Since the publication of “The FairTax Book” by a radio announcer (who is paid to recommend products on his radio show) there are people who believe all of its claims, perhaps because of its concocted name and its one-sided claims. This “FairTax” was rejected by President Bush’s economic advisors in 2005, but continues to pop up again like a monster in a horror movie.
The “FairTax Book” failed to present any dollar figures for its claims, because the facts would refute their claim of “fairness”. The book only deals with percentages, not money figures, and plays fast and loose with its “exclusive / inclusive” percentages. The book first calls it a 23% tax, but later admits it’s a 30% tax. The book admits that the embedded tax actually varies according to each product but wants this flat tax on everything. The authors never testified before a Congressional Committee about their plan, where they could be questioned about its origins and effects.
The National Sales Tax is like an internal tariff that is applied to almost everything. It does not apply to sales of stocks, bonds, financial instruments, and existing property ownership. This is a free pass to the super-rich who reportedly own over 75% of the wealth in this country. If it was only applied to imports that could balance the budget, create more jobs, and end exporting jobs overseas. Now that would be a Fair Tax! The book claims that the rich spend more and will pay higher taxes, which is an argument for a graduated income tax.
The so-called “FairTax” is a very regressive tax to oppress most people with higher taxes. A 30% tax on food, drink, electricity, oil and gas, property taxes, services, etc. would prove intolerable. Now only those with an income over $350,000 pay a 30% income tax. This “Fair Tax” would lower taxes on the super-rich and raise taxes on everyone else (because it would not tax the dividends, interest, royalties, etc. received by the super-rich). Who wants that?
Someone earning $43,000 (the median wage) would pay $9,923 on the $33,077 spent with a 30% sales tax. The income tax on $43,000 could be $4,633, less than half of the “Fair Tax” amount! Just do the arithmetic on your calculator to learn the truth for your situation. Some might say this doesn’t include that promised monthly “prebate” from a monthly tax return, but I predict that monthly check would shrink the first time Congress needed more money. The claim about not taxing “used goods” is meaningless. There is no market for used food and drink, used haircuts, used gasoline, etc. You would pay this 30% surtax on property taxes, as if they aren’t high enough already! Your medical bills and prescription drugs would also have this new tax.
Ronald A. Sobieraj
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