Response to the Philadelphia Inquirer editorial in the Nov. 19 Herald, “A job for Congress: Work on worrisome economy.”
This missed the gorilla in the room, the main reason wages have stagnated for our middle class. The U.S. has the worst tax environment in the world — for individuals and in particular for businesses.
Our 35 percent federal business tax is driving jobs offshore. It is the sole reason for the recent so-called “corporate inversions,” or corporate headquarters moving abroad to avoid that tax.
Meanwhile, many in Congress, including our own Rep. Vern Buchanan, ignore the answer right in front of them. With one exception, from 1776-1913 the United States did not tax personal or business income. Instead of taxes on productivity, our forebears taxed consumption.
The logic was simple: The more you spent, the more taxes you paid.
In reality, businesses do not pay taxes. They include taxes among their operating expenses. Those combined expenses determine the price of goods and services.
When prices are forced higher than foreign competition, businesses do what they must to survive, they move to a more business-friendly country. Our good-paying jobs go with them.
Seventy-seven members of the U.S. House of Representatives, and nine in the Senate know the answer. They will be joined by even more in the next Congress. It is called The FairTax Plan (HR25 in the House; S122 in the Senate).
There would be no IRS. Workers would see a huge pay raise, equal to their current federal withholding. The poor would be protected. Everyone’s effective tax burden would be less (because, with no exceptions, everyone would share that tax burden). American businesses would be unshackled to compete globally and bring those good jobs home.
Vern Buchanan is on the House Ways and Means Committee. Tell him to support The FairTax Plan by sending it out of his committee for a full House vote.