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Letters to the Editor

Letter To The Editor: Greenspan Testimony
Posted by on Mar 6, 2005 - 1:30:00 PM

  To the editor of the Canyon News,


        I am writing in response to Allen Greenspan's testimony (before the President's Advisory Panel on Federal Tax Reform) that a consumption tax would be a good alternative to the current income tax system.  To advance another step beyond Greenspan's testimony, I would like to inform you and your readership of the FairTax (www.fairtax.org): a national sales tax to replace the IRS.  Under the FairTax, all purchases made for personal consumption would be taxed, and that's it!
 

       Currently, both people and corporations are taxed based on what the government loosely defines as income.  There are many problems with this form of taxation. Namely, whenever a corporation is taxed, it does one of two things: it will either use an accountant to find every possible means of avoiding the tax, or it will pass the tax onto the consumer.  The end result: WE pay even more taxes.

        For example, if a family decides to get a brand-new (note, buying anything used would not be taxed) 48" t.v. for the living room, they would pay what is currently estimated to be a 23% national sales tax on that television.  Before anyone balks at the idea of paying an additional 23% sales tax, keep this in mind: every component used to
make that t.v. carries a tax with it.  The companies who made the individual parts for the t.v. are taxed, and so is the company that actually assembled the t.v. All merchandise sold in the U.S. contains layers upon layers of taxation built-in, which raises the cost of merchandise by an estimated 22%.  Under the FairTax plan, all those layers of taxation would be eliminated.

        Also, many politicians claim that a national sales tax would hurt those with lower incomes.  HOWEVER, the FairTax plan accounts for this criticism by giving a "prebate" to all families to compensate for the basic cost of living.  Now, I do realize that many consider the income level that defines the basic cost of living to be much too low.  Nevertheless, a single person will automatically receive a prebate from the government every month to total $2,141 a year, which isn't bad at all.  Families, of course, would receive more.

        Most importantly, the FairTax is simple.  For today's income tax, one must hire an accountant or buy a tax program to understand the code. Under the FairTax, all retail purchases are taxed - that's it.

- Clinton Smith


 

I applaud Chairman Greenspan's comments on replacing the income tax with a national sales tax.   I recommend the FairTax - HR 25 and S 25.  Former Secretary of State Jim Baker also testified in favor of a consumption tax at Thursday's hearing.   The most telling part of the Honorable Jim Baker's testimony was that he repeatedly reiterated that
we should move to a consumption tax rather than add it to the existing income tax system.  The implication was that the move should be swift rather than gradual.  I could not agree more.  America is fed up with the income tax!  Adding any more complexity would be a serious mistake.  Let's simplify the tax system and replace it with the
FairTax.

The FairTax is the only national sales tax plan which meets both parties and the administrations requirements for a new tax system.  It is a full tax-replacement plan not swayed by the winds of political change which may occur in the future in Washington. It brings transparency to the tax system and even an 11-year-old child can explain it.

Under the FairTax,  No American pays any tax up to the poverty level. The FairTax package has a key component designed to protect the poor, fixed-income, and middle class, where every of resident Americans with legal Social Security numbers qualifies for a rebate.  This makes it unique from any other national sales tax and it makes it progressive! This rebate zeros any tax up to the poverty level, as determined by the Department of Health and Human Services.  For example, a family of four receives $479 per month, rebating all federal on spending up to $24,900.  A couple would receive $357 per month and an individual $178 per month.

Unlike the flat (income) tax or a French value-added tax (VAT), the FairTax replaces the payroll tax and the income tax with a broader tax base that is revenue neutral for the national budget, Social Security and Medicare and allows working families to take home 100% of their paychecks free of federal income and payroll taxes.   Let's not add anymore hidden and complicated tax systems to the current system. Let's move to the FairTax!  To learn more visit www.fairtax.org

Best Regards,

Steve Puma



 

Cliffside Malibu

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Serving Bel Air, Benedict Canyon, Beverly Hills. Brentwood, Laurel Canyon, Los Feliz, Malibu, Pacific Palisades, Melrose, Santa Monica, Sherman Oaks, Studio City, Topanga, Canyon, Westwood & Hollywood Hills.