The Fair Tax bill promises to eliminate the income tax and replace it with a fair tax designed to level the tax payers’ percentage of the burden of supporting our government. This will cause all of us to pay a flat percentage for new goods and services. Those that purchase higher dollar items and more items will pay more dollars than the rest of us. The rich will pay the same percentage as the median income and the lower income families, which in turn means they will pay their fair share of the tax burden and lessen the burden on the lower income families that seem to pay more today than the corporate executives and Wall Street moguls do.
The current bill settles on a twenty-three percent margin tax that will be added to the price of new goods and services. There will be no tax on used items. How will this affect our economy down the road? If I want to buy a new car, I’m going to look at the cost of a one to three year old car and compare it to the cost of a new car. The cost savings would make the used car much more attractive for practical use by a family. If I had money to burn, the new car would be a nice status symbol! So let’s say we all agree that used cars will be even more in demand after H.R. 25 goes into effect. This will raise the used car market value to close the gap with new cars that support the tax. New car sales decline, especially on small cars and family models. After all, the rich guys are still buying Mercedes and BMW’s, not Chevrolets, Chryslers and Fords.
What are the Big Three auto makers going to do when sales drop? Is Ford going to lay off auto workers due to decreased sales? YEP! You know it! So will the other auto makers. Now we have a REDUCTION in jobs (more unemployed workers), fewer people that can afford new items. We have created a slower economy that pays less tax by spending less for new items.
How do we compensate for this reduction in tax revenue? Our politicians will find a way to increase our tax burden! We KNOW they will!! Politicians are children with Daddy’s credit card and they want to up the limit when it maxes out, not live within a budget! Where is the check and balance system to curtail government spending? We don’t have that know and we won’t have it after the Fair Tax goes into effect.
I think the Fair Tax can be a worthwhile idea for leveling the tax burden on all Americans, but it won’t solve the spending issue created by our government officials. Can we keep them from imposing additional taxes to increase revenue when they run out of money in the future? Can we revise the Fair Tax to limit our government from imposing or re-enacting the income tax on top of the “Fair Tax” and double tax us into poverty?
Let’s find a way to stop government spending AND taxing us until we bleed! Tell your congressman, “No more spending!
James Thomas is a Project Manager of Construction with over 25 years experience handling new construction and maintenance contracts. From coordinating and managing multi-million dollar industrial plant work to commercial and small residential projects, he has learned from associating with with people from all walks of life.