Your Opinion: All will benefit from Fair Tax
Tuesday, July 17, 2012
In her letter to the editor (“Fair tax for who?”), Judy Baumgartner said that she could not get an answer to how the FairTax will benefit most seniors and middle- and low-income taxpayers. I recommend that she go to www.Fairtax.org, read The FairTax Book by Neil Boortz and John Linder, or go to a local Fair-Tax meeting in Jefferson City or Fulton. In Fulton, the Callaway Citizens for FairTax meet on the third Thursday of every month.
Seniors would benefit from passage of the FairTax by Social Security (SS) being fully funded, SS benefits not being taxed, no tax record keeping or preparation costs, no tax on used goods, a reduction in manufacturers’ costs (allowing lower prices for goods), and no tax on taxdeferred plans.
Because of the prebate, the first $10,830 in spending each year is tax free. A single taxpayer’s prebate would be $2,490 per year (the FairTax on $10,830; U.S. poverty level for a single person), ensuring that no one pays taxes up to the poverty level. Under the current tax code, every wage earner pays $861 in SS and Medicare taxes for that first $10,830 in wages.
Passing the FairTax would allow middle- and low-income wage earners to have the same benefits just listed. No income taxes or 7.95 percent SS and Medicare taxes would be withheld from their paychecks and they would be able to save without tax penalties. Businesses would improve because of lowered tax and compliance costs, thus ensuring more or steady jobs. (Low- and middle-income employees are the first to be cut by businesses.)
Because of lower costs, prices of goods and services would fall, on average, 22 percent. Again, for a single taxpayer, the first $10,830 in spending would be tax free. With the prebate, a family of four would pay no taxes on the first $29,140 of spending. Now, they pay $2,316 in SS and Medicare taxes plus any income taxes for the first $29,140 in wages earned.
All classes of taxpayers and businesses will benefit with the passing of the FairTax. Ask your U.S. Representative to support HR25. There are 70 Representatives co-sponsoring HR25 now.