Ways & Means Hearing on Tax Reform and Consumption-Based Tax Systems Submission

Please place the following blogg into the Record of the Hearing on Tax Reform and Consumption-Based Tax Systems Submission 7/26/2011:

 

In reading the below, keep in mind that 22% of the price of domestic products is hidden Federal taxes. Even a loaf of bread contains these embedded taxes, if not imported. In a closed border, it would not matter to keep our current tax structure, as the Nationalist GOP wants such as leadership of group Freedomworks in a plan they call flat tax, but we have freetrade which handicaps American Industry. Thus we need an open border tax structure as explained below.

Where did we go wrong:

Before W.W.II this Nation was a closed market to imports. The framers of our current tax structure did so under the Americans consuming only domestic manufacturing, I imagine using the production tax system as a convenience since the bookwork was already in place and under management control. Then we opened our trade to Japan, making for free trade. This gave the American consumer a boost to their cashflow, making for more spending in other areas and those we lost a few jobs, the increased cashflow produced many more jobs.

President Reagan then introduced free trade to the world and opened our border to duty free import. No thought was given to the production tax structure in place and the new surge of cheap goods made for even greater prosperity to the American consumer, while again eliminating some jobs, but at the same time we had new technology introducing new avenues of employment, thus the excise production tax on domestic production had minimal effect. During the period after, companies were being cannibalized for short term profit as their competition from imports was cutting into the profit margin and causing little advantage to stay in business. These companies were closed, jobs being eliminated, as the scavenger Companies bought them up and sold them for parts or took the parts overseas to open up manufacturing to import and feed the open accounts of buyers of the closed companies products, in a duty free, production tax free advantage and at a high markup profit.

The slow demise of manufacturing in America has grown and the need of social programs from the Federal Government to prop up the American dream continued to grow, expanding deficit spending and hidden inflation. This perpetuated the domestic excise production tax, furthering the handicap of American manufacturing. The need for additional income into Families also grew, demanding more then two spouses could produce to keep up with the standard of living and regulations and license fees, insurance costs, to a point where a majority of Americans are now in a fiscal struggle living paycheck to paycheck, if working. Jobs have become hard to find, many being entry level service jobs without any ability to advance or receive adequate wage. Jobs are at a premium, even with a low reported unemployment level, which does not report and hides many who have slipped from the employment rolls due to years of job seeking frustration, especially in the urban and rural areas.

Now we find ourselves being tempted into becoming what we fought for years with our own blood to push back, fascism, Communism and the Tyranny of Government, with the promise of fiscal security. The American Dream is on life support in need of a true free market, one of which fair trade exists. The cost advantage of foreign imports over domestic by continuing with a production tax is about 22%, the amount of hidden tax in domestic goods.

Time is of essence, that this very hour, this Nation is about to fall. The World Government proponents are about to make their final push for world dominance through one world currency.(see BASEL IV) The Marxist of the world have moved into leadership positions in coalition with the One World Shadow known as RHINOs, the pawns of the One World Government advocates. The old media has joined or is owned by both powers and is a major instrument of this Coalition and is making for a unique threat to the U.S. Constitution.

The only way to prevent the above from fulfilling their mission to dominate this Nation and the World is to offer change to the American worker and Family a grand demand for their employment, jobs, jobs, jobs. Only then will the chain of despair be broken. The Conservative Movement must center all it's will on fixing the failing tax and trade structure of this Nation. We must lay down the plank of the Fair Tax Plan WWW.fairtax.org to the Democrat and Republican Grassroots and educate them across into a Party totally centered on the character and values of the Founding Fathers, presiding under the Constitution as written through the demand on the Judiciary to be of good behavior as instructed in the Constitution and defined by Alexander Hamilton in the Federalist #78 Document. http://www.constitution.org/fed/federa78.htm

The Fair Tax is the Salvation of the United States of America and it's Constitution of liberty and Freedom of We the People. Make it so.

Operation FairTax — It is time for FairTax to lead

Let us say you work for a bread factory bakery. Your Boss pays the employees and his own federal taxes, like payroll & corporate Tax, to the federal government. To meet this current tax structure's demand, business have to put the tax cost ...into the price of a product, 22% on average. 

 

So lets say, when you get out of work, you go around the corner and use your whole paycheck to buy that much bread. You are now paying all those hidden federal taxes, again.

Learn what Fairtax does and how taking the 22% out of the price of Made in the USA, we will gain back industrial jobs, as well as grosspay checks.

 

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Here is an letter from Michigan Fairtax Association Roger Buchultz on VAT Vs. Fairtax. Vs. flat tax:

 

 

Flat Tax Vs VAT Tax Vs FairTax ~ MiFairTax President Roger Buchholtz

I have a brief "seminar" for you below in which three tax proposals are very briefly compared.

First, let's address the Flat Income Tax. A simple and flat income tax will remain neither for very long. It will just allow all the tax favors to be bought and sold all over again, which will perpetuate today's corruption of our representative form of government to the point that our representatives too often represent special interests rather than their constituents. In addition, the Flat Income Tax will only slightly reduce compliance and efficiency costs (as all records must be maintained and returns filed) and it will continue the practice of hiding taxes in the prices of the goods and services that citizens buy. This practice of imbedding much of our tax burden (22% of the price of all goods and services is taxes imbedded in the retail price) places American labor and business at a ~20% competitive disadvantage with foreign labor and businesses. In essence, a Flat Income Tax will have no long term benefits and will delay true tax reform for a generation.

I am delighted to hear that you would support a consumption tax if it replaced the income tax. Both a VAT and the FairTax are consumption taxes. How about replacing the income tax, Social Security & Medicare taxes, and death and gift taxes with a consumption tax? There is currently a proposal before Congress with almost 70 cosponsors, called the FairTax (HR 25) that does just that.

Actually, a VAT and the FairTax have much in common, but the differences are critical.

Both tax final consumption only once.

They have the exact same tax base, if they both have no exemptions.

Business to business purchases are not taxed.

The full amount of the tax is paid by the consumer.

Both improve U.S. international competitiveness as neither of them tax exports and are border-adjustable.

How are they different?

The FairTax is a replacement for the federal personal income/payroll tax and corporate tax system. The VAT is proposed as a source of new revenue on top of the individual income/payroll taxes and corporate taxes.

The FairTax has a "prebate" so that no individual pays taxes on their personal consumption up to the poverty. This eliminates the regressive nature of a consumption tax.

The FairTax collects the tax at the retail level, which is simple to understand and comply with. Only sellers of goods or services for final consumption (retail businesses) file monthly tax returns. This would reduce tax filers and compliance costs by 85 to 90%.

The VAT, on the other hand, is collected from all businesses at every stage in the production process. Each business has to keep track of what taxes they paid on their purchase of inputs and subtract it from the tax they owe. This is called a credit-invoice system. It is complex record keeping and especially difficult for small businesses who don't have in-house tax experts.

The FairTax is transparent, the amount of the FairTax being clearly stated on the retail receipt. VAT retail receipts may state the rate of tax, but they generally do not state the actual amount of taxes paid. The visibility of the FairTax provides the natural restraint on the size and reach of government intended by our Founding Fathers.

A VAT is regressive. The European countries solve that by creating all kinds of exemptions in attempts to make necessities tax free. This opens the door for more and more exemptions and vendors start gaming the system to qualify for the exemptions. This encourages the buying and selling of tax favors, similar to today's corrupting trade in tax favors occurring in the U.S. under our income tax system. This undercuts our representative form of government as our elected officials too often represent special interests rather than their constituents.

This combination of the FairTax Prebate (monthly payment to every legal household which offsets taxes paid on spending up to the poverty level, similar to today's personal exemption on our income tax return) and taxing ALL consumption at the same rate creates a consumption tax that is transparent, and much simpler and much less costly to comply with. That is the genius of the Prebate.

$23 million in research on the FairTax and its economic and social impact can be viewed at www.fairtax.org. Feel free to contact me with any questions or for additional information.

 

Roger Buchholtz

MI FairTax President (volunteer)

269 345-0950

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Please understand the reward of Fairtax at this hour of Fiscal Crisis in the USA is nothing less then Provence for us to adhere~

Robert George Dunn

6693 Maple Ridge Rd.
Alger, MI 48610

989-836-2285
RGeorgeDunn@gmail.com

Federalist registered GOP Member

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If everyone knew all there is to know, they would not do half the things they do, including myself, therefore I must foregive them, including myself.