Viewpoints: Letters / Opinions
Why I Graduated from the Flat Tax to the FairTax
By James M Bennett
September 09, 2014
Tuesday AM
Dear Editor,
Mr. Eldridge's letter (September 3, 2014) calling for a 10% "tithe" tax is a variation of the flat income tax from which I have graduated. While a flat income tax would be an improvement to today's tax code, there are seven principal reasons why the FairTax(R) is a better idea. The FairTax(R), to recap, replaces Subtitles A, B, and C of the Internal Revenue Code with a national tax on all services and all new tangible goods sold at retail to a consumer in the United States - no exceptions. The rate is 23% tax-inclusive (30% tax-exclusive).
The FairTax(R) brings in at least as much revenue as the taxes it replaces and leaves the spending side of the federal ledger intact. The FairTax(R) phases out the IRS over a three-year period and requires records needed to administer the "ABC" taxes to be destroyed - except those needed to calculate Social Security Benefits and to support ongoing litigation. A Family Consumption Allowance from the Social Security Administration assures that no household whose members are lawfully in the United States pays tax on essentials.
Here are the seven reasons why the FairTax(R) tax is a better idea than any flat income tax:
1. The FairTax(R) puts Social Security and Medicare on a funding base that is twice as large, 31% more stable and growing. The flat tax does nothing for Social Security and Medicare.
2. The FairTax(R) facilitates responsible budgeting because its tax base is more stable. The Flat Tax continues the cycle of overspending in times of economic expansion and failing to cut back in times of recession.
3. The FairTax(R) stops the taxation of exports and reinvested earnings. The flat tax continues to tax these items and hampers economic growth.
4. The flat tax is a harder political sell because it does not get at wealth. The The FairTax(R) taxes wealth at the point in time where it is voluntarily consumed.
5. The flat tax is likely to morph right back into today's Leviathan of a code. The flat tax keeps the IRS. The The FairTax(R) makes it harder for Congress to re-introduce the income tax because it dismantles the IRS and sunsets in 7 years if the 16th Amendment to the Constitution is not repealed.
6. The flat tax increases the likelihood that we could end up with BOTH an income tax and a VAT. The The FairTax(R) makes that likelihood very remote.
7. The The FairTax(R) taps the underground, illegal and shadow economies at the point where those classes of people consume. The flat tax does nothing for the underground, illegal and shadow economies.
James (Jim) M Bennett
james@jamesbennett.com
Summit, New Jersey
About: "National Secretary and member of the national Board of Directors of Americans for Fair Taxation"
Received September 04, 2014
- Published September 09, 2014
Related Viewpoint:
 The FairTax’s Propaganda Hides its True Implications By Stephen C. Eldridge
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