Edit: Moderator: moved from Australia to Politics
Here's the way to generate (inside the U. S. economy) "heaps & gobs" of money that will be looking for a place to spent be invested.
America is currently plagued by the problem of joblessness, and in spite of the best efforts of those in charge of remedying it, little, if any, progress is being made. Other countries such as China, Japan, Korea, and others seem not to have this problem to the great extent that the U. S. A. does. America's retail shelves are stacked with cheaper foreign goods that have driven American manufactured goods out of the market. Americans no longer provide many services in the U. S. A. because they have been outsourced to foreign countries such as India because labor costs are much cheaper there.
Methods of taxation in other countries also contribute to the American unemployment problem. Most Americans do not realize the Europeans, Australians, and Canadians (with their GST----Goods and Sales tax), and countless others with a VAT (Value Added Tax) have had a discriminatory tax on American goods and services for decades! This discriminatory tax is 15 to 25% in Europe.
It works like this: every business has many costs, one of which is taxes (payroll taxes, profits taxes, etc.). In the U. S. A., these costs, like all other costs, are included in the prices of our products, but we don't itemize (clearly showing) the specific increment that is taxes. When we ship that product to Europe, etc., they add the VAT to the already tax-laden American product.
Companies in the VAT countries, like American companies, have to pay taxes, but they keep track of the taxes as the product proceeds along the production process. They call the incremental taxes VAT. When the product is put on the retail shelf in Europe, etc., it includes the VAT, and the VAT is revealed to the customer.
Now it gets interesting: when a tax-laden American product (about 22% on average) is put on the shelf next to the EU product, in Europe, the VAT is added to the American product. Now the American product is 20+% more expensive than the comparable EU product! Guess which one sells?
Conversely, when the EU product is exported, they remove the VAT! When that EU product is exported to the US, it sits on the retail shelf in the US with no taxes included right next to the American product with all the taxes included! So, once again, the American product is 20+% more expensive than the comparable EU product, and on our own shores! Guess which one sells?
We have put up with this nonsense for decades, while we debate tariffs on foreign steel and other like products produced domestically in the U. S. A. that must be protected from foreign competition if our domestic industry is to survive. Tariffs and other protectionism measures have not proven to be a satisfactory solution in protecting our domestic job market. The Smoot-Hawley tariff of 1930 was enacted to protect the American farmer from competition from much cheaper imported farm products. It represents the high-water mark of U.S. protectionism in the twentieth century, and it precipitated negative results (retaliation by other countries).
There is a plan all ready to go that, if enacted into law now, will produce the kind of super-rapid economic growth and new job-creation that is sorely needed, plus generate many additional good results for our nation! It is H.R. 25, the Fair Tax Act of 2003. This bill has bi-partisan sponsorship, widespread support among the hard-working taxpayers/voters, and fast growing support within the House of Representatives (over 55 co-sponsors) and Senate.
The Fair Tax will produce these highly desirable results:
· Our nation will enter a period of many years of sustained economic growth with new job-creation unequalled by anything in our past history.
· The Fair Tax plan will bring back a measure of fairness and freedom to America that has been sorely trampled-upon by the Income Tax System (and IRS) for many, many years.
· Receipts from the Fair Tax will be more than sufficient to fund the Social Security System and Medicare, plus enable the government to meet its needs and steadily pay-down the national debt.
The Fair Tax draws on a much larger tax base (our GNP, gross national product each year, when it is sold) than does the income tax; virtually no one will be able to evade paying at the "check-out" register. This will lighten the load for all of us. Under the Fair Tax the "sticker price" of all that you buy will fall 20-30%. So, even with the 23% Fair Tax added on, the cost of living would be no more than it is now, more likely it would be less.
The Fair Tax will:
· Replace the current complex and unfair federal tax system with a simple sales tax.
· Eliminate personal and corporate income taxes and Social Security, Medicare, gift and estate taxes.
· Save taxpayers $250-$600 billion now being wasted in complying with the current tax code.
· Lower "sticker" prices 20-30% by removing the cost of business compliance with the current tax code.
· Make American products more competitive with foreign products. Thus, hurling American manufacturing levels to dizzying heights not seen within recent memory.
· Provide a more stable revenue source and raise the same amount of money for the federal government with the imposition of a 23% sales tax with no loopholes.
· Dramatically lower tax rates for lower and middle-income Americans by pre-bate payments to households to offset the sales tax on necessities.
· Protect and ensure the funding of Social Security and Medicare.
· Repeal the 16th Amendment and eliminate the Internal Revenue Service as we know it. Taxes on income will no longer be constitutional.
· Bring capital investment flooding onto American shores. Business, no longer being taxed, will enjoy America as the most "business-friendly" nation on earth.
Whole-heartedly support House Resolution #25---the Fair Tax reform proposal as a curative solution to relieve the American people of the tyranny of our present tax system (income tax IRS) and put Americans back to work. That would be a great legacy to leave the American people.
The current 7-million-word tax code requires 1,168 pages (2 volumes) to publish, and an additional 6,439 pages of Federal Tax regulations that apply to income taxes. The IRS has created 480 tax forms with an additional 280 to explain how to fill out the 480. More Americans work in tax compliance occupations (CPAs, tax attorneys, etc.) than serve in the entire U.S. Armed Forces. The IRS is twice as big as the CIA and five times the size of the FBI. The compliance costs dwarf the amount of the tax collected. In addition to that, the IRS spends a yearly $10 billion budget. The total national cost of compliance (not counting the taxes paid) is $250 billion yearly. That's $850 per capita of U.S. population.
The Fair Tax reform proposal, which may be fully understood at the website www.fairtax.org,
is the best alternative to replace the IRS. It is a simple (retail only) national sales tax. It is not a VAT (value added tax---applied at every level of the production process). Business-to-business transactions, not being retail, are not taxed. Nothing is deducted from the employee's paycheck. He has to spend it on new goods only, not used goods, for it to be taxed. Thus, one is in charge of one's own "tax destiny."
The individual person is allowed to spend the first $8,860 of his yearly income tax-free (he will get monthly reimbursement refund checks for taxes paid on that amount), $17,720 (for a couple), $20,800 (household of 3), $23,880 (h.h. of 4), $26,960 (h.h. of 5), $30,040 (h.h. of 6), $33,120 (h.h. of 7), $36, 200 (h.h. of 8).
Under this system, "sticker" prices would fall 20-30%, thus, giving our exports a much better competitive edge when sold abroad. This would "kick" the economy into high gear. Businesses (no longer having to send the IRS any money at all) would simply pass the savings on to the consumer, their shareholders, and their employees as higher wages. Forty-five of the fifty states use a sales tax to generate revenue because they know that it is the fairest, simplest, easiest, most cost-effective, most problem-free method of taxation. The state taxing authority in each state would assume the duty of collecting the national sales tax for the U. S. government. Only the retailers file a tax return stating the amount of their sales for the year. For everyone else, April 15 is just another spring day.
Each taxpayer gets a monthly refund check in the amount taxed on his spending up to the poverty line. So, in effect, he is only taxed on his spending above the poverty line. In no case will anyone sacrifice more than 23% of his total income to the sales tax, even if he spends all his income on retail purchases.
Unspent income remains tax-free and available for investment or education expenses. Compliance cost of administering the Fair Tax is only $8 billion yearly. That is a big savings compared to the $250 billion we now pay. The IRS, with all the taxpayer support services that it has made necessary, is intolerably burdensome and expensive.
At the Fair Tax website, don't stop with the first frame. Click on each of the major headings for more complete information. It will take awhile to do all this, but it is well worth it. You will learn everything you've always wanted to know about the economy and taxation, but were afraid to ask!
Then go to www.congress.org
and tell your congressmen that you
want the Fair Tax Act, HR 25, passed into law ASAP!
America, producing an endless supply of high quality, competitively priced goods and services, will have a behemoth-size trade surplus. An ever-expanding economy will shift the balance of payments in favor of the U. S. A. America will be a lender to many, a debtor to none. There will be jobs and income for all who will work.
"There is nothing more powerful than an idea whose time has come." ---Victor Hugo.