***From the desk of\...***

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**Congressman Steve King Iowa, Fifth District**

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Protect Social Security Now With a Federal Retail Sales Tax

March 10, 2004

 

Federal Reserve Chairman Alan Greenspan recently suggested cutting
Social Security and Medicare benefits in order to keep these government
programs solvent.

 

There is a better way to keep Social Security and Medicare solvent, yet
still provide the funding for very necessary reform. First, abolish all
federal income taxes and the regressive payroll tax, then replace these
taxes with the FairTax (HR 25/S 1493), a federal retail sales tax on all
new goods and services purchased for personal consumption.

 

When we shift Social Security funding from a narrow, regressive payroll
tax to broad, progressive sales tax, we are well on our way to resolving
the Social Security problem once and for all. One of the biggest
problems in fixing Social Security is funding the transition from the
mess we have now to whatever the reformed system becomes. With every
consumer contributing via the sales tax, rather than a crushing payroll
tax on the few, funding that transition is much more palatable.

 

Who contributes to Social Security under the FairTax? Everyone spending
money in America. Teenagers who spend money like water, often without
having paid payroll taxes. Tourists visiting our shores. Illegal aliens,
who pay few taxes today. The trillion-dollar
underground/criminal/drug/porn economy, with participants who really
love to flash that cash for expensive retail products. Oh yes, you and I
will be contributing through our purchases as well.

 

How does the FairTax protect those on fixed income? In brief, retirees
(and anyone else) living at or below the poverty level will receive a
rebate that zeros out any sales tax they would otherwise pay. They just
have to be residents with a legal Social Security number to qualify. In
addition, taxes hidden in the cost of the goods and services are gone.
Through these two mechanisms, these segments of American society are
honestly and transparently detaxed up to the poverty level.
Additionally, the FairTax does not tax used goods, so there is yet
another way for retirees to control the amount of sales tax they pay
well above the poverty level.

 

Can we pass the FairTax soon enough to fulfill our commitment to
seniors? Do we, the people, the grassroots, make the laws in this
country? Women marched in the streets and got the right to vote.
Prohibitionists marched in the streets to pass it; Americans voted with
their elbows 13 years later to repeal it. Civil rights was won in the
buses and at lunch counters, and then passed in Congress. Oppressed East
Germans took down the Berlin wall brick by brick; they took out
communism slab by slab. Need I remind you your congressman\'s and
senators\' offices are only a phone call away? Yes, we can pass the
FairTax now. But only if you call your congressman\'s and senators\'
offices now and often, demanding specifically that they co-sponsor and
work to pass the FairTax.

 

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