This weekend I finished The FairTax Book by Neal Boortz and Congressman John Linder. This book was another one of those books that really changed the way I look at a certain political issue. In this case, it was taxation. I already supported drastically changing the U.S. tax code to either a flat-rate income tax or a flat tax on consumption, but I lacked a workable plan. Well, apparently these two men have already developed such a plan which is a 133 page bill, HR 25.
The Fair Tax is a flat, one-time tax on products at the retail level. After reading this book, their plan makes so much sense it will almost make you angry that we still have a policy of taxation that is economically wasteful and discourages saving! I don't want to go into too much detail, but the tax would actually cause prices to be about the same. How could this be so? Because corporations pass on their tax burdens to consumers. How so? Read the book, its short and you won't regret it.
The thing that I find most intriguing about this plan is that the most quick retort to a flat consumption task is that it puts a higher tax burden on the poor. With their plan, the tax burden is totally lifted from families living below the poverty line. Every head of household would get what they call a "prebate" which covers the tax payments up to the poverty line. So, if the poverty line is drawn at $20,000, every family would receive $4,600 to cover the tax liabilities up to the poverty line. This avoids making anyone pay taxes on basic necessities.
This plan makes complete sense to me. If it sounds like something that interests you, then I would recommend reading The FairTax Book. Eliminating ALL current taxes, including the IRS (since they wouldn't be needed), and implamenting a 133 page tax code I'm on board, are you?
John Linder with the 133 page FairTax Legislation compared to the current tax code.