Tax reform is a priority agenda item in the 115th Congressional session. In the coming months, we will hear significant proposed changes to the extremely complex income tax laws. One of the hotly debated provisions will be what to do with the corporate tax rate. The current rate of 35% is the highest in the industrialized world. When you add the corporate amount charged by most states the total in near 40%. The average rate levied by other industrialized countries is about 23%. This is a huge disadvantage for American businesses in the global economy. It is driving American corporations and their profits offshore to avoid such a heavy tax burden.
The corporate tax rates currently being considered in Congressional committees and by the president range from 15 – 25%. Here’s my rate proposal – ZERO PERCENT. That’s right, get rid of corporate taxes. Here’s why: For the most part, the end results are that corporations don’t pay it. Only people pay taxes. The corporate tax functions in 3 different ways: 1) Shareholders pay taxes in the way of reduced profits or return on investment. This serves to discourage investing; 2) Workers pay the taxes in the form of lower wages and benefits, or there are fewer workers employed: and; 3) Consumers pay the taxes by paying higher prices for goods and services. Usually it’s a combination of all 3.
The only real beneficiaries of the corporate tax are politicians. It provides good demagogic political fodder to convince constituents those big greedy corporations are forced to pay their fair share of taxes.
An efficient and fair federal tax system is possible. But it’s not reform, it’s replacement. The best answer is to repeal the income tax (16th amendment) ridding the country from a corrupted and inefficient IRS and replace it with a simple and fair consumption tax called the FairTax (HR25/S18). There is overwhelming support for the FairTax by people who understand it. Unfortunately, the primary opponents are members of Congress and K Street lobbyist.
The FairTax plan is a sales tax proposal to replace the current U.S. income tax structure. It is a progressive national retail sales tax with a "prebate'' to ensure no American pays federal taxes on spending up to the poverty level, dollar-for-dollar federal revenue replacement, and, through companion legislation, the repeal of the 16th Amendment. This nonpartisan legislation abolishes all federal personal and corporate income taxes, gift, estate, capital gains, alternative minimum, Social Security, Medicare and self-employment taxes and replaces them with one simple, visible, federal retail sales tax - administered primarily by existing state authorities. The IRS is disbanded and defunded. The FairTax taxes us only on what we choose to spend on new goods or services, not on what we earn. The FairTax is a fair, efficient, transparent and intelligent solution to the frustration and inequity of our current tax system.
With the FairTax there is no April 15 tax filing deadline, no deductions from your paycheck, no record keeping, no tax preparation cost, no requirement to reveal personal information to government. FREEDOM is returned allowing you to make your own financial management decisions on when and how you spend your earnings.
Changing our federal tax structure from a tax on earnings requires a considerable public mindset change regarding taxation. For the first 125 years of our history, except for a couple of brief periods, our countries funding needs were provided by excise taxes and tariffs, forms of consumption taxes. During this period, the U.S. thrived economically and grew exponentially. In 1913, the Sixteenth Amendment was narrowly ratified by the states which gave the Congress “power to lay and collect taxes on incomes.” The proposed amendment was sold on the proposition the tax would be a low amount imposed only on the very rich. Fast forward 104 years. The Federal government is now funded primarily by the middle income productive class.
Understandably, throughout our history there have been legislative opposition to imposing undue tax burdens on lower income families. This has resulted in progressive tax schedules based on levels of income. It was clear to the architects of the FairTax, using focus groups and research, that any tax reform plan must not be unduly regressive. It is generally accepted that a sales tax disproportionally burdens those on the lower income ladder. For any consumption tax plan to be politically acceptable it must take this into account. The “prebate” is an imaginative solution to solve this problem. It provides equality and fairness to all income levels.
Under the FairTax, all Americans consume what they see as their necessities of life free of tax. The prebate is not an entitlement. It is a rebate or refund of taxes expected to be paid in advance at the beginning of each month. For example, spending at the poverty level ($40,580 for a family of four) has a 0% effective tax rate because the annual prebate of $9,333 refunds all the taxes they will pay if their annual spending does not exceed that level.
BOOKS TO READ
The FairTax Book, Saying Goodbye to the Income Tax and the IRS. Copyright 2005
By Neal Boortz and John Linder
FairTax: The Truth, Answering the Critics, Copyright 2008
By Neal Boortz and John Linder
The FairTax Solution, Financial Justice for all Americans, 2010
By Ken Hoagland
The Rich Don’t Pay Tax! …Or Do They? Copyright 2012
By John Gaver
The Income Tax, Root of all Evil
By Frank Chodorov
Wiley Brooks grew up on a small family farm in the state of Mississippi. He earned a degree in business management from Mississippi State University graduating in 1956.
Wiley Brooks was a 20-year career officer in the USAF advancing to the grade of Lieutenant Colonel. He retired from active duty to enter business in 1977. A Vietnam veteran with 156 combat missions, he was awarded the Distinguished Flying Crosses with one Oak Leaf Cluster, the Air Medal with 8 Oak Leaf Clusters, The Meritorious Service Medal, The Air Force Commendation Medal with 1 Oak Leaf Cluster, the Vietnam Service Medal, the National Defense Service Medal.
Beginning in 1978, Brooks entered the real estate profession specializing in property management. In 1982, he established Wiley Brooks Company, a full service real estate firm. He served as broker and CEO until 2002 when he began retirement. The company continues to operate under the management of a family member. In retirement Brooks has remained active in community activities. Since 1999, he has been an active member and Alaska State Director of Americans for Fair Taxation (AFFT), a national organization promoting a federal consumption tax plan to replace the federal income tax.
The corporate tax rates currently being considered in Congressional committees and by the president range from 15 – 25%. Here’s my rate proposal – ZERO PERCENT. That’s right, get rid of corporate taxes. Here’s why: For the most part, the end results are that corporations don’t pay it. Only people pay taxes. The corporate tax functions in 3 different ways: 1) Shareholders pay taxes in the way of reduced profits or return on investment. This serves to discourage investing; 2) Workers pay the taxes in the form of lower wages and benefits, or there are fewer workers employed: and; 3) Consumers pay the taxes by paying higher prices for goods and services. Usually it’s a combination of all 3.
The only real beneficiaries of the corporate tax are politicians. It provides good demagogic political fodder to convince constituents those big greedy corporations are forced to pay their fair share of taxes.
An efficient and fair federal tax system is possible. But it’s not reform, it’s replacement. The best answer is to repeal the income tax (16th amendment) ridding the country from a corrupted and inefficient IRS and replace it with a simple and fair consumption tax called the FairTax (HR25/S18). There is overwhelming support for the FairTax by people who understand it. Unfortunately, the primary opponents are members of Congress and K Street lobbyist.
The FairTax plan is a sales tax proposal to replace the current U.S. income tax structure. It is a progressive national retail sales tax with a "prebate'' to ensure no American pays federal taxes on spending up to the poverty level, dollar-for-dollar federal revenue replacement, and, through companion legislation, the repeal of the 16th Amendment. This nonpartisan legislation abolishes all federal personal and corporate income taxes, gift, estate, capital gains, alternative minimum, Social Security, Medicare and self-employment taxes and replaces them with one simple, visible, federal retail sales tax - administered primarily by existing state authorities. The IRS is disbanded and defunded. The FairTax taxes us only on what we choose to spend on new goods or services, not on what we earn. The FairTax is a fair, efficient, transparent and intelligent solution to the frustration and inequity of our current tax system.
With the FairTax there is no April 15 tax filing deadline, no deductions from your paycheck, no record keeping, no tax preparation cost, no requirement to reveal personal information to government. FREEDOM is returned allowing you to make your own financial management decisions on when and how you spend your earnings.
Understanding the Prebate
Changing our federal tax structure from a tax on earnings requires a considerable public mindset change regarding taxation. For the first 125 years of our history, except for a couple of brief periods, our countries funding needs were provided by excise taxes and tariffs, forms of consumption taxes. During this period, the U.S. thrived economically and grew exponentially. In 1913, the Sixteenth Amendment was narrowly ratified by the states which gave the Congress “power to lay and collect taxes on incomes.” The proposed amendment was sold on the proposition the tax would be a low amount imposed only on the very rich. Fast forward 104 years. The Federal government is now funded primarily by the middle income productive class.
Understandably, throughout our history there have been legislative opposition to imposing undue tax burdens on lower income families. This has resulted in progressive tax schedules based on levels of income. It was clear to the architects of the FairTax, using focus groups and research, that any tax reform plan must not be unduly regressive. It is generally accepted that a sales tax disproportionally burdens those on the lower income ladder. For any consumption tax plan to be politically acceptable it must take this into account. The “prebate” is an imaginative solution to solve this problem. It provides equality and fairness to all income levels.
Under the FairTax, all Americans consume what they see as their necessities of life free of tax. The prebate is not an entitlement. It is a rebate or refund of taxes expected to be paid in advance at the beginning of each month. For example, spending at the poverty level ($40,580 for a family of four) has a 0% effective tax rate because the annual prebate of $9,333 refunds all the taxes they will pay if their annual spending does not exceed that level.
BOOKS TO READ
The FairTax Book, Saying Goodbye to the Income Tax and the IRS. Copyright 2005
By Neal Boortz and John Linder
FairTax: The Truth, Answering the Critics, Copyright 2008
By Neal Boortz and John Linder
The FairTax Solution, Financial Justice for all Americans, 2010
By Ken Hoagland
The Rich Don’t Pay Tax! …Or Do They? Copyright 2012
By John Gaver
The Income Tax, Root of all Evil
By Frank Chodorov
Wiley Brooks grew up on a small family farm in the state of Mississippi. He earned a degree in business management from Mississippi State University graduating in 1956.
Wiley Brooks was a 20-year career officer in the USAF advancing to the grade of Lieutenant Colonel. He retired from active duty to enter business in 1977. A Vietnam veteran with 156 combat missions, he was awarded the Distinguished Flying Crosses with one Oak Leaf Cluster, the Air Medal with 8 Oak Leaf Clusters, The Meritorious Service Medal, The Air Force Commendation Medal with 1 Oak Leaf Cluster, the Vietnam Service Medal, the National Defense Service Medal.
Beginning in 1978, Brooks entered the real estate profession specializing in property management. In 1982, he established Wiley Brooks Company, a full service real estate firm. He served as broker and CEO until 2002 when he began retirement. The company continues to operate under the management of a family member. In retirement Brooks has remained active in community activities. Since 1999, he has been an active member and Alaska State Director of Americans for Fair Taxation (AFFT), a national organization promoting a federal consumption tax plan to replace the federal income tax.