First, I want to thank President Bush for realizing the gravity of this
issue and creating this Advisory Panel. I also want to thank the entire
panel for the work they are doing.

I\'ve been studying the various tax proposals like the Fair Tax, Flat,
VAT, Best, etc. for over 5 years now and have yet to find anything that
is as simple, fair, easy to administer, and as pro-growth as the Fair
Tax. All of which are criteria that President Bush put forth for the
Advisory panel on Tax reform.

Some advocates of the Fair Tax:

\- 55 in House (H.R. 25), - 2 in Senate (S. 25)

\- Alan Greenspan (Chairman, Federal Reserve Board)

\- Milton Friedman (Nobel prize-winning economist)

\- Dennis Hastert (ex-Speaker of the House)

\- Dale Jorgensen (Harvard Economist) along with Stanford, and \$22
million worth of research

\- 600,000 Fair Tax volunteers

\- 350,000 members of the National Taxpayers Union (NTU)

\- 6,000,000 members of the American Farm Bureau Federation (AFBF)

\- 100+ economists in academia and business
http://www.fairtax.org/pdfs/Open_Letter_President.pdf

**Here are some aspects that I really like -**

**- It's Simple.**

Without question, the Fair Tax is the simplest plan being proposed.

**- It\'s fair.**

A single rate for everyone (23-26% tax inclusive or 30% tax exclusive).
I believe this rate is accurate to fund the federal government. There is
plenty of research by respected economists to back this up. (There is
one exception of economist, William Gale from the Brookings Institute.
He said it needs to be more like 50-60%. If that's true, we have a very
big problem in this country).

For the generally accepted 30% rate, I don't understand why some people
think this is high. Fact is: They are paying this amount today! They
just don't know it because of all the hidden taxes.

**- It\'s progressive.**

This aspect is very important and I would not support this plan without
a mechanism that makes it progressive. Some could argue that it's more
progressive because it completely untaxes the poor.

With the rebate (prebate) nobody will pay taxes up to the poverty level.
This effectively relieves everyone from paying taxes on necessities
without actually identifying what is a necessity. As soon as we even
think about labeling something a necessity, the lobbyists will come back
for another feeding frenzy.

Add to that, the fact that used goods are not taxed. Poor and low income
people are the largest purchasers of used goods.

**- It\'s transparent.**

When you buy a candy bar or get a hair cut you will see very clearly
what the federal government costs. Congress will not be able to change
the tax rate easily without EVERYONE seeing it at the cash register.

**- It's extremely well researched and already drafted in legislation.**

The legislation (H.R. 25 / S. 25) is based on over \$22 million worth of
research and has over 50 sponsors in congress. It already has more
congressional support than any other tax reform legislation or proposal.

**- It\'s a tax lobbyist\'s nightmare.**

Nearly 50% of all lobbyists in Washington are there to tweak the tax
code. This lobbying distracts our elected representatives from other
important issues. I also don't think tax policy should be a tool to
encourage or discourage any activity. Exemptions - That's what got us
into this mess! Get rid of itemized exemptions and our elected
representatives will focus much more time and attention on other
important issues.

**- It\'s easy to administer.**

The burden to collect would be with businesses and the states. 45 states
already have the agency in place to accomplish this. The IRS would
dwindle from an \$8 billion agency to almost nothing.

**- It\'s easy to file.**

There will be NO more filing. April 15th will be just another day!

**- It\'s more difficult to evade paying taxes.**

Evasion is a concern, especially with expensive goods and services and a
30% tax. However, here are some reasons why I think this not a concern:

Today, it only takes one person to evade taxes. Under the Fair Tax, it
takes two people (business owner and the consumer) to break the law\...
and the Fair Tax has extremely stiff penalties for both parties.

With fewer entities collecting the tax it is much easier to audit and
prosecute violators.

20% of the businesses will be collecting 80% of the taxes.

**- It\'s pro-growth.**

It encourages savings and investment, for individuals and businesses.
Businesses will not have to pay lawyers, accountants, etc. As result,
cost of production will drop 15-25% to be more competitive in the world.

To quote Alan Greenspan's testimony, "As you know, many economists
believe that a consumption tax would be best from the perspective of
promoting economic growth\--particularly if one were designing a tax
system from scratch\--because a consumption tax is likely to encourage
saving and capital formation."

In conclusion, there is no perfect way to fund the federal government.
But this plan comes pretty darn close. And remember, we ARE designing a
tax system from scratch. Don't be held back or deterred by "transition"
issues. We want a tax system that will last 100 years or more.

Thank you,

George Garbe

Fair Tax member

Purcellville, VA

Here is a link to get more information.

http://www.fairtaxvolunteer.org/smart/index.html