Congress is sitting on an opportunity that is almost too good to be true.
It is in the form of Bills HR 25 and S 1493 "Fair Tax Act of 2003", and if passed it would be heralded by all Americans as the single greatest act of liberation and support for the citizenry of this country since the Declaration of Independence. (Please don't confuse the writing of the Declaration of Independence with the wording of HR 25 or S 1493 mind you; just the possible outcome.)
A 22% National Sales Tax (NST) would do the following:
1. Spur investment and savings because you could put away savings BEFORE it is taxed. Today the avg. US citizen saves the least amount as a percentage of their income than any of the 20 leading industrialized nations. Savings, and not borrowing, is the #1 growth engine for any economy.
2. Fairness: Make sure everyone pays. Afterall, it's easier to chase down 8 million + business than it is 170 million tax payers.
3. Simplicity: The mechanism to collect the NST already exists. Every public, private and non-profit firm/org. in America already pays taxes to the state in which they reside i.e. 941, FICA, FUTA, etc. Having them now also collect an additional 22% NST would simply be just another item to collect, file and pay. To the contrary, filling out individual tax returns is simply a time consuming hassle at best and an expensive nightmare at worst.
4. Greater Revenue: Today it is estimated that each year hundreds of billions of dollars are lost for non payment/compliance by tax payers. With a NST that number would be reduced substantially because of a) simplicity of collection and b) less reason to hide income.
Is a NST perfect? By no means. Is it better than what we have today? Absolutely! Will our economy suffer by switching from an income to a consumption tax? Absolutely not!! Will some people cry foul? Absolutely! Those who have not been paying their fair share of taxes and those who live off those who do not pay their fair share of taxes.
Let me know what you think. More importantly let your Congress person know what you think and tell your friends if you agree to let their representatives know as well.