by Dennis Aubuchon

Created on: April 17, 2009   Last Updated: April 20, 2009

Today the economy is in need of changes and what those changes will be are yet to be decided in many respects. Each action being taken by Congress now and in the future will change the way our economy operates and either fails or succeeds. It is important that decisions being made by our government officials at the state and federal levels be the right ones. Decisions made must be made on sound principles and accurate information. Among the changes being considered is what is called the fair tax act of 2009. For more information about the status of the fair tax proposal action in Congress you can visit

www.fairtax.org.

I do not propose to know all the answers to such a system but the current complexity of our tax system needs to be changed. Whether this involves the implementation of the fair tax which amounts to a consumption tax or something else, our economy needs help. There has been much discussion over the years about a fair tax system and this year is no different. There are both negative and positive aspects of a fair tax system. However, many times statements are made but
are not supported with the data on which the statement is based.
The current legislation includes HR 25 and Senate S296.

The fair tax is a subject that for the most part I believe the public does not understand what it is and what it would change. This article will discuss what is in the present legislation as it is now worded and provide some insight as to what it represents in terms of changing the amount of taxes we now pay. Some say that to create a fair tax system that a constitutional amendment would be necessary to affect the current income tax system ratified through the 16th amendment to the U.S. Constitution. While I am not a constitutional expert on what it takes to abolish an amendment to the Constitution I believe it is not a simple process.

I am not proposing adopting or rejecting this piece of legislation but it is one which must be carefully weighed as to the benefits and negatives. The basic premise is to eliminate income taxes, payroll taxes, estate taxes and gift taxes among others. While this may appear to be a good thing the consequences of taking such action must be carefully weighed. There are currently eight points for accepting a fair tax system and thirteen points to reject it. These are the same on several sites. Below is listed these points and my opinion in general on the positive and negative.

Yes

A national sales tax discourages consumption, leading to a conservation

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