The FairTax Eliminates The Real Stealth Tax

The WSJ has continued to give press to VATs. Below is a letter I sent to them in response to two letters they published today. As you look @ the alternatives being considered by government it becomes more obvious by the minute how good the FairTax is for America. It should also be just as obvious to you why some politicians resist it.

Dear Editor,

In response to Daniel Mitchell's op-ed entitled "VATs Mean Big Government" James Dominque wrote that "half the country does not pay federal income taxes" & Paul Koning wrote that "the most important argument against a VAT is that it is a stealth tax."

By the standards of your two responders our current income tax system is even worse because the embedded taxes paid on everything we buy in America today is so stealth that most people don't even know they have paid them. Hidden embedded income & payroll taxes (withholding on individuals - both income & payroll taxes, corporate income tax, & employer's share of payroll taxes) and tax compliance costs are the real stealth tax priced into our goods & services & are paid by everyone - even those who think they pay no federal income tax. At least with a VAT people know it is being charged even if they know little else about it.

All of these stealth taxes are eliminated by the enactment of HR - 25, The FairTax Act of 2009. Under the FairTax these embedded taxes will be removed by a combination of increased paychecks (no more withholding of income or payroll taxes for individuals) & reduced prices (no more corporate income or payroll tax payments, or cost of compliance) before the FairTax is added so that purchasing power will be the same as today or even increased for many people.

Receiving your entire paycheck or pension free of federal taxes in an America where both goods & services are provided with no hidden tax component gives America an economic advantage over the rest of the world that is sorely needed.