by Tony Glisson

Created on: October 15, 2008   Last Updated: October 25, 2008

For several years now a few brave members of the US House of Representatives have been trying to pass the little publicized HR 25, a bill which seeks to change forever how we pay our federal taxes. In popular speech it is known as the Fair Tax Bill. The same or a similar bill is before the United States Senate.

The Fair Tax is not a flat tax. A flat tax is perhaps fairer than our present income tax system, but a flat tax continues to tax income. The Fair Tax in HR 25, on the other hand, is a tax on services and new goods purchased at the retail level, a type of retail sales tax. And since wealthy people buy more stuff and more expensive stuff than the less well off, the Fair Tax is a tax on wealth and on the wealthy. * It is also a tax on people who ignore the present income tax system, such as drug dealers and undocumented workers.

With the passage of the Fair Tax, all income earners in the United States would receive 100% of their income, minus any voluntary or state withholdings, with absolutely nothing withheld at the federal level. The 15th of April becomes just another fine spring day.

The Fair Tax also eliminates all corporate taxes, all inheritance and gift taxes, all taxes on interest or dividend earnings, and any and all taxes based on earnings.

A tax on consumption rather than income, the Fair Tax is 23% "inclusive" in the price of all new goods and all services, including groceries, car repairs and doctors' visits. For instance, you go to your big box store and buy a lawnmower priced at $1000.00, you hand the cashier $1000.00, and the store keeps $770.00 and remits $230.00 to the US revenue service (perhaps each states sales tax division will administer this). Then you recall that you have no way to get the mower to your house. So you write a check for $100.00 to have the store deliver it. The store takes your check, thanks you, and transfers $23.00 of it to whatever agency will get it to Washington. And, oh yes, they deliver your lawnmower.

One argument we all hear against the Fair Tax is that it puts an additional burden on the poor, because many of them presently pay no income taxes, and suddenly they will have to pay nearly a quarter of what they earn on everything they purchase. There are at least four reasons why this is not so:

(1) Although it is true that many low income workers do not pay income taxes, they do pay other payroll taxes such as social security and Medicare. The Fair Tax eliminates these payroll taxes.

(2) There would be little or

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