Scott Burns of the Dallas Morning News offer three good reasons to support a national sales tax (also know as the Fair Tax) to replace the current income tax system.
1. Liberation of the skilled working stiff. The tax code falls heaviest on people who work hard and are good at what they do.
Burns argues that income taxes fall hardest on skilled men and women who work hard in, and sometimes own, America's small businesses. The current tax system costs small businesses $1,200 in compliance costs per employee every year.
There are millions of people like this. They're good electricians, good storekeepers, good building contractors, good service garage owners -- you name it. Without them, the rest of us couldn't get through the day. They work their butts off only to pay extravagant fees to experts who read the entrails of the tax laws. The burden of time and fees is the single largest thing that keeps these workers from accumulating wealth.
And these men and women don't have high-priced lobbyists helping to create huge tax breaks for them by adding obscure amendments to last minute legislation that no politicians actually read. They just work hard and get socked with high taxes on every bit of their good work.
2. If you don't spend your income, everyone benefits from it.
If you don't spend the money you earn, that means you are saving it. This money then gets invested directly by you or by the institution where you save your hard earned money. Either way, it is productive capital that creates more new jobs being created by our entrepreneurial economy. And this new supply of capital would increase the supply of available money which would in turn bring down interest rates.
3. Greater equity in taxation.
Our current system is a battle of self-interests in a zero-sum game. One special interest group wins at the expense of another in our current system. The only real winners are lobbyists who represent each group who get richer no matter what.
If a national sales tax replaced the payroll tax, young low-wage workers with no health insurance would no longer be pitted against senior citizens who have both health insurance and an income from not working that's larger than low-wage workers get from working. Both political parties fail to recognize that the worlds of work and entitlements are on a collision course.
