Fair Tax II

One of my coworkers lives in Boulder, and is pretty hot on the fair tax. You might remember his response from Congressman Udall.

He inquired about the fair tax of Senators Allard and Salazar.

See the extended entry.

Senator Allard:

Thank you for your letter concerning "Fair Tax" legislation. I believe that the Federal tax burden on hard-working Americans is excessive and overly intrusive, and reform of the IRS is long overdue.

I strongly support a simplified tax system. While I was a member of the Colorado legislature, we implemented a 5 percent flat tax for Colorado. We should take similar action on the Federal level. It is my belief that the tax code should be reformed to the point where American families can file their tax return on a one page sheet or post card. While this would involve the elimination of deductions and loopholes, it would be more than offset by a lower rate.

While I support the concept of a flat tax, there are many details that would have to be worked out. In particular, I want to make certain that any reform is a benefit to the middle class. The vast majority of taxpayers are in the middle class, and they have borne the burden of the current system. Reform should also reward saving and investment.

The "Fair Tax" legislation would implement a national sales tax. I am willing to consider this, and one aspect that I find appealing is the fact that this might permit the elimination of the IRS. However, mechanisms would have to be put in place to ensure that the collection burden on small business would not be excessive, and that the income tax could not be resurrected. The worst scenario would be for Americans to end up with the burdens of both an income tax and a national consumption tax. This is the unfortunate situation in many European nations.

The first step towards a simpler, fairer system is elimination of the current tax code. It would be up to Congress to replace it with a simple, fair system that applies a low rate to all Americans. The replacement system must provide tax relief for working Americans without penalizing marriage or family, protect the rights of taxpayers, and reduce tax collection abuses. Finally, the replacement system must eliminate the bias against savings and investment and promote economic growth and job creation.

Your thoughts will be helpful to me as tax issues are debated in the Senate.

Senator Salazar:

Thank you for contacting me regarding tax reform.

As you know, S. 25, The Fair Tax Bill of 2005, was introduced in the Senate last year. This legislation would repeal the federal income tax, abolish the Internal Revenue Service, and establish a federal sales tax administered by the states.

I agree with you that the Nation's tax code has become too complicated and burdensome. However, I do not believe that abolishing the IRS is a viable solution.

I support making the President's tax cuts permanent for 98% of Americans. I will fight to close unfair tax loopholes that encourage big corporations to move their headquarters overseas to avoid paying taxes, and other unfair tax breaks, while supporting corporate tax changes that encourage domestic investment. At the same time, I will be a strong voice for fiscally conservative policies that don't saddle our children and grandchildren with even more debt.

I will keep your views in mind as Congress debates tax reform policy this year.