A major pet peeve that I have is the expense necessary to determine how much income tax needs to be paid. This is in addition to the time and energy it takes to get the necessary information. Then there is the fear of something getting overlooked, which could end up causing a penalty. In many ways our system of paying income tax is highly unfair.
There is a grassroots movement that is taking place to change the present system with a fair tax. One of the first advocates of the Fair Tax has been Bill Phelps, a native of Nevada and a former lieutenant governor of Missouri. It has been a few years now since he told me that he was working on this proposal.
I have had the opportunity to hear Jerry Wadel, a local Fair Tax advocate to present information about Fair Tax at two meetings. Before I heard him speak he visited with me in person about the proposal. It is good to find out what is proposed whether you believe in it or not, at least to become informed. If you have an opportunity to hear Jerry or another advocate you will want to take advantage of the opportunity. You will conclude that Jerry is passionate about changing to the Fair Tax.
According to information on the website, www.FairTax.org: "The Fair Tax Act (HR 25, S 296) is nonpartisan legislation. It abolishes all federal personal and corporate income taxes, gift, estate, capital gains, alternative minimum, Social Security, Medicare, and self-employment taxes and replaces them with one simple, visible, federal retail sales tax administered primarily by existing state sales tax authorities."
The Fair Tax is also being proposed for the state of Missouri. It passed the house, but did not receive a vote by the Senate. If the state legislature approved it, a vote by the voters would be required as the state constitution would need to be amended for it to become legal. There are other states that are considering the Fair Tax. With Missouri in the lead with its proposal, the other states are watching Missouri.
If the Fair Tax becomes a federal law as it is being proposed, it would eliminate all income taxes for individuals and corporations, eliminate all federal payroll withholding taxes, abolish estate and capital gains taxes, and repeal the 16th Amendment. According to a group of advocates who are economists or hold leadership positions if passed into law the Fair Tax plan would: enable workers and retirees to receive 100 percent of their paychecks and pension benefits; replace all federal income and payroll taxes with a simple, progressive, visible, efficiently collected national retail sales tax, which would be levied on the final sale of newly produced goods and services; rebate to all households each month the federal sales tax they pay on basic necessities, up to an independently determined level of spending (poverty level, as determined by the Department of Health and Human Services), which removes he burden of federal taxation on the poor and makes the Fair Tax Plan as progressive as the current code; collect the national sales tax at the retail cash register, just like 45 states already do; set a federal sales tax rate that is revenue neutral, thereby raising the same amount of tax revenue as now raised by federal income taxes plus payroll withholding taxes; continue Social Security and Medicare benefits as provided by law; only the means of tax collection changes; eliminate all filing of individual federal returns and eliminate, the IRS and all audits of individual taxpayers -- only audits of retailers would be needed, greatly reducing the cost of enforcing the federal tax code.
Other points of what the Fair Tax would do if the federal law is passed: allow states the option of collecting the national retail sales tax, in return they would be paid a fee, along with their state and local sales tax; collect federal sales tax from every retail consumer in the country, whether citizen or undocumented alien, which will enlarge the federal tax base; collect federal sales tax on all compliance costs paid business at a disadvantage in world markets; dramatically reduce federal tax compliance costs paid by businesses, which are now embedded and hidden in retail prices, placing U.S. business at a disadvantage in world markets; bring greater accountability and visibility to federal tax collection; attract foreign equity investment to the United States, as well as encourage U.S. firms to locate new capital projects in the United States that might other wise go abroad; and not tax spending for education, as expenditure on education is defined as an investments, not consumption, which will make education about half as expensive for American families as it is now.
In one flyer it says, "The Fair Tax is simple, transparent and fair, the tax base is expanded, special favors for tax lobbyists end and April 15th becomes just another spring day."
Supporters of the Fair Tax advocate it as a way to restart the American economy.