As April 15 approaches, we face the annual ritual of filing income tax returns. Most businesses and many individuals have tax professionals do their returns, costing nearly $430 billion each year. This lowers personal income and raises the cost of goods. Among the many benefits, The Fair Tax bill, HR25 and S122, a pending bill in Congress, would eliminate income taxes and tax filing, raise personal income, and lower the cost of retail goods. There would be no more withholding for taxes, FICA, or Medicare and no tax on interest, dividends, capital gains or estates at the time of death. It would free purchasers from keeping records necessary for filing.
The bill establishes a consumption tax that would be paid each time a purchase of new goods or services occurred. The merchants or providers would collect and remit the taxes on a periodic basis, and receive a fee for doing so. Most states have a sales tax already and would use their pre-existing procedures to collect and remit the tax money. Those few states without a sales tax would have the option to set up the necessary procedures or hire it done for them. Check it out at fairtax.org.