The FairTax Bill of 2007(HR-25) "as written" is the best way to go. The more you tack on to the bill the harder it is to have implemented. This bill can be passed by simple majority of the House and Senate and then signed by the President. It will become law and implemented. The bill repeals all the income tax laws that use the 16th ammendment as its base.
!.) To require the repeal of the 16th ammendment as part of the passage of HR-16 would require a 2/3 majority of each of the House and Senate, signed by the President and THEN ratified by 3/4 of all 50 States!
2.) There is already another bill in the House to repeal the 16th ammendment. It will be much easier to repeal the ammendment after the FairTax is in place.
To add provisions to the bill require a balanced budget, reduce spending or similar items would kill any type of tax reform. Once the American public see exactly how much federal taxes they are paying, b great deal of pressure can be placed upon Congress to reduce SPENDING. The FairTax includes a provision to display the actual tax amount on each receipt or invoice.
While a NRST is considered a regressive tax, the FairTax includes the rebate feature which returns the federal sales tax , in advance to the household that would be paid up to the poverty level for the size family. This makes the FairTax a progressive tax. The actual amount of tax each household will pay will depend on "how the money is spent" Low income families can purchase used items (clothes, autos etc) and pay no taxes on these items. Therefore, they may not spend their entire rebate of tax dollars on tax but have extra money to buy needed items. They effectively would pay ZERO taxes. The wealthy would not spend very much money on used items or many "low priced items" and would therefore pay taxes on everything they buy. If they want to go out of the country to buy items and bring them back into USA, they will have to pay the tax when they go through customs. If they buy an auto in Europe and drive it around on vacation then bring it back into USA, it will be considered as "new" when the vehicle is registered and tax collected. The wealthy will spend a great deal of money each year and therefore, pay a great deal more in taxes. The money that they do not spend, but rather invest or save, will be used as loans or capital improvements to generate more products for sale to others. This will also generate more tax revenue.
Businesses do not pay taxes now. The tax they forward to the government is merely just another "cost of doing business" the same as raw materials and is passed on to the consumer. This embedded tax and the tax compliance costs related to its calculations etc range from 19% to 26% depending on the industry. (average is about 22%) These "costs of doing business" under the income tax system would be eliminated. The average person never sees this as a separate charge. It is built into the overall price of the goods or services. The FairTax simply replaces this cost, but is shown on the receipt or invoice. The retail price would remain close to the same amount.
The FairTax is a political issue. It is NOT conservative vs liberal, NOR is it Democracts vs Republicians. It is American People vs Politicians. Congress would no longer be able to use class warfare tatics against the American People. They would also lose the reelection campain contributions from the lobbists. It would greatly curtail the lobbist effects on the politicians.
In addition to the above, the FairTax will also:
be revenue neutral to the federal government (gives Congress the same amount of money to spend
bring foreign business to USA
increase the job market as more business are present
help to raise wages to good workers (employer wants to get better workers)
increase Gross Domestic Product by 10.5% first year.
lower tax fraud and abuse
To use a flat tax on income on certain amounts and a retail sales tax for other revenue on certain items would be a mistake. This would give Congress even more ways to steal from the American People. A Flat tax that applies to businesses would still be a third embedded tax (businesses do not pay taxes) that individuals would be paying. WRONG WAY TO GO.