The Fair Tax Plan makes sense
The panel's recommendations must be revenue-neutral – meaning they must generate the same amount of revenue as the existing code. So what revenue the AMT elimination taketh away, the other recommendations must replenish.
For a truly revenue neutral plan that truly simplifies the tax system, H.R. 25 would be a much better way to go:
The FairTax plan is a comprehensive proposal that replaces all federal income and payroll taxes with an integrated approach including a progressive national retail sales tax, a rebate to ensure no American pays federal taxes up to the poverty level, dollar-for-dollar revenue neutrality, and the repeal of the 16th Amendment. This non-partisan legislation (HR 25/S 25) abolishes all federal personal, gift, estate, capital gains, alternative minimum, Social Security, Medicare, self-employment, and corporate taxes and replaces them all with one simple, visible, federal retail sales tax -- collected by existing state sales tax authorities. The FairTax taxes us only on what we choose to spend, not on what we earn. It does not raise any more or less revenue; it is designed to be revenue neutral. So it is also cost neutral -- the final cost for goods and services changes little under the FairTax. The FairTax is a fair, efficient, transparent, and intelligent solution to the frustration and inequity of our current tax system.
More about the Fair Tax:
And we should finally expect to see a major review of the Fair Tax Book this weekend, accord to Neal Boortz:
The more I read about the president's so-called tax reform panel the worse it gets. Essentially, the panel has done exactly what critics said the panel would do ... propose tax increases for the evil achievers. You already know that the panel wants to cut into the home mortgage interest deduction while leaving the income tax in place. But ... did you know that the panel has recommended eliminating ALL interest deductions on all home equity loans and loans for second homes?
This is a repeat of what we saw in 1986. Almost 20 years ago the congress eliminate a huge cache of tax deductions and established two flat rates, 15 and 25%. The tax code has now been modified and amended about 10,000 times since then, leaving us with the monster we now have. This "reform" plan is essentially the same. Eliminate more deductions, raise taxes on businesses and the repugnant rich, create some "refundable" tax credits, and set some flat rates. It leaves the income tax in place and the K Street lobbyists inside the beltway licking their chops. As soon as the panel's suggestions become law they would go right to work trying to carve out specific tax breaks for their high-paying clients. Right behind the lobbyists you'll find the Democrats renewing their efforts to shift the entire tax burden onto America's high-achievers with bill after bill and amendment after amendment, all in the name of reform.
Reform? This is not reform. This is, pardon the cliché, just rearranging the deck chairs on the Titanic. The IRS? Still there. Social Security and Medicare taxes? Still there. Business taxes will still be there and they will still be passed on to the consumer through the pricing structure.
The good news is that there is renewed interest in The FairTax Book and H.R. 25 with the impending release of the tax reform panel's report. I'm told there will be a review of the book in the The New York Post this coming Sunday, and on November 6th there will be a review of The FairTax Book in the New York Times. I have no real idea what to expect from the Post, but I think it's probably safe to say that The New York Times will not exactly be a fan of the plan. When, after all, was the last time you saw the New York Times back any initiative that actually transferred power from the government to the people?
Here's one thing I do expect from the Times review. They will change the terms of H.R.25, the FairTax Act, and then critique the plan as they wrote it, not as it is actually written. This has been the favorite techniques of those who want to keep our present tax system, and my guess is that the Times will follow suit. To amplify my prediction -- the Times will create exemptions to the consumption tax -- and then write that the actual sales tax rate would have to be much higher. They will ignore, for the most part, the monthly "prebate" under the FairTax Act. Maybe it's just me, but wouldn't it be more fair to review and critique the FairTax Act as it is written, instead of rewriting the bill and then critiquing your rewrite?
I've been telling you on the air, and Congressman Linder and I told you in the book that the lobbyists were going to react with full force once they saw the FairTax as a threat to their livings. Now there's a prediction that has more than come true. Listen today for more details on lobbyist tactics to kill meaningful tax reform.