The Honorable (enter Senator or Representative's full name here)
United States Senate OR United States House of Representatives
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RE: Opposed to The Fair Tax Act - S. 122/H.R. 25
Dear Senator OR Dear Representative (enter last name here)
As the nation struggles with ways to make the tax code fairer, the Fair Tax Act is once again being presented as a solution. But I believe it's the wrong solution and urge you to oppose any attempts to enact this plan. This bill is decidedly Unfair because:
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"All free governments are managed
LETTER OPPOSED TO S. 122/H.R. 25
Opposed To The Fair Tax Act
S. 122 by Sen. Saxby Chambliss (R-GA), 8 co-sponsors
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.
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The lowest earners pay the highest rates. Since the first income tax was levied in the U.S., the tax structure has been progressive. The more income you make, the greater your share of responsibility. But this proposal levies the highest tax rates on those who earn the lower levels of income. That's the opposite of fair.
Consumer prices won't decline as promised. We can't trust companies to suddenly slash prices just because their taxes are gone. They're going to find other reasons to maintain higher prices and higher profits. In the end, we'll have inflation along with 30% taxes and lay an even greater burden on taxpayers.
It adds a whole new layer of taxable services. All the services we use in our daily lives will now be taxed. Get a hair cut, pay tax. Consult an accountant or a layer, pay a tax. Even healthcare services are taxes. Who's going to pay the $15,000 tax on a $50,000 surgery? And how much will it cost service businesses to add tax collection to their core competencies?
The tax rate proposed is unrealistic. There's no way Congress will pass legislation that taxes food or healthcare or housing. Therefore, we will have to have a higher tax rate on everything else. Some have said as high as 60%. However, the bill caps the General Revenue rate at 14.91%. So either we have to add other means of raising revenue or we'll fall far short of the money needed to keep government in business.
It gives corporations a free ride. Companies no longer have to pay any tax. By taking business out of the mix, we place the entire burden on consumers. What's fair about that? Without shared responsibility between consumers and corporations, the middle class will continue to be squeezed until it shrinks out of existence - all while top management grows even richer.
The business credit program is complicated. Since companies determine what purchase are untaxed investment or components versus those that are consumed and therefore taxed, the temptation to cheat is significant. And the logistics of managing and overseeing the required rebates could be difficult and expensive for businesses as well as government.
The Family Allowance is ridiculous. Every legal resident will be on the government dole waiting for the monthly check. Worse, we'll create an expectation that government should pay its citizens. And of course, we'll need a whole new government bureaucracy to manage it. So we simply trade the I.R.S. for the Sales Tax Bureau. How is that helpful?
It will hurt charities. Although no one will have to pay taxes on donations to not-for-profit organizations, there will be no incentive for people TO give. That will likely lead to a drop in contributions.
It will make government more expensive. Currently, governments can purchase items tax free but soon States and localities will have to pay tax on everything from fire trucks to cleaning crews. That will effectively raise the cost of all government services.
It takes away key incentives. Tax deductions that encourage behavior are gone so we've lost out ability to reward wise choices. The only incentive in this plan is savings and investment. Not all of us have that luxury.
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In short, The Fair Tax Act will not solve our tax problem; it will simply make it worse. It will shift more of the burden to those who can least afford it, institute yet another unfair bureaucracy and likely increase the costs of goods and services. Your efforts to stop this legislation will be both noticed and appreciated.
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© Voters Voice, Inc. 2013