StraightUpAmerican.com

What will tax season be like for the average Joe or Jolene? Well, to begin with April 15 will be just another beautiful Spring day. There will be no income tax filing, so there will be no tax preparation. There will be no need to keep all your receipts. You’ll never again have to ask, “How many years do I have to keep all this stuff?” Your accountant will be able to actually earn his fees by helping you manage your money, rather than by doing your taxes. In short, there will be no tax season.

The transition from an income tax to the FairTax, for the average consumer, will hardly be noticed. The collection of the tax revenue lies with the retail and service businesses, and most of the infrastructure is already in place for collecting sales taxes. The prices of goods and services will remain about the same, and in some cases may even decline as embedded taxes are removed from the manufacturing, transportation and supply processes.

Every year we lose billions of dollars in productivity just in the time it takes us to prepare and file our tax returns. This is an immediate benefit of implementing the FairTax. Will it be easy to get it done? No. Is it worth it? Absolutely.

One question that first concerned me about the FairTax was what happens when people reduce their spending? Since the FairTax is collected on retail sales and services would it generate enough revenue to keep the federal government running when people cut back on their spending during tougher economic times? What I learned in educating myself regarding the FairTax is that spending is actually a more reliable source of revenue for the federal government than is income.

During good economic times lots of people have jobs and everyone spends. But, when times get tough fewer people have jobs. Those who lose their job or are downsized pay less or no income taxes. However, everyone still spends even if they are spending less. And, by collecting the tax at the point of retail sales and service those visiting the U.S. from other countries are contributing to its tax base.

Our Country is in the midst of some pretty turbulent economic times, and the answer from many in Washington is simply to raise income taxes on U.S. citizens. But, imagine what would happen if every visitor to our Country were also paying taxes, every undocumented worker were paying taxes, every person in underground economies was paying taxes with each purchase. The FairTax is not about reducing tax revenue, or even reducing taxes. It’s about spreading the tax base fairly and evenly, and making our tax system transparent and responsible.

The common refrain for several years has been, “It’s a good idea, but it will never happen.” The FairTax is a good idea, and it’s an idea whose time has come. Please investigate the idea of the FairTax. If it makes sense to you, educate yourself on the legislative bill, H.R. 25. And finally, take steps to help effectuate its passage into law. It can happen; it will happen, but will it happen in time to arrest the crumbling of our republic?

So, just how much will the FairTax be? The estimated percentage rate of the FairTax is 23% as an inclusive tax, and 30% as an exclusive tax. What’s the difference, you ask? That’s a very good question, and one that I think our good friend Denis Calabrese can answer better than I. Please give a listen to the short video below and it will all become clear.

What’s going to keep tax exemptions and exclusions from undermining the FairTax system?

That’s a fair question. The goal of the FairTax system is to tax everyone fairly. The same tax will apply to everyone and the few exemptions and exclusions that are written into the bill will apply to everyone, as well. Because of this transparency any attempt to tinker with the tax code will also effect everyone. Lawmakers will no longer be able to use the tax code to divide and conquer the people of this country by excluding or exempting certain groups from paying certain taxes, or heaping additional taxes onto specific groups. Because the tax is collected at the retail level at the point of consumption it applies across the board and the power to manipulate the code, and thus the people, simply goes away. Will it be possible for politicians to tinker with the FairTax? Only if we, as a people, let them.

Investments and savings will not be taxed under the FairTax system. Since education is clearly an investment in a person’s future, it will not be a taxable item under the FairTax.

If you didn’t have to pay taxes on your money when you earned it, and you didn’t have to pay taxes on money invested in education, how inclined would you be to finally finish that degree or how much more determined would you be to see that your child gets a quality education?