And the winner is…
Out of a possible 80 stars, only one type of tax reform meets ALL of the basic goals for effective and equitable tax reform and that’s the FairTax, with a total of 80 stars.
The next closest proposal, meeting barely over half of the goals (44 stars) was a flat income tax that contains no corporate tax or payroll tax component. This type of flat income tax, in fact, was the plan that I mentioned earlier, that I had championed, before applying a goals-based analysis to all of the tax reform proposals on the table. You can see, as did I, how it falls far short of being either equitable or creating a better economy.
Remember too, that we were very generous with the flat income tax, by assuming that savings would not be taxed, which is really an unlikely assumption. If savings were taxed, then the flat income tax would fall to just above the level of 9-9-9. We were also generous with the flat income tax by assuming that such a tax would remain flat, beyond the next election. Of course the odds of that happening are as remote as the odds that a majority of Congress will actually fulfill all of their election promises. In other words, a flat income tax remaining flat for more than one term of Congress is not going to happen. Remember that Reagan got us to only two tax brackets and we can see how that worked out. In just over two years after he left office one more bracket was added and it was back up to five brackets just two years after that. Today, we’re sitting at seven far more progressive brackets. So when you consider the fact that a flat income tax will not remain flat for long, a flat income tax should rank the same as a less progressive income tax or just barely above the current system.
In third place, with only 20 stars, is a flat income tax that keeps a corporate income tax and/or payroll tax. Of course, we were just as generous in our assumptions with this form of flat income tax as we were with the one that excluded the corporate and payroll taxes. Similarly, when you consider that a flat income tax will not remain flat for long, this proposal is no better than what we have today.
Then there’s 9-9-9, that only manages to beat out a less progressive income tax by two stars. Its convoluted mixture of taxes clearly gives taxpayers the worst of each of the other forms of tax, while providing few advantages. But it’s worse than it appears. Although we gave it 14 stars, that’s very misleading. Remember that our ratings were based only on the immediate changes. Unfortunately, 9-9-9 includes both a personal flat income tax and a corporate flat income tax and we know that neither will remain flat. This makes 9-9-9 the worst of all proposals. It keeps the IRS and offers Congress a clear path back to the high progressive income tax that we have today AND adds a sales tax, on top of that. When you consider that fact, 9-9-9 is far worse than even the current broken system.
When you take the spin out of tax reform, by rating each proposal on goals achieved, the choice becomes obvious. The FairTax is the result of years of research and planning, by many of the world’s top economists, whose mandate was to create the best, most effective and equitable type of tax for Americans. They succeeded. The FairTax is the only tax reform proposal that meets every goal for effective and equitable tax reform. No other tax reform proposal comes close.
The FairTax takes power from lobbyists and returns it to the voters, while eliminating the most feared government agency since the Gestapo. It treats every citizen exactly the same while giving a sustainable boost to the economy. It encourages savings and investment, while giving taxpayers the choice of deferring taxation till they ultimately choose to spend their savings.
The FairTax not only meets, but exceeds every reasonable goal for tax reform. As stated above, no other tax reform proposal comes close.
For more details on how the various tax reform proposals meet these goals, read “The Rich Don’t Pay Tax! …Or Do They?“ (http://www.amazon.com/dp/0615624375/). It’s the book that lays out only documented facts and takes the spin out of tax reform. Learn the details on why passing the FairTax is so critically important.
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