The New Year brings new beginnings and new opportunities. Tax reform is coming and the FAIRtax is better positioned than it has ever been. It’s time to get to work.
It is likely that the next president will be a Republican. Hillary Clinton is best positioned to be the Democrat nominee, but the political environment is not conducive to rewarding more of the same.
We choose our President based on our comfort level. When the nation thinks we are heading in the right direction they choose more of the same. When the people think we are on the wrong track America votes for change.
Irrespective of Hillary Clinton’s role in our current circumstances, 66% of America thinks we are on the wrong track compared with 24% who think we are going in the right direction.
Terrorism has raised its ugly head once again, and our economy has trapped too many in dead-end jobs with no hope for advancement.
That is a steep hill to climb.
Every Republican candidate has a tax reform proposal aimed at broadening the tax base and simplifying the code. Mike Huckabee introduced the FAIRtax and none of the other proposals can even compete with it on either of those two fronts.
The criminal activity of the IRS, while ignored by this administration, is still fresh in the minds of most Americans. The next administration will be under immense pressure to fix this mess once and for all.
The IRS cannot be “fixed.” It must be abolished.
While some tax reform proposals promise to eliminate the IRS, if they still propose to tax income they are blowing smoke. Taxing income will require a federal agency to audit the process by which we arrive at “taxable” income. They can rename it, but they can’t do away with it.
The FAIRtax is the only proposal that has no need for a federal agency at all.
Some proposals include a new tax on consumption by adding a Value Added Tax. When the debate between the VAT and the FAIRtax occurs, the FAIRtax wins hands down.
The VAT tax rate is easy to increase and expensive to comply with. Each of the thousands of businesses involved in car manufacturing, from rubber tree plantations to iron ore mining to oil exploration, must keep records of all purchases, depreciation schedules and taxes paid. Those compliance costs go into the price system.
Thus, the VAT burdens the auto manufacturing industry more than, say, software, which has fewer suppliers and less of a compliance cost burden.
The FAIRtax eliminates all compliance costs and treats all businesses equally.
Next month will be the seventh anniversary of the trillion-dollar stimulus package which promised to get America back to work. It has failed. There are currently 94 million Americans out of the workforce.
Every economic model shows that taxing consumption rather than taxing income is the best way to create jobs and grow the economy. The FAIRtax is the only pure consumption tax being considered.
Obamacare has crippled job creation, causing businesses to have fewer employees and more independent contractors.
As the number of independent contractors increases so does tax avoidance. Tax evasion reduces revenue to the federal government by over $500 billion per year and is growing. The FairTax fixes that.
Under the current system you can cheat on your taxes all by yourself and it is likely that nobody will ever know. The FAIRtax requires two people to conspire to cheat: the buyer and the seller. Perhaps you have a friend willing to risk jail to help you save a few bucks on taxes. I have none.
If we had been under the FAIRtax in 2012, 10 percent of all corporations in America would have collected 89 percent of all the taxes on goods. These are big corporations with totally computerized ordering and sales systems. It would be difficult for them to help you cheat even if they were inclined to do so.
In the services sector just 1.2 percent of all firms will collect approximately 80 percent of all the money. They are mostly in the healthcare industry and risk losing their license to practice if they cheat.
Most of the small companies will comply with the law and collect the tax, but if they all avoided the tax we would still have a better collection rate than we currently have with 90,000 IRS agents enforcing a 74,000-word code.
As the New Year begins the planets are all in line. The next president has promised tax reform. The Speaker of the House is committed to reforming the tax code. The current chairman of Ways & Means, Rep. Kevin Brady from Texas, has been a co-sponsor of the FAIRtax for years.
The only piece of this puzzle not entirely in place is yours. The FAIRtax currently has 81 sponsors in Congress. Is your representative or senator one of them? If not, why not?
Reintroduce yourself to your senator or representative early in the New Year. Politely let them know that you know how to put a fire under this economy.
This is our time!
(In addition to writing about the FAIRtax from time to time I also write regularly for TheBlaze. I write on government, politics, old dogs and children and watermelon wine. If you would like to be included on my distribution list please send your email address to: firstname.lastname@example.org or follow me on Twitter: @linderje)