Our nation faces many important issues, of which the Contract from America will offer a handful of actionable solutions that can reasonably and immediately be addressed by those who seek to represent Americans in Congress.
For many Americans, the need for fundamental tax reform is front and center. They recognize our tax system has evolved into an unfair punitive government mechanism to redistribute wealth and serve special interests.
Many interesting ideas, including the FairTax and the flat tax, have been offered as potential solutions to our broken tax system. At first glance, some of these ideas reflect competing interests. However, the common goal and first priority of those interests should be to raise the profile of the need for fundamental tax reform, sustain a national dialogue on the issue, and allow various solutions to compete with one another in the marketplace of ideas. Those ideas will rise and fall based on the merits, with the very best ideas naturally rising to the top.
Importantly, FairTax is a founding coalition partner of the Contract from America. Based on survey responses, comments on the orignal Contract from America site, and discussions with Neal Boortz and Ken Hoagland, we agreed to unite behind the notion of fundamental tax reform broadly and deal with the FairTax / flat tax debate once fundamental tax reform is squarely on the national agenda.
What about all of the support for the FairTax during the early stages of the Contract from America initiative? Why isn’t the FairTax or the flat tax specifically mentioned in the current choices on the Contract from America?
When this effort began, the original website made clear that the early stages of the process would be used to generate ideas and engage in debate. Visitors could vote on ideas and advance issues important to them in ways that were virtually unrestricted.
For example, highly engaged activists often returned to the site over and over to promote and support their favorite ideas. While some had the support of well-organized efforts, others (that were often just as compelling) were buried under mountains of political discourse.
In addition, the process offered a four month window of opportunity to introduce and debate ideas. Those that were introduced early in the process had a significant advantage over those that were introduced in the final weeks. With few exceptions, specific ideas introduced early received more votes.
The most important part of the early stage of the process was to identify the issues that truly resonated with Americans and the need for fundamental tax reform was identified as one such issue. With regard to the specific proposals of FairTax and the flat tax (not to mention other compelling proposals), we concluded that to choose one over the other at this early stage will only serve to divide rather than unite us on a critical issue impacting every single American.
In the end, there are hundreds of important issues and only the Constitution is well-suited to address them all in a manner consistent with the values of the Founding Fathers.
Americans will continue to weigh in on the issues important to them and the Contract from America will become a stronger, more refined document as a result.
Reform is a process. The Contract from America is part of that process. It cannot possibly be all things to all people, but it can help refocus the national debate, and offer a tool to hold elected officials more accountable in 2010 and beyond.
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{ 18 comments }
a fair tax to me is to get rid of our progressive taxation and go to a flat tax instead..we woulldnt pay more the 20%tax on everything we earn! a fair tax would get rid of the social security and replaace it tsp that thirft saving plan ffor i believe in personal responsiblity. lets get rid of the nanny state ssystem!
A fair tax. Stop all taxes, get rid of the IRS and start over. There would be a tax on certain things we all need like an army and police used only to protect individual liberty from force. A sales tax could enter the picture.
I propose a basic tax system where we only pay for what we as individuals want. An example would be a gas tax that is used only for anything involved with building and maintaining roads. The more an individual uses the roads the more an individual pays. Never paying for things like someone else’s health insurance etc. unless it is voluntary charity. and.. Voluntary charity would help others in need far more than any government program ever would.
Jerry
Our current income tax code began as a flat income tax when the 16th Amendment was enacted in 1913. People were taxed 1% on the first $20,000 and 7% on income over $500,000. Less than 1% of the population earned over $500,000 in 1913. It was essentially a flat tax on income given more than 99% were taxed 1%. Another flat tax on income merely turns the clock back 97 years but will eventually morph back into the multi tiered, convoluted, increasingly oppressive, heavy progressive tax we have today only faster thanks to the thousands of lobbyists today that didn’t exist in 1913.
There is a reason Karl Marx included a heavy progressive tax on income as a plank in his Communist Manifesto. he understood gradually increasing the tax on productivity will discourage people from being productive and lose their desire to work. They will then turn to the state for their dependency. We have seen this happening for the last 97 years. It’s time to break that chain by enacting The Fair Tax Act.
The Fair Tax Act is anything but fair. The idea is fantastic but the current legislation will actually place a greater burden on the middle class and hand out welfare to the lower class. The Fair Tax Act does not have any caps on growth of the tax rate, which will start out at 30%(probably 34%). The Fair Tax Act does not stop the spending done in Washington it is just a replacement for what we already have.
There are benefits to the Fair Tax Act but they are lost when you look at the details of what this bill brings. Cut out the proposed taxes on services and fuel, cut out the prebate and make it have unchangeable growth caps then you may have a bill that will work.
We really need to cut the spending in Washington prior to enacting this kind of legislation. The reason is that if we dump the current unfair tax code the government still has a 1.34 trillion dollar budget that they have to steal money to accommodate. Without reducing this appetite ANY tax code is bad.
The “Fair” tax isn’t fair.
The Flat tax still confiscates private property and inhibits productivity.
The Single Tax: Now we’re talkin!
The Single Tax, by the way, is closest to what Jfeheley wants: You only pay for what you take — not what you make!
I am definitely opposed to the single tax being a land tax. Full ownership of land is as much a natural right as ownership of a house. What good is it to have the ownership of your house protected, but you lose the land it sits on because you can’t afford to pay the taxes? When land is purchased, it is owned, not rented or leased.
A 10% tax voluntary tax on annual increase for individuals ONLY is my preferred taxation — it’s good enough for God, should be good enough for man. Same tax whether healthy or sick, rich or poor, old or young, married or single, kids or no kids. That 10% tax revenue split up between community (40%), county (30%), state (20%), federal (10%), and put most services back to the local levels where our votes count the most. Second choice is a single sales tax on goods and services at the time of purchase, split in the same proportion among the different levels of government. If communities or counties or states want to exempt certain of their population from sales taxes on certain items (such as basic food commodities), then they can do so for THEIR share of the sales tax.
It seems that those who oppose the fair tax have done only enough homework to highlite their opinion. The Fair Tax side by side with any other system of taxation is far and away superior to any of the alternative forms. While income tax is by its nature Government stealing part of your work , at least if all are paying in equally the burden for taxes is shared equally, rich or poor, legal or illegal. The Fair Tax support is/was far in the lead to be advanced to contract status. Combining tax reform ideas only serves to dilute your objective. Status Quo of an ever growing Government that drains the private sector of its life blood (wages/wealth)only hastens the Fall of the Republic
A flat tax is the only fair way to tax, it eliminates all the loopholes rich people have, is fair to those folks who have lower earnings, taxes those with higher abilities to pay and % wise is the same for everyone. Just imagine all the savings by getting rid of the IRS.
I can not and will not support contract for America unless and until it includes the fair tax. By not including a solution you are dividing us by default.
The fair tax is the only reform idea that does not seize wealth involuntarily. Taxes should be consumption based and not wealth based. The fair tax does not tax prosperity and productivity …These are foundational principles of liberty if you cant support, you wont get my support.
I don’t care if the fair tax RATE is 50%….I still choose when or if to pay it. I still get my whole paycheck and I am acutely aware of the burden of govt. taxes. I can meet my needs and pay no tax, and only pay taxes on my wants.
T-Paine – Single Tax… Interesting, but greatly flawed
Your missive is filled with contradictions and presents unsupported ‘facts’
“Nor is it a tax on land, for we would not tax all land, but only land having a value irrespective of its improvements, and would tax that in proportion to that value. ”
and
“But if we tax land values, there will be no less land.”
So land can be reclassified and/or revalued resulting in less land available to tax.
A poorer person only able to afford the land but not the improvements would pay the same taxes as a person that purchased the land, improved it, and gained from the improvements resulting in no benefit to the poor.
“The value of land does not come from the exertion of labor on land,..”
This simply is nonsense – the land on which a city is built has much more value than that of a plot of land in the desert 100 miles from civilization precisely because labor was exerted on the land providing jobs, housing, and business opportunities.
Strongly suggest read ‘FairTax – The Truth’ and see how the FairTax really works.
we should get rid of our social seecurity tax and go to a tsp that thirft saving plan that congress and civil serverrce worker have.tsp meansgreater pesonal responsiblity by getting rid of the nanny state.
i believe in free trade between the states ans fair trade between nations.i feel we should collecting duties andd tarifs frrom other nation that want trade or do business here.we are losing our industrial base with free trade with nation. wee are losingg jobs,our ecconomy and most of all our tax basee too.i believe in a flat tax for rich or poor we all pay the same percentage tax wise with write offs.no special deal for rich people to send their money abroad either.
I suggest the criteria be “which tax plan is the best for our national economy”. Why would we even consider something that does not grow the GDP the best? The FairTax does the best job of that. The objections I have read here are all not valid. Do a little research before dismissing the only plan that will grow us out of our problems.
Hey everyone, here is a far better and far simpler tax solution. This is what we should be promoting, not the fair or flat tax.
How to Reform the Tax Code in 1 Minute of Less
http://www.youtube.com/watch?v=MjWgg8SIO4E
Forget the Flat Tax and the FairTax. Federalism should be restored and all federal taxes should be apportioned (based on state population). Let New Jersey have its property tax, let California have its income tax, and let Texas have its sales tax.
I think we are missing part of the problem. If i might suggest, I think we need an amendment to the constitution that states a maximum % of GDP that the govenment can take through taxes. All taxes should be sales tax based so that we cannot get nickled and dimed in different areas. The sales tax could be a different rate depending on what it is for (Gas tax for infastructure for example). This would be definition limit government spending, it would provide long term visibility to business and investors with the knowledge of what the long term tax regime is and lastly, would provide no illusions to the American citizen as to what they are paying. Citizens can choose not to make purchases avoiding or reducing taxes and saving.
The issues are (1) the government unchecked ability to tax irrespective of the tax “name” and where the collection takes place, and (2) the divestiture of a growing section of voters who have no interest in government accountability as they pay little or no taxes directly.
Taxes targeting a smaller group have a “divide and conquer” component which taxes people in a manner disproportional to their representation. That is the issue with the current American tax system. That is true for property taxes (I do not own property), death tax (my parents have nothing to leave me), gas tax (I live in the city), sales/fair tax (I have little discretionary income), capital gains tax (I do not invest), our current income tax (I’m exempt, its not mine they are raising) and so forth.
In order to balance taxation and representation you need a contributing population that reaches across most segments of society and engages people in the political process in a responsible manner.
My proposal is to address these issues by eliminating all taxes except for the income tax. In what the income tax is concerned eliminate every single exemption and establish that the higher bracket can be AT MOST TWICE AS BIG as the lower bracket with one single schedule applying to individual and corporate
It is similar to a flat/single rate tax, but it is more palatable to the whole of the population while still achieving our primary objective of balancing taxation with representation.
The income tax, even though it makes us cringe, is the broader reaching and the one that has the ability to involve all segments of the population in a “equal/fair” way regarding the role of the government in our society. The issue we have is the current monster created with the objective of fostering class warfare and alienating the sector of society which pays taxes so to leave the government unchecked. That would go away with the simplified schedule and the elimination of the exemptions — those are the two key points in this proposal. If you keep any exemptions, even if you go to a flat tax, we are not balancing taxation with representation and we are creating a corrupt system.
With this proposal the wealthiest pay say 20%, those of us making minimum wage pay 10%. This achieves 3 things. (1) government money changes being from being someone else’s money to the money “I” pay in, and I see it clearly not in pennies and dollars when I buy something but as hundreds and thousands as they really are as I’m reminded of that every 2 weeks when I get my paycheck; (2) it fosters entrepreneurship and attracts capital and industry from all over the world and; (3) it puts the government in check eliminating the freebee mentality that corrupts the political arena and us as voters.
We would end up with a system that is extremely simple, lightweight, efficient. 90% of the people would not have to file a tax return. Only companies and those getting income from other sources (real estate rentals for example) would need to do it. Business would not have to track or collect sales tax. Seniors would not have to worry about having their homes/farms taken away because they cannot afford property taxes. Money would come back to small business and communities as people no longer have to go to the internet to avoid sales taxes, etc, etc.
For those people that would pay less 10% in income tax with the current system we get a salary increase to make up for the fact that they would now be paying it. The idea is that their take home would not decrease. This would be done through a tax credit to companies and would be progressively phased out over 5 years. By then companies would have had time to benefit from or readjust to then new tax structure and can afford it on their own.
This idea is something that can be implemented at the state level. For example, if NJ gets rid of all its state and local taxes as described and institutes an income tax based on this model it will create tremendous influx of capital, people and industry from other states, particularly NY. This will create a domino effect where state after state is pressured into adopting the new model.
And, of course, the main thing is that now the government gets its money from a tap every single person that works for a living is watching as opposed to a fire hose they control.
I’m opposed to ANY income tax … flat or “progressive”. We should move towards a consumption tax and/or a universal non-protective tariff.
How about Ron Paul’s Bill to Abolish the Federal Reserve!? That would the only place to start for any kind of reform for taxes, fiscal responsibility, ect.This conversation is not even worth having until you start with getting the Bankers out of the Government!
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