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End of income tax { August 12 2003 } Original Source Link: (May no longer be active)
http://worldnetdaily.com/news/article.asp?ARTICLE_ID=34039http://worldnetdaily.com/news/article.asp?ARTICLE_ID=34039
End of the income tax?
Posted: August 12, 2003
1:00 a.m. Eastern
© 2003 WorldNetDaily.com
It's in the hopper. In the last Congress, the number was HR2525. This time, it's HR25. When I speak of HR25 on my show, the residual phone calls continue for days. When I talk up HR25 during a banquet speech, the deserts remain uneaten.
HR25 is called the Fair Tax Act of 2003, and its stated purpose is "To promote freedom, fairness and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national sales tax to be administered primarily by the states.
I've been studying and promoting this idea for nearly 17 years. I've debated each and every possible point and objection, and have almost always drawn the opposing party to my side. HR25 has 32 cosponsors and absolutely no organized opposition. This is legislation that would transform our economy and our society for the better, yet this may well be the first time you've heard of it. It's time to bring you up to speed.
Here are the highlights. If The Fair Tax Act were to become law, the following would happen.
The law establishing the federal income tax would be repealed, both for individuals and for businesses.
A constitutional amendment repealing the 16th Amendment would be sent to the states for ratification.
All laws providing for payroll taxes for the funding of Social Security and Medicare would be repealed.
A sales tax would be instituted on the sale of all goods and services at the retail level. This retail sales tax would replace all payroll and federal income taxes.
Government funding would remain at present levels, and no changes would be made to Social Security and Medicare other than the method of funding those programs.
Does the idea sound pretty radical thus far? Stick with me a few hundred more words.
With the passage of HR25, you would receive 100 percent of your bi-weekly paycheck. If you make $1,000 a week, your paycheck would be $2,000 every two weeks. Of that $2,000, you would only pay tax on the money you spend at the retail level. All savings and investments would be tax free. Any money you spend at the retail level would carry a 23 percent sales tax.
Yikes! Did that man say 23 percent? Yeah, I know. It sounds awfully high, but here are some points you need to consider.
First, there are the embedded taxes on every single product or service you purchase at the retail level. Harvard economists have estimated this embedded tax to be around 22 percent of the cost of those goods. That 22 percent represents the payroll taxes and corporate business and income taxes paid by every manufacturer, shipper, wholesaler, merchandiser and retailer having any connection whatsoever with the product you have purchased. These taxes are all added to the cost of consumer goods.
As soon as these taxes vanish, economists agree that competitive market pressures will immediately cause prices at the retail level to fall. So, we almost have a wash here. The prices decrease by over 20 percent, and you start paying a 23 percent sales tax. Remember, though. You brought home 100 percent of your paycheck, and every dollar you don't spend at the retail level remains untaxed.
But what about the poor? They're not really paying federal income taxes anyway, so this big sales tax is really going to hit them hard, right?
Wrong. The Fair Tax Act provides that no family, rich or poor, will pay sales taxes on the basic necessities of life. The cost of these basic necessities is set at the federally determined poverty level for various sized families. At the beginning of every month the head of every household in America will receive a check, or an electronic credit to their bank account, in an amount equal to the sales tax they would pay on the basic necessities for their sized family. This provision is completely neutral as to income, so class warfare political rhetoric becomes useless.
HR25 has friends in high places inside the Beltway. When briefed on the idea, Vice President Dick Cheney told Congressman John Linder: "This needs to be put before the president." Commerce Secretary Don Evans, after being briefed, asked Linder: "Why haven't you passed this?"
And just why hasn't it passed? Because the idea is so bold that many politicians, while personally praising the concept, just assume it can't pass.
It can pass, my friends. It can pass if the people of America learn the details and then let their elected officials know that they want some action. If you have the slightest interest, just go to the website for Americans for Fair Taxation. Every detail is covered, every question is answered.
If America is now ready to accept the possibility of the Red Sox winning the World Series, we can certainly support an idea as daring as the Fair Tax Act.
Neal Boortz is an author and nationally syndicated libertarian talk-show host. Full disclosure compels him to reveal that he is also a "reformed" attorney who is being paid massive amounts of money in exchange for his promise not to actually practice law any more.
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