Sensible Tax Reform: Fair, Simple, and Effective
Federal Consumption Tax
A Federal Consumption Tax
Sensible Tax Reform is a complete redesign of our federal tax system. It will eliminate most of the social-engineering programs that make our existing federal tax system so incredibly complicated. It will end the susceptibility of the system to manipulation by lobbyists and the politicians whom they influence. It will attempt to be tax neutral. It will be tax reform pure and simple.
STR eliminates most of our current federal taxes: the Social Security and Medicare taxes, the business income tax, the estate tax and most personal income taxes. To replace those taxes, the principal federal tax system will be a federal consumption tax (FCT) that will be very simple, fair and also very helpful to the U.S. economy:
- There will be universal taxation of all consumers. Whatever the source of one’s income (whether earned, inherited or borrowed; whether legal or illegal), everyone will be subject to the same rules and the same tax rate when they make purchases for consumption.
- There will be almost universal taxation of most goods and services. Only a few very specific, very limited and very easy-to-understand exclusions and special allowances will exist.
- There will be only a single federal consumption tax: 30%.
- A rebate of the federal consumption tax will be made on consumption up to the poverty level.
In summary, Sensible Tax Reform: Fair, Simple and Effective:
Eliminates:
- Social Security and Medicare taxes on both individuals and businesses,
- Income taxes on businesses and most individuals,
- Estate taxes on individuals, and
- Alternative minimum taxes (AMT) on both individuals and businesses.
It replaces them with:
- A federal consumption tax and
- A fair-and-simple tax on very high incomes.
STR will completely “un-tax”:
- Businesses and
- The poor.
STR will be:
- Very fair,
- Extremely simple, and
- Economically very effective.
We will be able to say goodbye to the massive federal tax code, with its 68,000 pages. Gone will be annual tax-compliance obligation for most Americans and the fear of the Internal Revenue Service. In their place, Sensible Tax Reform: Fair, Simple and Effective will introduce a federal tax system that is fair, easy to understand and which will provide a very strong stimulus to the American economy.
