June 27, 2005

A Fair Tax

Way back in December I wrote a post about a proposal for something called the Automated Payment Transaction Tax as a replacement for, essentially, the entire federal tax code. A reader has posted a new comment there today that I thought worth bringing to your attention...

The commenter, who blogs here, writes:

There's a much better proposal than the APT - the FairTax (H25 and S25 in the US House and Senate, respectively.

It's better than the APT because with the FairTax everyone who holds a Social Security card gets a monthly rebate to assure that they don't pay taxes at all up to the poverty level. In 2005, that's $183 a month for a single person. That assures that the truly poor pay no tax.

The FairTax gives everyone 100% of his/her pension or paycheck, repeals the income tax, social security taxes. corporate and employee taxes, capital gains and more yet still funds the US government at current rates.

Prices go down when those taxes are repealed because companies will no longer pass them along to customers. Paying the FairTax on every new item or service (used goods are not taxed) comes out about even, so we don't pay more.

Unlike the other tax proposals being considered now, the FairTax was developed and tested over a period of ten years by economists from Harvard, Rice, MIT, Stanford, the Cato Institute and others, so it's a serious, well-tested program rather than something dreamed up by professors or congressional lobbyists or tax aides.

The commission, by the way, has been given an additional two months to consider proposals, so don't expect the report as originally scheduled.

Learn more about this proposal that is enjoying massive grassroots support at www.fairtax.org.