Tuesday, July 04, 2006

Way OT: Independance Day Resolution

Well, I've finally done it. I've found a political issue that I care enough about to actually become an activist for. I think it is of interest to nearly every American and can be a unifying goal for the increasingly extreme positions of both political parties. It's called the Fair Tax.

It's not an additional tax, it's a replacement for the existing mess of regulations that make up the federal income tax system. As such, it is revenue neutral to the government and does not deal with specific issues, such as which Federal programs are necessary or not. That's a different battle. It simply changes the manner in which we fund our Government's activities.

It replaces all federal income taxes including, personal, estate, gift, capital gains, alternative minimum, Social Security, Medicare, self-employment, and corporate taxes.

In their place would be a roughly 23% sales tax on all goods and services. Before you freak out and think that everything would be immediately 23% more expensive, consider this. Costs to produce all goods and services would have all of those payroll taxes from every step in the production cycle removed. There is every possibility that the prices we actually pay would remain roughly the same. And the amount you earn in your paycheck would be the amount you take home.

There are huge benefits to international trade. The cost to produce American goods would immediately drop over 20% (it varies a bit by industry becuase of the depth of the supply chain).

Because there is no corporate income tax, the United States would become a tax haven for foreign companies. That means jobs here plus foreign investment. American labor becomes much more competitive internationally because of the reduction in cost.

And April 15th becomes just another nice spring day. You would never have to file another income tax return.

Sound good so far? Well, it gets even better. In order to aid those poor people in this country living at or below the poverty level, each household would receive a pre-bate of the taxes on purchases necessary to survive at that level. It's paid each month. A single person household would receive $188/month, a married couple $376, etc. Everybody gets this prebate, not just the poor. This is to ensure that no American has to pay the fair tax on the basic necessities of life. That's fair.

There are lots of other positive rammifications of this approach, so if you want to learn more, you can visit the website at http://www.fairtax.org to learn more, or pick up the book that's floating around on the bestseller list, "The Fair Tax".

For me, this will be my one and only litmus test in future elections. I'll vote for anybody supporting this tax system regardless of party and I won't vote for anybody not supporting it.

I know I have only touched on a few points here, so I hope you'll take a look at it in more detail before you decide one way or another.

I think I have a few phone calls to make ;)