This is a moment to reflect on how serious a problem the Fair Tax Plan (FTP) is trying to correct.
This week the advocacy group Americans for Tax Reform issued its annual report on the impact of taxation on the citizenry. It reported that the average American had to work through July 11th of this year just to pay all Federal, State and Local Taxes. This is an appalling figure in a competitive society. More than half the year to pay for Government!
These statistics, while disturbing, do not reflect the entire impact of the Governments on our daily life. This week, the Competitive Enterprise Institute reported that the cost to consumers of complying with Federal regulations exceeded $1 TRILLION! This is almost 10% of our Gross Domestic Product.
An aside. No matter which method of revenue producing we choose, we must constantly watch the amount which the Federal government spends. FYI. In 2006 this totaled an absolutely obscene $2.654 TRILLION!
Back to taxation for a moment and I will end this session:
DO NOT EVER FORGET. Businesses pays no taxes. You do because their taxes are included in your purchase price.
Businesses, which do not make a profit, do not pay any INCOME TAX because there is no INCOME. You pick up the slack! Under the FTP these companies would pay the 23% tax along with everyone else AND they would not qualify for the Prebate.
Illegal "businesses" (such as drug dealers and crime syndicates) pay no taxes. You pick up the slack! Under the FTP these "businesses" would pay the 23% tax along with everyone else when they bought their Mercedes and revolvers and AK-47s and they also would not qualify for the Prebate for they are not Families in the traditional sense.
A final comment on this aspect. Some worry about the impact of the FTP on the Bill Gates of the world. I believe that the historical level of generosity of this segment of our society to Universities, Museums and Charities should cause many to temper their objections by comparing them to the contributions to our society by those mentioned in the paragraph above.
With regards to the "rich" they seldom pay anywhere nears what the tax rates show. This is because they can, and do, hire the finest tax advisers in the country to search and direct them toward the myriad of tax shelters written into the Code. With so many options available it is not difficult to legally shelter income. Thus, all of the hand wringing about the FTP favoring the rich is a smoke screen raised in too many cases to appear compassionate.
With all of this out of the way, I will get back to the features of the FTP next.