by Steve King
March 11, 2004
There is a better way to keep Social Security and Medicare solvent, yet still provide the funding for very necessary reform. First, abolish all federal income taxes and the regressive payroll tax, then replace these taxes with the FairTax (HR 25/S 1493), a federal retail sales tax on all new goods and services purchased for personal consumption.
When we shift Social Security funding from a narrow, regressive payroll tax to a broad, progressive sales tax, we are well on our way to resolving the Social Security problem once and for all. One of the biggest problems in fixing Social Security is funding the transition from the mess we have now to whatever the reformed system becomes. With every consumer contributing via the sales tax, rather than a crushing payroll tax on the few, funding that transition is much more palatable.
Who contributes to Social Security under the FairTax? Everyone spending money in America. Teenagers who spend money like water, often without having paid payroll taxes. Tourists visiting our shores. Illegal aliens, who pay few taxes today. The trillion- dollar underground/criminal/drug/porn economy, with participants who really love to flash that cash for expensive retail products. Oh yes, you and I will be contributing through our purchases as well.
How does the FairTax protect those on fixed incomes? In brief, retirees (and anyone else) living at or below the poverty level will receive a rebate that zeros out any sales tax they would otherwise pay. They just have to be residents with a legal Social Security number to qualify. In addition, taxes hidden in the cost of the goods and services are gone. Through these two mechanisms, these segments of American society are honestly and transparently detaxed up to the poverty level. Additionally, the FairTax does not tax used goods, so there is yet another way for retirees to control the amount of sales tax they pay well above the poverty level.
Can we pass the FairTax soon enough to fulfill our commitment to seniors? Do we, the people, the grassroots, make the laws in this country? Women marched in the streets and got the right to vote. Prohibitionists marched in the streets to pass it; Americans voted with their elbows 13 years later to repeal it. Civil rights was won in buses and at lunch counters, and then passed in Congress. Oppressed East Germans took down the Berlin wall brick by brick; they took out communism slab by slab. Need I remind you your congressman's and senators' offices are only a phone call away? Yes, we can pass the FairTax now. But only if you call your congressman's and senators' offices now, and often demanding specifically that they co-sponsor and work to pass the FairTax.
Note: Congressman Steve King represents Iowa's 5th district and is a co-sponsor of HR 25, the FairTax.
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