Editorial had no clue as to what the FairTax is
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No comments [ Add Comment ]By DANIEL P. ALSTON
Guest commentary
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he St. Louis Post-Dispatch editorial, reprinted in the Standard-Examiner Jan. 11, "Huckabee's 'fair tax' wonderful for the wealthy, but a disaster for others," exposes the writer's bias toward a "soak the rich" tax philosophy, but it also tells me he hasn't read the legislation.
It isn't Huckabee's "fair tax" -- it is HR25, the FairTax legislation in the House of Representatives with 72-plus co-sponsors (including Utah's Rep. Rob Bishop) from both sides of the political spectrum. The description is an attempt to marginalize the bill when it is the most researched tax legislation that has ever been proposed to replace the income tax. Over $20 million have been spent since 1998 developing a tax system that will address the deficiencies and inequities in the current system, and HR25 -- the FairTax -- is the result.
The St. Louis Post-Dispatch says sales taxes are regressive, which is true. But since HR25, the FairTax, is the least regressive tax solution of any of the current options, including the current tax system (the economic analysis is available at www.fairtax.org), the editorial writer must not have researched the bill. The points about goods being taxed and services not being taxed is true of most sales taxes, but not of HR25. The consumption of goods and services are both taxed at the same rate. All consumption at the retail level is taxed!
The editorial perpetuates the age-old lie that we are "soaking the rich" by taxing the evil corporations and making them pay all those payroll taxes and business taxes and forcing them to spend all that money to comply with the tax code.
Guess What? Businesses don't pay taxes, they add the cost of taxes to the price of their goods and services, and you pay the taxes when you buy those goods. There are extensive studies by well-respected economists (see the Web site and learn for yourself) that estimate that what we pay for goods and services now has 22 percent of the cost resulting from these embedded expenses that are being passed on to the consumer.
This means that payroll taxes and business income taxes are the most regressive (tax applies to everyone equally regardless of income) federal tax we have. Medicare and Social Security withholdings hit every employee equally. Employers have to match the employee withholding so that additional amount, plus any income taxes the business pays and the costs of complying with the tax code, gets added to their prices. Rich and poor pay the same at the grocery store and for all their goods and services, so that embedded tax is regressive also.
If The St. Louis Post-Dispatch editorial writer doesn't like taxes because they are regressive, why isn't he or she upset about our current system? Either he doesn't know what I just said or he has a hidden reason for keeping you in the dark about the truth of our current system.
In summary, HR25 The FairTax eliminates all the federal taxes both visible and hidden that Americans are paying right now and replaces them with a, visible to the person who pays it, consumption tax. Businesses will realize a cost reduction that will allow them to reduce their prices by about the amount of the new 23 percent inclusive FairTax so the actual retail cost will stay essentially the same as it is now but the consumer will see exactly how much of what they are spending is because of federal tax.
Don't take my word, go to the Web site and read the bill and the economic studies and decide for yourself.
Unlike our 60,000-page income tax code, you will be able to understand the few pages that the FairTax requires. There are answers to most every question you could have, and state directors such as me are available to help clarify things if you need it. I am available to educate any group on the details of HR25 the FairTax so you can decide for yourself if it makes sense for America.
Alston, of South Ogden, is a district director of Americans For Fair Taxation (www.fairtax.org). He may be reached at doctoralston@comcast.net.
