FairTax offers more freedom, more wealth!

Mike Dickson
April 2, 2006

Please do this experiment with me. Take a look at your last week's pay stub. See that nice big figure on top? O.K. I know it's customary to complain about salaries. See that relatively nice big figure on top? Now look at all the figures below that start eating away at your pay, leaving you with the hungry little number at the bottom. Draw a line through all those pay-stealing numbers and circle your gross pay in red. That's the amount you would receive under the FairTax.

That's right. No deductions for Social Security, no income tax, no payroll tax. No federal tax of any kind. Of course, if you have deductions for health insurance, IRA or any other saving plan, they would remain, as well as any state tax.

It's your money. Why should you have to hand it over to Uncle Sam? O.K. We do need government for some things -- like defense.

But that's not even the point. Under the FairTax, government would still receive the same amount of revenue that it receives now -- from a national consumption tax. Imagine -- no more Big Brother IRS looking over your shoulder, harassing you for every clerical error. No more politicians micromanaging your life by giving you tax breaks if you live your life according to their whims, or punishing you if you don't.

You get to choose when and for what you pay tax. Only new goods and services would be taxed, not income, and not used goods. The poor would still get a break -- in fact, they would be better off, along with most taxpayers and the entire U.S. economy. Every household would receive a monthly pre-bate equal to the taxes on necessities up to the poverty level.

Not only that -- every item would be cheaper, because built-in federal taxes would be eliminated -- so the poor would have more money to pay for cheaper goods. Of course there's no free lunch -- the sales tax would be hefty -- 23 percent. But the benefits would be substantial.

For instance: With the elimination of the enormous, bulky IRS monster, the cost of tax compliance would be drastically reduced. Today, hidden income taxes and the cost of complying with the federal income tax represents 20 percent of all retail prices. Built-in taxes raise the price of everything you buy. Corporations simply pass the cost along to the consumer. With those built-in taxes eliminated, prices will fall.

And that creates another bonus -- increased exports of U.S. products, not U.S. jobs. When products become cheaper due to the absence of built-in taxes, they will be more attractive in overseas markets. That benefits the domestic work force. At the same time, foreign goods would become more expensive, because the FairTax would be applied to them. That would further increase U.S. exports.

The FairTax would also tap a new, unexpected revenue source -- criminal activity. Criminal wealth is currently not taxed, because criminal income, of course, is not reported. But when criminals spend their ill-gotten gain for new goods and services, that money would be taxed. This untapped criminal revenue is conservatively estimated at one trillion dollars.

Finally, the IRS estimates that 25 percent of taxpayers avoid paying their fair share. The FairTax would be significantly more difficult to avoid, less cumbersome, less onerous, and would no doubt encourage more compliance.

Because the FairTax would be, well, fair.

= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =
Mike Dickson is a FairTax supporter. He can be reached at [email protected]
For more information go to: www.fairtax.org or call 1-800-FAIRTAX.
= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =