DearMember of Congress:
On behalf of the 362,000 members of the NationalTaxpayers Union (NTU), I urge you to support the “Fair Tax Act of 2011,” whichwould promote fairness and economic opportunity by repealing our complicatedand onerous tax system in favor of a national sales tax. Introduced as H.R. 25by Representative Woodall (R-GA) and as S. 13 by Senator Chambliss (R-GA), theFair Tax restores transparency and simplicity to the Tax Code, which would resultin substantial economic and social benefits.
Our current Tax Code, replete with an impenetrablemaze of deductions, credits, and loopholes, has become an impediment toeconomic growth and good government. Under the current system, the withholdingprocess makes it difficult to determine how much of a worker’s earnings are beingused to fund the government. Consumers’ true tax burdens are also obscured dueto levies, like payroll and corporate income taxes, which are embedded into theprice of every good and service. By instituting a sales tax with a simple 23percent tax-inclusive rate, the Fair Tax would eliminate all income and payrolltaxes and make the cost of government plainly visible on cash registerreceipts. This would provide taxpayers with better information and enable themto more effectively hold elected officials accountable for allocating revenueswisely.
The Fair Tax would also eliminate the complexity andhigh rates that dampens economic growth and places us at a significantdisadvantage in the global competition for investment. When combined with statetaxes, American corporations face an average burden of nearly 40 percent, roughly10 percentage points higher than the median rate in other developed nations. Inaddition, taxes on capital gains and dividends create distortions on capitalallocation and formation that steer resources to tax-minimization and away fromproductive activities. By eliminating federal taxes on savings and investment,the Fair Tax would allow companies to reinvest their profits in jobs as well asallowing individuals to set aside more for retirement. At a time when Americansare simultaneously being squeezed by a poor economy and increased competitionfrom emerging markets, the Fair Tax would make the United States a primedestination for investment and growth.
The Fair Tax accomplishes these ends while reflectingseveral features of our present Tax Code. The 23 percent tax inclusive rate isdesigned to replace revenues from the current scheme of income and payrolltaxes dollar-for-dollar, ensuring a stable funding base for government thatwill permit elected officials to methodically pare back wasteful programs whileestablishing an affordable tax rate for the long-term. The Fair Tax alsopreserves every household’s ability to provide for itself, through a universal“prebate” based on the poverty level. This ensures progressivity while also treatingall taxpayers, all income, and all products the same.
By promoting freedom, fairness, and economicopportunity the Fair Tax proposals introduced by Rep. Woodall and Sen.Chambliss would be dramatic steps forward for a tax code in dire need ofreform. NTU applauds the introduction of the “Fair Tax Act of 2011” and weencourage all Members of Congress to work towards its passage in tandem withthe repeal of the 16th amendment.
Sincerely,
Brandon Greife
FederalGovernment 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