Letter
An Open Letter to the United States Congress: Support the Fair Tax to Jumpstart Economic Growth!
May 12, 2011
Dear
Member of Congress:
On behalf of the 362,000 members of the National
Taxpayers Union (NTU), I urge you to support the “Fair Tax Act of 2011,” which
would promote fairness and economic opportunity by repealing our complicated
and onerous tax system in favor of a national sales tax. Introduced as H.R. 25
by Representative Woodall (R-GA) and as S. 13 by Senator Chambliss (R-GA), the
Fair Tax restores transparency and simplicity to the Tax Code, which would result
in substantial economic and social benefits.
Our current Tax Code, replete with an impenetrable
maze of deductions, credits, and loopholes, has become an impediment to
economic growth and good government. Under the current system, the withholding
process makes it difficult to determine how much of a worker’s earnings are being
used to fund the government. Consumers’ true tax burdens are also obscured due
to levies, like payroll and corporate income taxes, which are embedded into the
price of every good and service. By instituting a sales tax with a simple 23
percent tax-inclusive rate, the Fair Tax would eliminate all income and payroll
taxes and make the cost of government plainly visible on cash register
receipts. This would provide taxpayers with better information and enable them
to more effectively hold elected officials accountable for allocating revenues
wisely.
The Fair Tax would also eliminate the complexity and
high rates that dampens economic growth and places us at a significant
disadvantage in the global competition for investment. When combined with state
taxes, American corporations face an average burden of nearly 40 percent, roughly
10 percentage points higher than the median rate in other developed nations. In
addition, taxes on capital gains and dividends create distortions on capital
allocation and formation that steer resources to tax-minimization and away from
productive activities. By eliminating federal taxes on savings and investment,
the Fair Tax would allow companies to reinvest their profits in jobs as well as
allowing individuals to set aside more for retirement. At a time when Americans
are simultaneously being squeezed by a poor economy and increased competition
from emerging markets, the Fair Tax would make the United States a prime
destination for investment and growth.
The Fair Tax accomplishes these ends while reflecting
several features of our present Tax Code. The 23 percent tax inclusive rate is
designed to replace revenues from the current scheme of income and payroll
taxes dollar-for-dollar, ensuring a stable funding base for government that
will permit elected officials to methodically pare back wasteful programs while
establishing an affordable tax rate for the long-term. The Fair Tax also
preserves every household’s ability to provide for itself, through a universal
“prebate” based on the poverty level. This ensures progressivity while also treating
all taxpayers, all income, and all products the same.
By promoting freedom, fairness, and economic
opportunity the Fair Tax proposals introduced by Rep. Woodall and Sen.
Chambliss would be dramatic steps forward for a tax code in dire need of
reform. NTU applauds the introduction of the “Fair Tax Act of 2011” and we
encourage all Members of Congress to work towards its passage in tandem with
the repeal of the 16th amendment.
Sincerely,
Brandon Greife
Federal
Government Affairs Manager
108 North Alfred Street Ø Alexandria,
Virginia 22314 Ø Phone: (703)
683-5700 Ø Fax: (703)
683-5722 Ø Web:
www.ntu.org
