Republican candidates Herman Cain and Rick Perry have offered their proposals for tax reform. Cain proposes his 9-9-9 and Perry his 20% flat tax proposal. However, neither plan is fair or viable nor does it abolish the IRS. A national consumption tax as described in the Fair Tax Act, first introduced in 1999 and is a major contender in the tax reform debate, is a better option.
If legislated, the Fair Tax Act would replace the federal income tax. It would eliminate payroll income taxes (including Social Security and Medicare taxes), the alternative minimum tax, corporate income taxes, capital gains taxes, gift taxes, and estate taxes with a national retail sales tax. As the legislation is phased-in, the Internal Revenue Service eventually would be phased-out and would become history. But, of course, to do that the Sixteenth Amendment would need to be repealed.
In addition to abolishing the IRS, Fair Tax legislation would …
Allow workers to keep the total amount of their paychecks;
Allow retirees to enjoy the benefit of all their pensions;
Pre-bate the tax on purchases, such as housing, healthcare, food, and clothing;
Allow American products to compete fairly; bring transparency and accountability to tax policy;
Ensure Social Security and Medicare funding;
Close all loopholes, and bring fairness to taxation.
The Fair Tax proposal has garnered significant support. According to FairTax.org, nearly half of Americans favor replacing the income tax with a consumption tax on new purchases. And, American Thinker concludes that “Political candidates able to deliver a clear and consistent defense of the FairTax, such as Saxby Chambliss (R-GA) and Marco Rubio (R-FL), have successfully overcome attack ads and advanced their careers in the process.”
Senator Rubio said, “I think this is the best of all the plans that are out there … not sure if it’s the political support yet, in Washington we got to keep working on it. But I do believe that without a doubt within our lifetime that — within the near future — we will have an opportunity in this country to do something like Fair Tax.”
Of all the republican candidates’ views on tax reform, at least Cain’s 9-9-9 plan is a three-step process, which in step 3 ends up with a plan “to eliminate the income tax entirely and replace it with a federal sales tax of 23% or more.”
” The FairTax taxes us only on what we choose to spend on new goods or services, not on what we earn. The FairTax is a fair, efficient, transparent, and intelligent solution to the frustration and inequity of our current tax system.”
And, the complexity of an approximate 73,000-page tax code and 900 or so IRS forms would be replaced with a straightforward simple, fair, and good for economic growth 133 page Fair Tax Act, if its volume were as proposed in 1999.
With the abolishment of the IRS and the implementation of a Fair Tax, you would no longer owe anything to the IRS once what you owe has been paid. There would be no wasted time and money for a tax accountant, record keeping, personally completing IRS forms and dealing with the stress of April 15. Invasion of your privacy, the stress of audits, tax liens or garnishment of income will be a thing of the past.