TAX REFORM OR MORE SNOW JOBS?
A second posting with more Fair Tax income.
In the first section of this subject of tax reform I introduced the Fair Tax to you and explained that your income would increase by the amount now deducted for withholding taxes and Medicare. Some employers might even pass along the amount they are now charged for their share of your withholding taxes.
I want to reveal to you another source of income that will also help to increase your monthly income.
Let me say that all the information I am giving you now is covered in the Fair Tax Book by Neal Boortz and John Linder. You should buy the book and study it. I am highlighting a few details to stimulate you and maybe clarify a couple of issues. I have found a couple of items I question and I will get to those also in future postings.
Now for another source of income. All heads of households will receive a payment each month to advance to them the cost of the consumption tax for the basic necessities of that household for that month.
Explain please: Let’s say you are a married couple and you have two children. At this time, the government has decided it will cost you $25,660 for your basic household requirements. If someone earned or spent below that amount it is defined as below the poverty level.
Don’t worry about the name, it is just the way to establish a figure to say that all income at or below that amount is required to give your family the basics. It has then been decided that a family should not pay sales tax on that amount. It would be unfair and cause a burden in taxation for lower income people. So the bill before congress requires the government to refund you in advance the tax on that amount which is $491.82
a month. Did you look at the withholding from your payroll stub? Let’s say you are having about $350 taken out for taxes: Add to that the $492 prebate and your income will increase almost $850 a month.
When was the last time your income went up about $10,000 per year? The fair tax has been recognized as the fairest treatment for lower income people.
Now let us examine this big increase. Most of that, the $492 will go for the consumption or sales tax. But remember the first lesson, when we get the corporate taxes that are passed on to you out of the sales price the final price you pay at the cash register will be almost identical to the price you paid before so that refund of $850 will really be a net increase in the money in your pocket. Do you know what happens when more consumers have more to spend? More of you can qualify for and afford to buy your own house so real estate will boom. With more money many of you will increase consumption so the economy will increase. Some of you will save some of that money so with increased savings mortgage rates will decline and more of you can afford mortgages which will also help the real estate market.
Without income taxes and taxes on savings more people will take their savings out of foreign deposits designed to skirt our taxes and deposit that money here in US banks. In fact our tax treatment for investment and savings will suddenly become the best or one of the best in the world so lots of money will flow into our banks. This will reduce mortgage rates, encourage investment and growth for our country and you will be much better off. There will be better jobs, a higher demand for your work and you will be very happy.
You can also always buy used items and save paying a consumption tax, it is OK. There will be a lot more spending and lots of taxes will be paid in just from the consumption of a more affluent America.
Tourists will come and they will help pay our taxes through their consumption. People who obtained money by various means whether it was a gift or it was stolen or it was for some unreported sales will now pay for their share of your taxes when they spend the money.
You do not have to worry about Social Security or Medicare any more; it will be funded and is provided for.
OK, that is enough for today. Absorb this and I will come back with some additional information. In the meantime you can read the book and you can go to the web site at www.fairtax.org. There might be a group of volunteers in your town who will explain more of the tax to you.