Monday, May 23, 2011

Fair Tax would eliminate all payroll and income taxes

Hard core Tea Party faithful bent on eliminating IRS woes

Here's how it works, according to Killeen real estate man Jim Wright, an early and ardent supporter of the Fair Tax.

He was at a political gathering at an area home a few years ago and the incumbent Congressman was taking questions.

Would he support the Fair Tax, as introduced in a bill stuck in the Ways and Means Committee?

The man said he didn't know enough about it. He would read up on it and make a decision.

Within a few weeks, Rep. John Carter of Texas' 31st District announced he had signed on as a co-sponsor of the proposed bill that would eliminate the IRS, all forms of payroll deduction, personal income tax, corporate income tax, and taxes on capital gains – to name a few.

That's all it takes, according to Central Texas Conservatives Chairman Elwood Smith. A few determined people can change the way their government does business if they just keep on plugging.

There's a new form of plugging in town called viral marketing. Anyone with a video camera, some imagination and access to a computer can put out a clip and it may go viral overnight.

That's the new way of doing things.

“Five hundred really dedicated people in any Congressional District can change it. |If it's liberal, they can make it conservative; if it's conservative, they can make it liberal,” said Mr. Smith.

Speaking to a throng of about 50 hard core Tea Partiers at the Temple Public Library last night, the two men rolled out deep dish Tea Party core issues. They mentioned little doo dads like the fact that during the latest econommic slump, the recession and financial collapse that started in 2008, federal employment is up 15% - private sector job growth, only 1%.


Business organizations are sitting on their money. They are afraid to spend it until they know which direction the government will go on taxes, environmental regulation, mandatory health care, and dozens of other issues that have stymied business growth all over the lot.

If Uncle Sam would tax the consumption of newly manufactured goods and eschew taxing the means of wealth, according to Mr. Wright, a representative of Fair, 80% of manufacturers surveyed world wide said they would suddenly find the United States an attractive place to relocate their plants.

It's the difference between a democracy and a republic, said Mr. Smith. In a democracy, if 51% of the people vote to enslave the other 49%, they are stuck with what they have got. In a republic, on the other hand, he pointed out to a friend at the meeting, people live under the authority of a government of laws, not the authority of men.

How would the Fair Tax work?

Every American would have the chance to live up to the poverty level and receive a “pre-bate” from the government based on their income; they would pay the 23% tax on new items, goods and services consumed once they had surpassed that level.

For instance, a family of two earning above the federal poverty guideline for two of $14,710 on an income of $25,000 would receive a monthly check from the Treasury up to the level of 23% of the amount of money they spend on goods and services – up to that level.

The same would hold true for a billionaire's family – up to the poverty guideline. All other expenditures above that income level would be taxed at 23%. There would be no more audits, no more deductions and no more saving receipts for seven years.

Payroll deductions for Medicare, Social Security and FICA would be a thing of the past. Period.

Who would start paying their share of taxes? Drug dealers who buy new houses and luxury cars and pickup trucks would pay their 23% just like a hardworking citizen. Illegal immigrants would pay the 23% on everything they buy. To get the pre-bate, they would have to have a valid Social Security number, a birth certificate and/or legal immigration status. According to expert calculations, the average American taxpayer spends about 33% of each dollar on various taxes - income, embedded, sales and excise. The Fair Tax system would eliminate all that. State governments would be paid by the federal treasury to collect the Fair Tax only on new items and on services.

The new system would provide a huge incentive for legitimate citizenship, Mr. Wright concluded.

Read all about it on
Better yet, get the book that started it all. "The Fair Tax Book" by Neil Boortz and John Linder explains the details of how the pre-bate would be calculated and disbursed, the rate of tax adjusted according to the nation's gross domestic product.


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