Americans for Fair Taxation executive director Tom Wright and regional director John Collet met with me Thursday. They are pushing to replace corporate and personal income taxes and Social Security and Medicare taxes with a 23 percent retail sales tax.
No, they’re not nutcases. And they have some compelling claims.
For example, they argue that a consumption-based tax system could cut the estimated $260 billion spent annually enforcing and complying with tax laws by 90 percent — which could be a big boost to the economy. They also argue that the new system would be more progressive, because taxpayers below the poverty line would get a rebate on all their taxes and the burden of paying for Social Security would be spread throughout the population, including the rich (the current system has an income cap on payroll tax collections).
They are aiming to have the change pass Congress in 2006. But Wright acknowledged that the timetable could be hurt by the battle over the U.S. Supreme Court vacancy and the fact that President Bush’s Social Security reform is “in the ditch.”
I have trouble seeing an entrenched Congress and a cautious public going along with such a huge change. Still, our byzantine tax system does needs overhauling, so I welcome this debate. To learn more, go to their Web site at www.fairtax.org.
Posted by Phillip Brownlee
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