50 Reasons I Support the FairTax

(How many reasons can you give for supporting the present IRS tax
system?)

**Those Who Know the Facts Love the Fair Tax**

**www.fairtax.org**

**FairTax and Individuals and Families (Family-friendly tax reform)**

1.  It allows workers to keep 100% of their pay, with nothing withheld
    for the IRS or for Social Security and Medicare payments.

2.  It is revenue neutral with the present income and payroll tax
    system, funding the federal budget at current levels.

3.  It shifts the tax to consumption. Records show that consumption is
    more stable than income, therefore the tax revenue stream is likely
    to be a more stable and predictable amount.

4.  It is progressive, a "prebate" of the tax amount up to the poverty
    level is given to everyone. This means that those spending below the
    poverty level have a net gain because the "prebate" exceeds the
    amount paid in taxes. (Under the present system the working poor pay
    the 7.65 percent payroll tax even if they get a full refund of
    income tax withheld.)

5.  It doesn't tax pre-owned items -- clothes, cars, homes. Only new
    items are taxed when sold by a business to an individual.

6.  It is expected to remove an average of 22% of the cost of American
    made goods by removing the built-in payroll tax (the other 7.65% of
    earnings that employers pay), corporate income tax, and other
    business taxes that are now passed to consumers as an "embedded\"
    tax of approximately 22% due to the cascading of income and payroll
    taxes paid by U.S. employers, at every step of production, to the
    U.S. Treasury. Competition will cause prices to fall by
    approximately that amount, on average.

7.  It allows families to save more for home ownership, education, and
    retirement. An average family making \$50,000 will have \$7,500 more
    spendable income.

8.  It removes the need for formal accounts of the 401(k), IRA, HSA,
    etc., varieties. Anyone, rich or poor, will be able to set up any
    kind of savings or investment account without regard to taxes or the
    government. No special knowledge of tax law is necessary.

9.  It makes educational tuition a tax-free expenditure of tax-free
    income.

10. It eliminates the income tax and the IRS. Members of Congress and
    the public overwhelmingly agree that the current internal revenue
    code is cumbersome, intrusive, coercive, and inefficient.

11. It eliminates 90% of the cost of compliance. American families and
    American businesses waste an estimated \$250 -- \$600 billion per
    year (and countless hours of time) doing the paperwork necessary to
    comply with the current tax code. That is roughly \$1,000 -- \$2,000
    annually for every man, woman and child in the U.S. (Businesses
    typically pass their tax bills and compliance costs on to the
    consumer, i.e., individuals and families.)

12. It's simple, unambiguous, and certain, the opposite of the current
    tax code, 60,044 pages and counting.

13. It assures that no American will find, at the end of the year, a
    need to get a loan to pay taxes as an alternative to penalties,
    interest, or cheating.

14. The broader tax base comprises everyone spending money in the U.S.,
    including the ten percent of our economy (an estimated \$1 trillion)
    that today is underground or under the table. Under the FairTax, the
    illegal drug dealer will pay his tax just like the rest of us when
    he buys his sunglasses, BMW, and other items, as will those who work
    for cash and undocumented immigrants, all of whom receive government
    and societal benefits.

15. It encourages work by letting workers keep 100% of their earnings
    and giving a rebate, in addition, making the notion that "the more
    you work, the more money you have", a reality, unlike the current
    system where welfare is lost when you go to work, so the first
    dollars earned after taxes just offset what a welfare recipient is
    currently receiving in assistance, so working is perceived as
    disadvantageous.

16. It allows more of the lower income families to become home owners by
    allowing a second job income above their current income (all tax
    free) to be applied to a mortgage. Money for down payments for homes
    is also saved totally tax free, causing it to accumulate faster.

17. It has the result that all lending in America will be at the
    equivalent of today's tax exempt interest rates, which are 25%-30%
    less than today's taxable home mortgage interest rates. This will
    create a huge boom in housing purchases and allow existing
    homeowners to refinance and reduce their cost of homeownership
    substantially.

18. It allows families to retain farms and businesses in the hands of
    those who built them through the elimination of the death tax.

19. It allows families to give tax-free assistance to one another by
    eliminating the gift tax.

20. It gives individuals (and businesses) the right to donate as much as
    they want to in a given year to charitable causes, without concern
    for exceeding an allowed limit on giving.

21. It encourages individuals to self-insure, making the health system
    more direct-pay (no 3rd party pay), thus bringing costs down.

22. It puts an end to the anxiety for honest taxpayers that begins soon
    after January 1 for most of use, culminating in wondering whether
    we've claimed everything we legally could and nothing we shouldn't,
    all without raising questions at the IRS. It makes April 15 just
    another day. (Perhaps it will be a holiday after the FairTax is
    enacted!)

**FairTax and Social Security and Medicare**

23. It eliminates the regressive payroll tax that hurts the poor.
    Currently, every one of us is taxed a minimum of 7.65% on our
    first-dollar of wages up to \$90,000 (the cap for FICA, not
    Medicare), if we earn that much. It provides funding for Social
    Security and Medicare at a level equal to the current system.

24. It provides that all 290 million Americans and 51 million visiting
    tourists fund Social Security and Medicare with their purchases.
    Today only 110 million workers fund these programs via deductions
    from their paychecks.

25. It assures that the wealthiest Americans will be voluntarily helping
    to fund social security with every last dollar they spend above the
    poverty level. Today, earnings are subject to FICA taxes only up to
    \$90,000. The wealthiest Americans therefore do not pay into the
    system above that amount. If their earnings are from investments, no
    earnings fund the Social Security system. 

**FairTax and the Economy**

26. It increases investment in business by eliminating the capital gains
    tax.

27. It allows for better planning by businesses, because they no longer
    have to consider the tax implications of everything they do.

28. It makes higher employment or better compensation possible in the
    small business sector, where today it costs approximately three
    dollars in compliance costs to pay one dollar in payroll and income
    taxes.

29. It makes American products more competitive overseas by removing the
    embedded tax from them, thus lowering the prices of our exports,
    which compensates for low foreign wages.

30. By making our exports more competitive overseas, it lowers our
    balance of trade deficit and increases employment at home.

31. By removing the embedded tax from American products, it makes them
    more competitive with imports here, compensating for the low cost of
    imported products from which taxes have been removed before
    exportation to the U.S.

32. It encourages investment in companies located in the U.S., thus
    providing a home for money already in the U.S. and attracting more.
    The U.S. will be the most attractive tax-free haven in the world for
    doing business.

33. It encourages repatriation to the U.S. of money held by U.S.
    individuals and companies now in foreign countries, with no tax
    consequence. American companies will return from offshore and
    overseas. 

34. It results in a windfall profit, likely to be invested in
    job-creating businesses, for many of those holding taxable corporate
    high interest bonds at the time of passage of FairTax, since the
    bonds will not be taxed under the FairTax. (Currently, a higher
    interest rate is usually paid to entice investors to buy the
    corporate bonds rather than go with the lower interest, but tax
    free, municipal bonds.)

35. It results in Federal Reserve rates being based on current
    consumption, which is rather stable, instead of future earnings,
    which are less predictable, resulting in surer inflation prevention.

36. It reduces production costs for farmers and other subsidized
    businesses, leading to a reduction in subsidies, thus reducing the
    federal budget.

37. It moves many individuals now providing tax advice (return
    preparation, advice, accounting, planning, and records
    maintenance) into an expansive economy where they will be producing
    goods and services. There they can add to the standard of living of
    all Americans and likely earn more than they do currently, instead
    of shuffling paper for the government (and not contributing anything
    economically to society).

**FairTax and Churches and Non-profit Organizations**

38. All contributions to Churches and other non-profit organizations are
    made tax-free. These organizations no longer will bear the expense
    of filing tax returns with the IRS and paying their half of Social
    Security and Medicare payments for employees. In order to purchase
    goods and services tax free they will just have to apply to the
    state sales tax authority for a qualification certificate as a bona
    fide not-for-profit organization operated exclusively for religious,
    charitable, scientific or educational purposes.

39. It restores to churches and non-profit organizations the 1^st^
    Amendment right to engage in free speech, without fear of losing
    their tax-free status.

**FairTax and Rights and Freedoms**

40. It restores the 4^th^ Amendment, protecting against unreasonable
    searches and seizures, from which the IRS presently is exempt.

41. It restores the 5^th^ Amendment, which guarantees the right to due
    process. Under current systems the IRS has their own courts with
    their own set of rules not included in the 5^th^ Amendment.

42. It restores individual privacy. You no longer have to report where
    you work, what you are earning, and what you are doing with it.
    (Employers will report your earnings to the Social Security
    Administration for determination of your social security benefits.)

43. It relieves citizens of the risk of facing the shift in burden of
    proof that is so common with the current system, i.e., the taxpayer
    is guilty unless proven innocent, but even the IRS staff sometimes
    gives conflicting interpretations.

44. It eliminates the need to have a \"marriage\" clarification
    declaring who you live with, as that no longer has any bearing at
    all on a state or federal sales tax.

45. It eliminates the need for courts to decide which divorced parent
    gets to take the tax deduction for children.

**FairTax and Government and Educational Entities**

46. Without FICA to pay, most states, counties, municipalities, and
    school districts will see a large increase in their available state
    budget revenues, additionally lowering the overall tax burden (State
    & Federal) for most Americans.

47. It eliminates the administrative costs incurred by states in
    collection of state sales taxes because states will piggyback the
    state tax collection onto the national tax collection, for which
    they are compensated by the FairTax ¼% administrative cost
    give-back. (Retailers receive an equal amount for collecting the
    FairTax.)

**FairTax and Politics**

48. It cleans up a major flaw in campaign financing, eliminating
    campaign donations for \"tax favors\".

49. It eliminates wrangling in Congress over tax cuts, the tax code, and
    who is or is not paying a fair share of the tax bill, providing more
    time for debate on more productive issues.

**FairTax and the Environment**

50. It's good for the environment. Reportedly, the IRS sends out 8
    billion pages of forms and instructions each year. Laid end to end,
    they would stretch 28 times around the earth. Nearly 300,000 trees
    are cut down yearly to produce the paper for all the IRS forms and
    instructions. Also, since it taxes only new items, it would
    encourage buying tax-free pre-owned cars, clothes, furniture,
    houses, etc. Reuse is good for the environment, too.

Kenneth J. Van Dellen (with help from friends) 1/22/05