April 30, 2010
From: Congressman Bart StupakSent: Friday, April 30, 2010 11:58 AMSubject: From the Office of Congressman Bart Stupak
April 30, 2010
Mr R. George Dunn
6693 Maple Ridge Road
Alger, Michigan 48610
Dear Mr Dunn:
Thank you for contacting me regarding the Fair Tax (H.R. 25). I appreciated hearing from you.
I am committed to real tax reform that would implement a more efficient, simple, and fair federal revenue system. Tax reform should not give additional breaks to millionaires on the backs of working and middle-class families, nor should it increase the already dangerous budget deficits and endanger the long- term solvency of Social Security.
Representative John Linder of
introduced HR 25, the "Fair Tax Act," on January 6, 2009, which would replace our current federal income tax system with a national sales tax. HR 25 has been referred to the House Committee on Ways and Means, where no further action has been taken. Georgia
The "Fair Tax Act," would replace the current income tax with a regressive 23% national sales tax for property, goods and services. Taxable services would include transportation, utilities, telecommunications (i.e. phone, internet, cable) and these services would be taxed at a 23% rate. In addition, homes and cars would cost an additional 23%. When purchasing a new home, you would have to pay nearly a quarter of the cost of the home in additional taxes. For example, a $100,000 home would cost $123,000. Or, if you already own your own home, you may find the value of your home decreases because potential purchasers cannot afford it.
The purchase of a new home will have a sales tax, but the cost of the home will be reduced by the hidden tax that is in all the product and constiruction. There will not be any payroll tax in the price of materials manufactured in America nor the labor that it takes to construct the House.
In addition, many of our seniors who have been forced into the abysmal Medicare Prescription Drug Benefit program already cannot afford to pay for their prescriptions under Part D. Under the "Fair Tax," our seniors would pay an additional 23% for their drugs, as $1000 in prescription costs would become $1,230.
The Senior citizen will receive, as well as eveyone, a prebate up to the poverty level, thus eliminating a great amount of tax paid by the lower income folks thedy now pay under our current tax stucture, thus lowering the cost of living for them and compensating for the tax on drugs, which will be cheaper if manufactured in the USA.
The President's Advisory Panel on Federal Tax Reform rejected replacing the current federal income tax with a national sales tax as proposed under the "Fair Tax Act." In their final report issued on November 1, 2005, the panel detailed four major reasons for rejecting a national sales tax proposal:
The panel under President Bush was done on a generic formula of consumption tax and not on the proposed FairTax plan. It is also well known that the DC Elite power wants nothing to do with changing the current tax structure as it will eliminate the powerful lobby system of today ending the payment to congressmen's campaign finance for waivers & favors in taxation. In short, this commission your refer to is a scam of the greatest demise to the prosperity of America, keeping the American Manufacturing sector subject to the penalty of the Federal taxation built into the price of American manufacturing while imports coming into America are tax exempt providing a 22% plus advantage over the American employment thus the draining of jobs in America since the free trade was enacted by President Reagan.
1) This proposal would place an undue burden on working and middle-class families
To claim that the FairTax would be a burden on the middle class worker, all workers is a total disgrace to say. The fact of lack of jobs creating a shortage of employees, workers, is enough to demand accountability. FairTax will create such a shortage of employees creating a much needed inflationary factor from such a shortage of jobs due to the massive increase of manufacturign in America from the shift of tax burden off American goods onto all goods equally, making imports cost go up 22% while American products will stay the same in cost by the shifting of tax to the point of sale.
2) An entitlement program, like the "family consumption allowance" provided for in the "Fair Tax Act," would create the largest entitlement program in American history. This "family consumption allowance" would provide a monthly sales tax rebate for families meeting the monthly poverty level (1/12) of the annual poverty level. A program like this would be included in order to provide grants to working and middle-class families to supplement the undue tax burden.
The pre-bate progam under FairTax is a great move of this Nation moving from the near 47% now thinking they don't pay taxes(no income tax) to being an equal receiver with every American Citizen receiving the same fair tax break. This will provide a safety net for everyone while at the same time freeing up the business climate in America thus providing a huge expansion in employment standards, raising the middle class earner % back to it's once promiment state. The prebate is the only way to provide a social program under the Constitution, as the General Welfare of all Citizens equally.
3) Although the "Fair Tax Act" would eliminate the Internal Revenue Service (IRS), a new government agency would be needed to oversee the sales tax system, especially the monthly "family consumption allowance" program; therefore, there would still be extensive administrative costs, including the cost of implementing a brand new government agency to oversee this system.
All but four States have in place the Sales tax and to even try to compare the cost of a Federal consumption tax collection as expensive is ludicrous. Besides, the electronic world of banking today allows for easy adminstering of funds at hardly no expense. It will also put a handicap on illegals as they will have to pay for the consumption tax without a prebate.
4) It is likely that individual states would still continue to collect state income taxes on top of the national sales tax, creating an even higher burden on families than the 23% proposed in the national sales tax.
Pointing to the State tax burden as a reason to not have the FairTax. If anything, the FairTax will provide States with an incentive to implement the State FairTax plan to help in attracting employment to their state. As to the States havign to increase taxation under Fairtax, FairTax is a revenue neutral approach to changing the Federal Tax Structure, other then the increased tax revenue from the increase in jobs.
Given my serious concerns and the rejection of a national sales tax by the President's panel, I do not support a national sales tax as a replacement for the federal income tax. However, I would support tax reforms that create a simplified, fair system that would not unduly tax our working and middle-class families.
The current thoughts on a flat tax was tried before by President Reagan. That plan has been amended over 1,200 times and will leave the corruption in Washington in place and change nothing for gaining on jobs due to the import remaining outside the tax Structure.The VAT is not even worth dicussing as it will destroy any of what is left of manufacturing in the USA.
I will keep your thoughts in mind should Congress consider H.R. 25 or any other tax reform legislation. Thank you again for taking the time to contact me. Please feel free to contact me again in the future with issues that concern you.
Member of CongressThanks for your response Congressman. I hope that you can leave a huge impact on our nation by getting the truth out about our tax structure and it's devistation on American jobs.
R. George Dunn
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