Fair Tax

A coworker of mine got this from his Congressman, Mark Udall.

Dear Mr. XXXXXXXXX:

Thank you for letting me know you support H.R. 25, the "Fair Tax Act of 2005." I appreciate your taking the time to get in touch about this proposed legislation.

The bill would repeal the income tax, employment tax, and estate and gift taxes and replace them with a national sales tax on the use or consumption of taxable property or services. It would set the sales tax rate at 23 percent in 2007, with adjustments to the rate in subsequent years. It would provide for a sales tax rebate for certain families, based on family size and income. The states would be given primary authority for the collection of sales tax revenues, which they would turn over to the Federal government.

I think a national sales tax (or something similar) could have some advantages. It could be simpler to administer, and would lessen the paperwork burden on taxpayers. However, I am not sure it would provide adequate revenue to pay for urgent national defense, homeland security, and other needs. Also, even with rebates, it presumably would mean that people with lower incomes (who must spend a greater proportion of their incomes on living costs) would be paying more than people with higher incomes - just the reverse of the idea behind the progressive income tax. I think these and other aspects should be carefully considered before any decision is made to adopt legislation along these lines.

I don't know if the House of Representatives will debate H.R. 25 during this session of Congress. However, if it does, you can be sure I will give it careful consideration and will remember your views.

Thanks again for contacting me. I see my job as more than voting on legislation. I also want to try to bridge divides and bring people together to solve problems. So, I welcome your letters and e-mails and always listen closely to what you and other Coloradans have to say. For more information, visit my website at http://markudall.house.gov/HoR/CO02/home.htm and sign up for my e-mail newsletters.

Posted by AlexC at May 9, 2006 4:51 PM