Letter: FairTax a solution to IRS inequity
Last week, the Gazette-Journal had a story about a Mathews couple who had been charged by the IRS with tax evasion and subsequently pleaded guilty. They had, unsuccessfully apparently, tried to relieve their tax burden using some applications of the 56,000 pages of IRS statutes. A few days ago you may have read that GE had all of its tax burden relieved and even ended up with a 3.2 billion dollar refund! To quote an editorial in another paper:
The nation’s largest corporation benefits from something the average taxpayer does not—the best tax department money can buy. According to David Kocieniewski of the New York Times, that team includes former officials of the Internal Revenue Service and Treasury Department, as well as aides to members of the congressional committees who wrote the tax codes. No wonder the federal government ends up owing GE money.
To accomplish this feat, part of what GE has done is to ship about 20 percent of its American jobs to foreign countries where labor is cheaper and regulations are not so onerous. Another factor in this incredible feat of "legal tax evasion" may be GE’s tight relationship with the Obama Administration. CEO Jeffery Immelt has been associated with President Obama since he was Candidate Obama. He was just appointed to head President Obama’s newly formed Council on Jobs and Competitiveness.
Our IRS and the federal tax code are out of control. Politicians use the tax code to reward friends and punish enemies. They use the tax code to encourage certain behaviors like buying certain cars or water heaters or discourage others like buying cigarettes or alcohol. More and more exceptions and favors are written into the outrageously long and complicated tax law. Taxes were never meant to be used (or abused) like that, and there is a simple solution: the FairTax.
The FairTax would eliminate the IRS and the millions of words in the current tax code. It would be a tax embedded in any new item or service you chose to purchase. It would be revenue neutral in that it would be calculated to only get as much revenue as had been gotten under the old IRS system. It would probably be somewhere between 15 and 30 percent. This sounds enormous when you think of the 7 or 8 percent sales tax we now pay. The huge difference is that you would get 100 percent of your paycheck—no payroll deductions like FICA, no income tax withheld. The price of the items you were buying would be lower because the taxes the company passes along to you to pay for their corporation taxes would not be there! Corporations would no longer pay taxes as they do now (when and if they do!) so businesses that went to other countries to avoid paying high U.S. taxes could bring their work back to the U.S. The U.S. would once again be an attractive place for corporations to do business. You can easily find more information on the FairTax at the library or on the Internet.
The best thing about the FairTax is that it is fair! No more advantages for the wealthy and well-connected Jeffery Immelts of the world. America the way it is supposed to be: equality for all!