage, more disposable income, a growing economy and increased charitable donations, you want the FairTax! Forms of flat taxes have worked moderately well in other nations but for comparison, US states who rely the most on sales taxes right now are ahead by several measurements versus income tax heavy states.

Remaining Flat or Fair – This is critical. A key advantage of the FairTax is that it’s simple and very visible. The key disadvantage to a flat tax is that it’s still an income tax! The majority of lobbyists in Washington are there for taxes and they’ve seen “reform” before. In fact, “flat” tax bills have been introduced after talking to lobbyists about what loopholes to keep! The bottom line: A flat income tax, like the one we had in 1913, would only be temporarily flat while one sales tax rate at the cash register is DC’s worst nightmare.

Grassroots Support – Time after time the FairTax has doubled or tripled the flat tax in online polls but other indicators are The FairTax Book is ranked #79,557 in Amazon.com sales, vs #238,401 for Steve Forbes' Flat Tax Revolution. The FairTax has a supporting website and a strong volunteer organization that produces events, speakers, community outreach, party platform planks and countless letters to the editor. Only a few special interest groups regularly try to excite members about a flat income tax over the FairTax. Americans want to keep their paychecks and not the IRS!

Political SupportHR 25, the FairTax, has 61 House co-sponsors and is bipartisan. HR 1040 has 9 Republican co-sponsors. Steve Forbes' presidential campaign in 2000 began the GOP embrace of a flat income tax but the FairTax organization and its volunteers' efforts are non-partisan - uniting Americans across the aisle against the self interests of Congress. In addition, the last presidential primary season saw no less than 7 candidates (bipartisan) support or campaign on the FairTax while no one stumped for a flat income tax.

To be fair, any sort of flat income tax option would be much better than the horrendous code we suffer under now. But the FairTax is a clearly better choice for our nation and your supportive efforts.

For a quick overview, download this chart that compares the current system, the FairTax and the flat income tax. To study the issue more in depth, we have a great research paper contrasting them here.

Please also vote in this Facebook poll so your friends will see your preference!

Lastly, forward this to anyone who knows we need a new tax code or is a flat tax supporter so they can compare both systems.

Thank you!

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