Monday, March 13, 2006
The FairTax Rate of 23% - Too High?
Some Senators and Representatives have been making comments that the 23% suggested FairTax rate is a FairTax “rule” AND that it may not be enough. Here is some food for thought.
In answer to the question: "Is 23% too much?”
Yes, 23% is too much! But that number is the equivalent of what the IRS is collecting NOW from ALL THE TAXES THAT THE FAIRTAX REPLACES. Once the taxpayers see the 23% amount printed on every purchase invoice (for new goods and services), they will demand that federal spending be reduced, thereby reducing that REQUIRED amount of 23%.
The 23% is realistic as determined by a $23 million, 10 year study. These ARE the facts:
In 2003 the federal government collected $1.7 trillion (so that is what they are asking the FairTax to guarantee) which is computed as follows: The GDP was $11 trillion. However only 79.4% is taxable at the FairTax RETAIL level, which is $8.7 trillion. The 23% FairTax on that amount would be $2.0 trillion. After the retailers and state governments get their 1/4 of 1% for collecting this 23% and after the prebate is paid, that will leave the $1.7 trillion, the required GOVERNMENT requested guarantee.
Marv Kuhn, State Director, Volunteer
Americans for Fair Taxation
In answer to the question: "Is 23% too much?”
Yes, 23% is too much! But that number is the equivalent of what the IRS is collecting NOW from ALL THE TAXES THAT THE FAIRTAX REPLACES. Once the taxpayers see the 23% amount printed on every purchase invoice (for new goods and services), they will demand that federal spending be reduced, thereby reducing that REQUIRED amount of 23%.
The 23% is realistic as determined by a $23 million, 10 year study. These ARE the facts:
In 2003 the federal government collected $1.7 trillion (so that is what they are asking the FairTax to guarantee) which is computed as follows: The GDP was $11 trillion. However only 79.4% is taxable at the FairTax RETAIL level, which is $8.7 trillion. The 23% FairTax on that amount would be $2.0 trillion. After the retailers and state governments get their 1/4 of 1% for collecting this 23% and after the prebate is paid, that will leave the $1.7 trillion, the required GOVERNMENT requested guarantee.
Marv Kuhn, State Director, Volunteer
Americans for Fair Taxation
posted by Steve Harris, 7:53 AM
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