Replace personal, payroll taxes with consumption
Current events illustrate the strategic imperative of the U.S. once again achieving manufacturing independence. Other countries’ wage scales notwithstanding, we can compete and win by reducing non-wage expenses.
We need to subsidize our manufacturing in a manner acceptable to the World Trade Organization. We can do that by relieving U.S. business of the crushing burdens of taxing income. The Fair Tax, a proposal first advanced over 20 years ago, is still the best way to abolish U.S. income taxes and accomplish this goal, while untaxing the poor as a bonus.
Income taxes are expenses to business via corporate, capital gains, personal and payroll taxes, while estate taxes may destroy the business of an owner who dies. Replacing these taxes with a consumption tax, the Fair Tax (HR 25) would dramatically reduce U.S. manufacturers’ expenses. This would allow them to undercut foreign competition, including the Chinese, and dominate international trade.
The Fair Tax calls for a 16th Amendment repeal which would send us back to an era long ago without U.S. income taxes, including the period between the Civil War and the turn of the century—an era known as the “Gilded Age,” which was this nation’s most rapid economic expansion in our history.
The Fair Tax taxes purchases of new items for sale at retail and services while excepting poverty-level spending. This makes it a luxury tax that, by avoiding the purchase of things that aren’t absolutely necessary, would enable one to go through life without paying federal taxes at all.
Relief from personal and payroll taxes would significantly increase citizens’ take home pay. We would experience a lowering of our tax burden.
Spending by the rich and upper-middle-class would finance the country.
Unburdening manufacturing via abolishing the income taxes would free us of reliance on foreign manufacturing.