# Tax Reform Proposal for the

# Tax Reform Committee

A FairTax Recommendation

Submitted by: Andy Landen

8 April 2005

453 E. Brandt Ct. #21

SLC, UT 84107

\(801\) 712-2178

I recommend a flat-rate consumption tax on all new finished products.
Consider the FairTax Act, H.R. 25/S.R. 25.

Fairness is probably the most important aspect of any law, especially of
the tax system. Though this committee has heard many notable, honest and
respected men and women testify of the need to reform the tax code, none
have emphasized the need to establish a tax code inherently immune from
traditional politics (where fairness is destroyed by exemptions, rebates
and subsidies). History teaches that tax reform is undone when there are
no protections on equality. For when it appears that any group may get
ahead of any other group, each will expend great resources to maximize
their own gain relative to the other groups (an inefficiency by itself).
Whenever any person receives special consideration, bias is established
and the system cannot be fair and impartial. The new system must protect
against the allowance for different tax rates or special consideration
of ANY kind. The moment that any special consideration is given,
fairness is destroyed and everyone will fight hard for similar special
consideration (and likely for more special considerations). Thus
inequality (unfairness) brings us to our current dilemma of class
warfare. Like many commissions in the past, this commission will fail to
establish a fair and efficient system if it does not devise effective
safeguards against inequality.

A fair tax system which treats all people equally must be blind to
income, economic status, lifestyle, age, race, gender and religion (at
least). Therefore it cannot be based on income, property ownership, etc.
The code must be simple, flat, and transparent. The tax base must be
based solely on consumption **without** any special exemptions,
deductions, credits (refunds), or exclusions of any kind or to any
degree. A flat, monthly rebate to every citizen with a SSN (as outlined
in the FairTax) covers everyone up to the poverty line, without
considering any personally identifiable information. Thus fairness and
privacy are maintained. Consideration of homeownership and charitable
giving requires a strong compromise of both privacy and fairness, and I
therefore do not recommend either. The president's directives concerning
charity and homeownership both clearly compromise equality. If people
want to own homes, then they will buy them when they have the money. The
same goes with charitable giving. If we make the system more efficient,
broaden the tax base, eliminate the IRS and restore equality, the tax
burden will decrease and people will have more money and freedom. Again,
any consideration of property ownership or any other individual
attribute introduces unfairness and thus diminishes respect for the law;
and thus also reduces compliance with the law.

Taxing the same product multiple times discourages outsourcing,
competition, and the entrepreneurial spirit. The simplest method for
collecting a consumption tax once on every new product is the end-user
product tax. It is the simplest in terms of compliance, verification of
compliance, and enforcement. All products bought by consumers should be
taxed at a single, flat rate for fairness, transparency and simplicity.

With a consumption tax, Americans' will own their incomes and they will
be able to choose how much they want to pay in taxes as they adjust
their lifestyle choices. All people will pay equally, including illegal
immigrants and criminals, none of whom currently pay taxes for obvious
legal reasons. The costs of compliance will be a small fraction of what
businesses see today, and no American will ever have to pay another dime
or spend another hour preparing their taxes. As Alan Greenspan said, the
economy will be much more efficient, productive and stable with a
simple, flat-rate, and relatively constant consumption tax.

Given a flat consumption tax, the calculation of the revenue neutral tax
rate is a relatively simple matter. The tax rate will be adjusted
monthly in order to exactly match the expenses for the month. The
government's power to go into further debt will be revoked so that
today's expenses are not passed onto tomorrow's generation and fiscal
responsibility is maintained.

The increased efficiency of compliance and enforcement combined with the
broader tax base, the continual, constant and balanced revenue stream,
the certainty of a simple, transparent (not hidden from the consumers),
and unchanging code, and the heightened respected for (and thus
compliance with) the law all promise a much stronger economy and a more
unified and free America. The protection of equality promises much
greater freedom because no group may "enslave" another with unequal
taxation or benefits, thus Americans will be more united and more
productive.

Every change in tax policy affects the economy, and a complete reform,
such as this consumption tax reform proposal, will have a larger effect
than minor changes to the existing system. Nevertheless, the increased
efficiency should offset the initial economic adjustment. If any
transition provides for the coexistence of the two forms of taxations
(income and consumption), we must expect to see, as history has clearly
and repeatedly demonstrated at the state and local levels of government,
that neither form of taxation will disappear and that America will
quickly be taxed hard by both the income tax and the consumption tax
until the issue of tax reform is reconsidered. I recommend that the
transition be clean (or in other words, constitutionally establish the
power to tax consumption after constitutionally revoking the power to
tax income). The best preparation for the much needed transition is
clear and public announcement of the change with sufficient time for all
to prepare properly. I recommend that the specific details of the new
tax system be clearly, publicly and repeatedly announced at least once
every week for at least three months, but no longer than twelve months,
before the clean change in tax policy. This will allow all people to
react most efficiently as the economy adjusts to the change. Thank you
for considering my proposal and recommendations. Enjoy.

Andy Landen, SLC, UT