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Banned
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Originally Posted by kutulu
.......The people behind this have a lot of money at their disposal. It would be really nice if a group could form to oppose the fair tax.
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Hopefully, there already is a group opposed to this. It is called the majority......
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http://www.chron.com/cs/CDA/ssistory...siness/3162191
May 2, 2005, 7:09AM
TAX REFORM
Shopping for fair taxation
...............Wright is the executive director of Americans for Fair Taxation (www.fairtax.org), a group backing legislation to replace all federal income, payroll and corporate taxes with a 30 percent national sales tax on all new goods and services.
Supporters say the tax would free Americans from mountains of paperwork, eliminate loopholes and tax fraud, encourage savings and fatten paychecks. House Majority Leader Tom DeLay, R-Texas, likes the idea, and President Bush says he's open to the suggestion. It also has received a qualified endorsement from Federal Reserve Chairman Alan Greenspan, who believes the plan would increase Americans' savings.
"We're not raising taxes here," said Wright, a folksy Florida resident who previously ran a Texas advertising agency. "We're just taking all of the taxes people are currently paying and making them extremely obvious at the bottom of their retail sales receipts. And nobody's taking anything out of their paycheck anymore."
Wright said DeLay and House Speaker Dennis Hastert, R-Ill., have pledged to get the tax bill passed by the end of 2006.
"As far as we're concerned, we're in the endgame right now," he said.
But not if the nation's retailers have a say. They don't want the job of federal tax collector.
The National Retail Federation argues that a national sales tax would cause "sticker shock" that would depress retail sales.
"This is a do-or-die issue for many of our member companies," said J. Craig Shearman, vice president for governmental affairs for the National Retail Federation. "If consumers look at a 30 percent tax and don't buy a product, the retailer is the first to lose, but there are a lot of other companies and workers behind that retailer that are also going to be out of business."
A study commissioned by the National Retail Federation in 2000 concluded that a national sales tax would cause a three-year decline in the economy, a four-year decline in employment and an eight-year decline in consumer spending.
The organization also notes that a study by the congressional Joint Committee on Taxation found that a sales tax of 57 percent would be needed to replace all current federal tax revenue.
Other opponents of the sales tax proposal complain that it is part of a continuing trend to reduce the burden on the wealthy and shift it to everyone else.
After all, the rich have the luxury of saving large amounts of money, meaning it would not be taxed; the middle class and poor have to spend a much higher percentage of their income on necessities.
AARP, the national association representing senior citizens, says eliminating payroll taxes would be unfair to senior citizens "because they don't pay payroll taxes. They've already paid them," said John Rother, policy director for the AARP.
Governors oppose idea
And the National Governors Association has taken a stand against the tax, saying it would "intrude into a tax area that traditionally has been reserved for, and relied on by, state and local governments."
Sales tax proposals have been hovering around the fringes of the tax reform debates for two decades, but the idea has gained enough momentum in recent years to worry opponents.
"A year ago, this was something being promoted mostly by a rank-and-file congressman from Georgia," Shearman said. "Today, it's something where we have a presidential task force looking into it, and we have the chairman of the Federal Reserve discussing it in serious terms.
"That's a lot of progress in a short time, and reason for us to be concerned that this is more than just a hypothetical idea. This is something that's a legitimate threat to the U.S. economy."
If the bill, House Resolution 25, authored by Republican Rep. John Linder of Georgia, becomes law, Paramus, N.J., would become one of the nation's biggest federal tax collection sites. Paramus generated more than $3.2 trillion in retail sales in 2004, the most of any ZIP code in the country, according to marketing information company Claritas.
That volume of spending would generate more than $960 million in sales tax under the Linder plan.
Services such as haircuts, manicures, massages and doctor visits also would be subject to the tax, along with new homes, new cars, food, medicine, gambling chips and lottery tickets. Used cars, previously occupied homes and antiques wouldn't be taxed.
The bill has more than 50 co-sponsors, including DeLay.
Linder describes his plan as the equivalent of a 23 percent tax on income, because a $130 purchase would include $30 in federal taxes, or 23 percent of the bill. To counter the unfairness argument, his proposal includes a rebate provision that would cover the sales tax up to the federal poverty limits.
In March, Greenspan gave a partial endorsement to shifting the tax burden to consumption.
"Many economists believe that a consumption tax would be best from the perspective of promoting economic growth — particularly if one were designing a system from scratch — because a consumption tax is likely to favor saving and capital formation," Greenspan said.............
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