Our nation’s tax burden consists of, in large part, hidden taxes, which are economic inequities in favor of goods made outside of our country. The Tax Foundation estimates that 30-70% of the costs associated with living and manufacturing goods here in America are attributed to hidden taxes. In contrast, goods made in China do not have such tax burden. Notably, the most inefficient hidden taxes are the income-based-taxes.
Tennessee has no income tax, funding its operation on a consumption-based sales tax. As a result, Tennessee has the following remarkable distinctions: a) Lowest debt per capita in the USA; b) Top 10 for financial strength; c) 4th in long-run solvency, and d) 1st in lowest cost of living. Tennesseans have more real income and buying power than most other states. Nationally, the states with no income-based taxes outperform the states with high income taxes. This is true on every significant performance measure including debt level, deficit spending, personal income growth, employment, state revenue collection and spending levels.
As a country, we have the highest per capita income taxes in the world. Our debt is ridiculous, deficits are at record levels and every social economic class is losing real income and buying power. Hidden income-based taxes drive jobs away, to countries like China and Mexico.
The solution here is that America needs to follow the Tennessee example, and eliminate all hidden income-based taxes and implement a new and much better national tax system, the FAIRtax (FAIRtax.org).
Just like the tax system in Tennessee, FAIRtax taxes consumption and spending but NOT income. By removing all income-based taxes everybody gets an instant pay increase! The poor get the largest break with FAIRtax because there is NO TAX on spending up to poverty line and the rich pay more because they spend more. The plan is also revenue neutral, as it can fund all of the current government programs at the current spending levels, including Medicare and Social Security. To learn more see: https://fairtax.org/about/how-fairtax-works.
Under FAIRtax, imports from countries like China (which is responsible for a whopping $381 billion annual trade deficit for U.S.) will be taxed more, and in contrast, goods made here in America will be taxed less, making our own goods much more competitive globally. As a result, the trade deficit with countries like China will reduce, and all of our manufacturers overseas will now have significant economic incentives to return to America, creating jobs and producing significant economic growth.
Ming Wang, MD, PhD, director of Wang Vision 3D Cataract & LASIK Center, is the CEO of Aier-USA, president of Tennessee Chinese Chamber of Commerce and co-founder of Tennessee Immigrant and Minority Business Group. He can be reached at email@example.com.
Kip Dodson, BS-Industrial Engineering, MBA (magna cum laude), is an entrepreneur, the owner of Dodson Management Consulting and BIGR Media. He is also the state director of FAIRtax of Tennessee, a member of the Tennessee Chinese Chamber of Commerce and the Tennessee Immigrant and Minority Business Group. He can be reached at Kip@BIGRmedia.com.
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