True Tax Reform/Cuts

TRUE  TAX  REFORM/CUTS 

         President Donald J. Trump (isn't that pretty) has repeatedly announced his intention to simplify the 'tax code' to a 'three tier' system.  That has a nice ring to it, but it is my firm and fixed opinion, written several times before, that it would still leave in place the IRS (Internal Revenue Service[?]) which is arguably the most corrupt, crooked, and politically oriented department in the Federal Government.  This has become even more clear and public during the last eight years of the PRESBO Administration, where actions, or lack of them, have been used against individuals, companies, and groups deemed to be in opposition to their agenda.

    During the last several Congresses at the beginning of each a bill titled the 'FairTax' bill, and numbered in the new Congress as H-15 and S-18 respectively, was filed at the opening.  The S-18 version has just been filed and according to the office of Senator Inhofe has no co-sponsors yet.  The H-15 was filed earlier this year and according to the office of Congressman Bridenstime had already 25 co-sponsors, including him and three of the four others from Oklahoma.  The 'FairTax' would allow the IRS to be abolished (except for the few years to assess possible fraud in old returns)!

   Historically, the income tax was authorized by the ratification of Amendment XVI on February 3, 1913 which read: "The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration".   The law establishing it set the initial tax rate at less than 1% and applied only to those with incomes reportedly over $100,000.  My how it has been changed, and not for the better!  Further, as stated, it has become the method of corrupt administrations to penalize or neutralize those they perceive as opposing their agenda or election aspirations.  In the last few years this has expanded exponentially, as has the number of employees, and at great wasteful expense.

    One wonders if the PRESIDENT has ever even heard of the FairTax, or had it explained in detail.  In the hopes that someone with access to him and his staff of tax law advisors here is a brief summary: There shall be an 'embedded' tax on the first retail sale of all goods, initially estimated at 23% of the price.  The result should be "revenue neutral" and pay for all proper government expenses.  On January 1st following enactment of the FairTax law, the income tax shall cease.  (In my opinion, the bill should provide that the income tax law is repealed on passing of the FairTax bill).  Thus ALL present taxes, and expenses, of income tax would disappear.  Payroll checks, or deposits, would be in full, without deductions except for company programs.  The tax on sales would be forwarded by the vendors to the appropriate State tax department which would deduct a, initially 0.5%, fee, and forward the balance to the U.S. Treasury designated office.

   Each home would receive a "prebate" ,monthly in advance, of the amount of FairTax estimated for living expenses at the poverty level income, based on the calculated amount for the local area, and on the number of individuals in the home.  Thus each head of home would submit, probably on a post card, each year a report of the number in the house.

   Estimated savings in expenses to meet present income tax reporting requirements are in the hundreds of billions of dollars.  The savings in such expenses on businesses are believed to more than offset the cost of the tax, thus resulting in an actual reduction in price of goods.  There would be no tax on purchase of used items, such as cars, trucks, boats, houses, etc.  It is believed that it would result in the greatest economic boom in the history of the World.  Anyone having access to the Trump Administration, please pass this on.

End

Composed January 23, 2017

Robert W. McDowell, Jr.