Americans aren’t very happy about taxes. A Pew Research survey conducted in April 2017 shows that tax reform ought to be pretty high on every politician’s list of priorities. Will any meaningful reform happen? That remains to be seen. When it comes to Washington, rhetoric often trumps substance, especially if you don’t speak up and demand real change.
There’s no question the problem exists. It doesn’t matter which side of the political aisle people are on; there’s a lot of dismay on both sides. And a lot of misunderstanding.
Almost two thirds of the Pew respondents, 62%, said they are bothered “A lot” that some corporations don’t pay their fair share. The very wording of the question adds to the confusion about who pays taxes. Corporations don’t pay any taxes, even those that send huge checks to the US Treasury. In fact, they are collection agents for the government. The income taxes they and their suppliers pay are built into the prices of whatever they sell to their customers. It’s their customers who ultimately foot the bill.
Why not skip all the confusing in-between steps and tax consumers directly and transparently as the FairTax® would? The FairTax is a consumption tax, not an income tax. Income tax is a convenient way for the government to make companies a buffer and easy scapegoat between itself and the citizenry. Unlike consumption taxes, which are upfront and transparent, whatever income tax a company pays is buried in the price of the goods or services it sells.
Income tax has opened the floodgates to create a mind-boggling maze of tax system rules and regulations. Those rules become the arena for lobbyists and politically connected cronies to devise tax avoidance schemes. International corporations play shell games with their income to allocate as much income as possible to places where their income is taxed the least. But, you can’t blame them. They’re doing what the crazy rules encourage them to do. It also means Americans lose a lot of jobs and economic growth to other parts of the world. Of course, the lobbyists and lawyers make out like bandits.
The wasted energy, economic drag, cronyism, and corruption that the income tax makes possible could be avoided with the FairTax. The FairTax is a consumption tax. It would replace the income tax, the Social Security tax, and the inheritance tax. It would be charged at the retail level on new goods and services. It would be completely transparent just like the sales tax on your store receipt is now. It’s simple. The collection system is already in place in almost every state. No tax returns for households to file. No withholding from your paycheck. No estimated tax payments.
Maybe, as tax reform moves ahead, the government will get away from the complexity that has ballooned the tax system to over 75,000 pages that no one fully understands. Instead of schemes that fiddle with brackets, deductions, different treatment for different entities, loopholes, and other complications, the FairTax offers a far better alternative.
The Executive Branch has said that now is a once-in-a-generation opportunity to reform the tax system. Don’t let that opportunity slip away. Remind your elected officials that the FairTax is a better, simpler solution to tax reform than simply modifying the current mess.