Thompson Signals Tax Reform Priority

Fred Thompson, in a letter to FairTax.org, signals that reforming the tax code will be one of his top priorities as president. Notice, though, that he doesn't exactly endorse the FairTax proposal, which would gut the income tax and replace it with a national sales tax.

Mr. Leo Linbeck, Chairman

Americans for Fair Taxation
Dear Leo:

I’ve appreciated seeing the Fair Tax folks when I'm out on the road, as well as their enthusiasm when they've come to my events. Although I wish they’d get my good side when they roll their cameras!

My staff and I have been working with Americans for Fair Taxation for some time now. We share the same belief that the next President should enact a fundamental overhaul of the tax code that makes it fairer, simpler, and more pro-growth. There are a number of ways to do that, and over the years I've looked at many of them.

Congress must begin a serious consideration of real fundamental tax reform, rather than nibbling around the edges. I think the principles and ideas found in the Fair Tax are a good place to start, particularly given the grassroots support it enjoys across the country.

Good luck in Iowa this weekend!

Regards,

Fred Thompson

A rival campaign responds:

Fred Thompson Was For The Fair Tax:

Before He Was Against It:

Before He Was For It Again.

Comments

Thomson is also a big time flip-flopper. He was for fair-tax before he was against it. He was pro-choice before he was against it.

Wow, every repub candidate is a FLIP-FLOPPER.

BTW, where does his trophy wife aspect fit into all this? Is she making him flipflop?

Posted by pm | August 15, 2007 2:57 PM

Well, at least Thompson GOT IT RIGHT. The most problematic aspect of the current tax system is that it grants politicians and lobbyists too much power. The income tax on businesses are passed through to the consumer in higher prices. Dr. Laurence Kotlikoff states that congress is not accountable to Americans because they insist on keeping the system "invisible." He is forecasting devaluation and meltdown UNLESS gov't cuts spending, OR UNLESS congress passes the FairTax (a revenue-neutral bill which, if enacted, will make the true cost of gov't visible).

Posted by Ian | August 16, 2007 1:49 AM

We here in Texas have a state sales tax and it has resulted in NONE! of the dire predictions some have foreseen. There has been no scandal, corruption, or cheating in relation to it. It has funded our state government SPLENDIDLY! We Texans, tourists, illegal aliens, criminals, etc. are all in INSTANT COMPLIANCE!! every time we go through the "cash-register-check-out-line". Virtually no one escapes paying. If it works for Texas it will work for the nation.

THINK ABOUT IT MORE...................................................

Read and Enjoy..................................................

APRIL 15TH????? Let's make it just another Spring day.

HR 25, the Fair Tax Act, is in the House Ways and Means Committee of
congress, waiting to be passed into law. If passed, the Income Tax &
IRS would be abolished and replaced with a national (retail only) sales
tax.

Everyone shoud go to: www.congress.org and tell their congressmen that
they want HR 25 passed into law ASAP!!!! If we all "push together", we
can make it happen. There's nothing to it, BUT TO DO IT!!!!!!

Read and Enjoy.

The FINAL SOLUTION!! for the IRS & Income Tax Problem

50 Reasons I Support the FairTax
(How many reasons can you give for supporting the present obsolete IRS
& income tax system?)

Those Who Know the Facts Love the Fair Tax
"Family Friendly Tax Reform"
Tax Reform with far less pain and much more gain!
Out with the Old Code and in with the New (national RETAIL ONLY sales
tax).

www.fairtax.org

1. It allows you to keep 100% of your paycheck, with nothing withheld
for Social Security and Medicare payments.
2. It eliminates the regressive payroll tax that hurts the poor.
Currently, every one of us is taxed a minimum of 7.65% on our first-dollar of
wages up to $90,000, if we earn that much.
3. It assures that the wealthiest Americans will be voluntarily helping
to fund social security with every last dollar they spend above the
poverty level. Today, earnings are subject to payroll taxes only up to
$90,000. The wealthiest Americans therefore do not pay into the system
above that amount. If their earnings are from investments, no earnings
fund the Social Security system. Under the FairTax, a single purchase
(regardless of the source of the earnings) can result in greater
contributions to the Social Security system than would be paid by an individual
under the payroll tax of today.
4. It provides funding for Social Security and Medicare at a level
equal to or greater than at present, with a stronger and broader tax base.
5. It secures the future of Social Security and Medicare because all
spenders fund it and not just the workers.
6. It eliminates all personal income taxes, payroll taxes, corporate
income taxes, gift taxes, death taxes, and capital gains taxes.
7. It eliminates the income tax and the IRS. Members of Congress and
the public overwhelmingly agree that the current internal revenue code is
cumbersome, intrusive, coercive, and inefficient.
8. It is revenue neutral with the present income tax system, funding
the federal budget at current levels.
9. It will remove an average of 22% of the cost of American made goods
by removing the built-in payroll tax (the other 7.65% of earnings that
employers pay) and other business taxes that are now passed to
consumers as an "embedded" tax of approximately 22% due to the cascading of
income and payroll taxes paid by U.S. employers, at every step of
production, to the U.S. Treasury.
10. It doesn't tax used items ? clothes, cars, homes. Only new items
are taxed when sold by a business to an individual.
11. It is progressive, a "prebate" of the tax amount up to the poverty
level is given to everyone. This means that those spending below the
poverty level have a net gain because the "prebate" exceeds the amount
paid in taxes. (Under the present system they pay the payroll tax even if
they get a full refund of income tax withheld.)

12. It eliminates 90% of the cost of compliance. American families and
American businesses waste an estimated $250 ? $600 billion per year
doing the paperwork necessary to comply with the tax code. That is roughly
$1,000 ? $2,000 annually for every man, woman and child in the U.S.
13. It creates an opportunity for our products to leave this country
costing an average of 25% less, thus increasing our exports, lower our
deficit balance of trade, and increasing employment at home.
14. It encourages investment in companies located in the U.S., thus
providing a home for money already in the US and attracting more. The U.S.
will be the most attractive tax-free haven in the world for doing
business. American companies will return from offshore and overseas.
15. It encourages repatriation to the U.S. of money held by U.S.
individuals and companies now in foreign countries, with no tax consequence.
16. All 290 million Americans and 51 million visiting tourists fund
Social Security and Medicare with their purchases. Today only 110 million
workers fund these programs via deductions from their paychecks.
17. The broader tax base includes the ten percent of our economy, an
estimated $1 trillion, that today is underground or under the table.
Under the FairTax, the illegal drug dealer will pay his tax just like the
rest of us when he buys his sunglasses, BMW, and other items, as will
those who do business for cash.
18. It allows families to save more for home ownership, education, and
retirement. An average family making $50,000 will have $7,500 more
spendable income.
19. It makes educational tuition a tax-free expenditure of tax-free
income.
20. It makes American products more competitive overseas by removing
the embedded tax from them, thus lowering their prices, which compensates
for low foreign wages.
21. It makes American products more competitive at home by removing the
embedded tax from them, compensating for the low cost of imported
products not burdened by taxes imposed by exporting countries.
22. It removes the need for formal 401-K's, IRAs, HSA, etc. Anyone will
be able to set up any kind of savings or investment account without
regard to taxes or the government.
23. It frees churches and other non-profit organizations from the
expense of filing tax returns and paying their half of Social Security and
Medicare payments for employees. There will no longer be any 501.c.3 or
501.c.4 non-profit tax status, because there will be no more tax to be
exempt from.
24. It restores to churches and non-profit organizations the 1st
Amendment right to engage in free speech, without fear of losing their
tax-free status.
25. It gives individuals and businesses the right to donate as much as
they want to in a given year to charitable causes.
26. It restores the 4th Amendment, protecting against unreasonable
searches and seizures, from which the IRS presently is exempt.
27. It restores the 5th Amendment, which guarantees the right to due
process. Under current systems the IRS has their own courts with their
own set of rules not included in the 5th.
28. It cleans up a major flaw in campaign financing, eliminating
campaign donations for "tax favors".
29. It eliminates wrangling in Congress over tax cuts, the tax code,
and who is or is not paying a fair share of the tax bill.
30. It encourages work by letting workers keep 100% of their earnings
and giving a rebate, to boot, making the notion that the more you work,
the more money you have, a reality, unlike the current system where
welfare is lost when you go to work, so your first dollars earned after
taxes just offset what you were currently getting in welfare, making you
no better off.
31. It allows more of the lower income families to become home owners
by allowing a second job income above their current income (all tax
free) to be applied to a mortgage. Money for down payments for homes is
also saved totally tax free so that it will accumulate faster.
32. It allows families to retain farms and businesses in the hands of
those who built them through the elimination of the death tax.
33. It allows families to help each other out tax-free, by eliminating
the gift tax.
34. It encourages individuals to self-insure, making the health system
more direct pay (no 3rd party pay), thus bringing costs down.
35. Without FICA to pay, most states, counties, municipalities, and
school districts will see a large increase in their state budget revenues,
additionally lowering the overall tax burden (State & Federal) for most
Americans.
36. It assures that no American will find, at the end of the year, a
need to get a loan to pay taxes as an alternative to penalties, interest,
or cheating.
37. It restores individual privacy. The government no longer needs to
know where you work, what you are earning, and what you are doing with
it.
38. It eliminates the need to have a "marriage" clarification declaring
who you live with, as that has no bearing at all on a state or federal
sales tax.
39. It eliminates the need for courts to decide which divorced parent
gets to take the tax deduction for children.
40. It reduces production costs for farmers and other subsidized
businesses, leading to a reduction in subsidies, thus reducing the federal
budget.
41. It eliminates the administrative costs incurred by states in
collection of state sales taxes because states will piggyback the state tax
collection onto the national tax collection, for which they are
compensated by the FairTax ?% administrative cost give-back. [Doesn't this go
to the retailers?]
42. It results in a windfall profit for many of those holding taxable
corporate high interest bonds at the time of passage of FairTax, since
they will not be taxed under FairTax. (A higher interest rate is usually
paid to entice investors to buy the corporate bonds rather than go with
the lower interest, but tax free, municipal bonds, now.)
43. It shifts the tax to consumption, which consumption tables over
time show is more stable than income, therefore the tax revenue stream is
likely to be a more stable and predictable amount.
44. It results in Federal Reserve rates being based on current
consumption, which is rather stable, instead of future earnings, which are less
predictable, resulting in surer inflation prevention.
45. It allows for better planning by businesses, because they no longer
have to consider tax implications for everything they do.
46. It makes higher employment or better compensation possible in the
small business sector where today it costs approximately three dollars
in compliance costs to pay one dollar in payroll and income taxes.
47. It moves many now providing tax preparation, advice, accounting,
planning, and records maintenance into an expansive economy where they
will be producing goods and services. There they can add to the standard
of living of all Americans and likely earn more than they do currently,
instead of shuffling paper for the government (and not contributing
anything economically to society).
48. It relieves citizens of the risk of facing the shift in burden of
proof that is so common with the current system, i.e., the taxpayer is
guilty unless innocence can be proved, when even IRS staff sometimes
give conflicting interpretations.
49. It's simple, unambiguous, and certain, the opposite of the current
tax code.
50. It's good for the environment. It reportedly would save about
300,000 trees a year that are needed to produce the paper for the IRS
compliance and tax forms, enough to reach around the equator placed end to
end 28 times. Also, since it taxes only new items, it would encourage
buying tax-free pre-owned cars, clothes, furniture, houses, etc. Reuse is
good for the environment, too.

Best Regards,
John Paul McDaniel

Go to: www.fairtax.org

PLEASE CONSIDER THIS ALSO:

22% of all that you buy currently is tax / tax compliance cost. When that cost goes away (under the Fair Tax) the price of your $1.00 item (purchased at Wal-Mart, for example) drops in price to 78 cents (without damaging the profit margin).

1.23 X 78 cents = 96 cents.

Seeeeeeeeeeeeeeee!!!! Even with the 23% Fair Tax added on, your originally $1.00 item is now 4 cents cheaper.

The "out-of-pocket" cost of living , under the Fair Tax , will be no more than it is now.

Under the Fair Tax there are NO LOSERS, only winners, the difference being that some win BIGGER!!!! than others due th their increased FRUGALITY.

Best Regards,
John Paul McDaniel

Go to: www.fairtax.org

Posted by John Paul McDaniel | August 17, 2007 5:25 PM

What You Lose Under the FairTax

1. The Home Mortgage tax deduction - no more deduction your mortgage interest - no incentive to buy a house.
2. The Per-Child tax deduction for dependants - no more help for large families.
3. The deduction for State and Local taxes - tack on the taxes.
4. The College Tuition tax deduction - sorry kids.
5. Roth IRA - will be taxed twice because your money is taxed again when you spend it.
6. Charitable Contributions deductions - no help for the faithful.
7. Child Care Credits - no more help for single moms and poor families with kids.
8. Refinancing Points deduction - no more incentive to refinance.
9. Health Insurance Premiums deduction - no more help for the sick.

What You Gain Under the FairTax

1. New 30 percent tax on every New House or property you buy.
2. New 30 percent tax on Cars, Boats, Campers, Home Appliances, TV's
3. New 30 percent tax on Food, Clothing, Shelter, Rent, Electricity, Gas, Phone Service
4. New 30 percent tax on Medicine, Surgical procedures, Hospital stays, Dental Services
5. New 30 percent tax on Legal Services, Trial Services, Legal Advice, Legal Winnings and losses.
6. Double Taxation on Roth IRA's or retirement money you took as a lump sum.
7. Your consumption is now directly linked to inflation - prices go up - your taxes go up.
8. Interest on Credit Cards, Loans, and Mortgages now taxed at 30 percent on top of what you owe.
9. You now have to pay the government for permission to live in America by paying taxes on all you consume.

For more Dirty Little Secrets of the FairTax see: fairtaxfraud.com

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