The Benefits of a Fair Tax

Submitted to the President's Advisory Panel on Federal Tax Reform

June 10, 2005

Mr. Aaron J. Schutte

Sugar Land, TX

<aaronschutte@iglide.net>

Submitted as an Individual

The President's Advisory Panel on Federal Tax Reform

1440 New York Avenue NW

Suite 2100

Washington, D.C. 20220

In Reply to "Requests for Comment \# 3\"

Ladies and Gentlemen of the Tax Panel:

I have witnessed first-hand the damage our current federal income tax
structure has inflicted upon the American economy. From punishing
productivity to forcing business owners and individuals to grapple with
a complex tax code requiring massive amounts of paperwork and
professional interpretation, it has systematically driven businesses
overseas and oppressed the American worker at home.

I have no argument with paying federal taxes, and would say that
prudence, indeed, will dictate that tax codes long established should
not be changed for light and transient causes; and accordingly all
experience hath shown, that mankind are more disposed to suffer, while
evils are sufferable, than to right themselves by abolishing the forms
to which they are accustomed. But when a long train of abuses and
usurpations, pursuing invariably the same object, evinces a design to
reduce them under absolute oppression, it is their right, it is their
duty, to throw off such a tax code, and to provide new guards for their
future economic prosperity and security.

Our current complex mess of income taxes must be replaced with a simple,
transparent system the does not make Americans criminals for being
confused filing out forms.

Any plan or hybrid that keeps a form of income taxes still would export
US jobs through corporate taxation that keeps American goods at a 20%
price disadvantage and still have the massive record keeping and
compliance costs that dog the US economy today. It is estimated that
Americans spend at least \$250 billion a year to comply with the tax
code -- that's \$850 for every man, woman, and child in America.
Billions of dollars in compliance costs are wasted each year, and we
have nothing of value to show for this expenditure -- not one single
productive service or product is added to our nation's wealth. It is all
simply the "cost of living" or "doing business," in the US.

However, it is estimated that the FairTax, HR 25/ S 25, would
dramatically cuts such compliance costs, perhaps as much as 95 percent.
(Details on [www.fairtax.org](http://www.fairtax.org/)) And because the
FairTax legislation repeals income taxes and corporate taxes, American
businesses can concentrate on being the leaders in their fields
worldwide. Not in filing complex forms. It leaves the working man to
concentrate on his job and family. Not in filing complex forms. And
because only sellers of new goods and services to personal consumers
need to remit sales tax to the states, they can concentrate on 80% less
filers and not on wading through millions of extra complex forms.

The benefits of the FairTax are almost unimaginable. But over \$22
million in research has been conducted and it shows a 75% increase in
business investing and a GDP growth of over 10% the first year of
implementation. Imagine the American worker taking home his paycheck
without any federal income and payroll taxes withdrawn being taxes on
lifestyle not productivity! Imagine both the employee and employer able
to invest and not be punished for extra productivity!

The FairTax is clearly the best researched and economically sound tax
proposal before the panel as evidenced by over 75 economists that have
endorsed the legislation. As important is the fact that the FairTax is
legislation in the House and the Senate, not some vague idea with no
grassroots support in America.

The last time America rose up to discard an oppressive tax code, great
things were set in motion for this nation. We have the opportunity to do
so once again. I implore you to recommend the Fair Tax Act of 2005 to
the President.