HR 25 Fair Tax Review

Dear Editor: Economist Jonathan Gruber was paid millions for research and promotion of Obamacare; $400,000 was from Wisconsin.

President Obama was in the room for Gruber’s Cadillac tax discussion. They couldn’t figure out how to tax Cadillac health care plans. They couldn’t tell the taxpayers about the tax because the bill wouldn’t pass. John Kerry offered the idea of not taxing people, but instead taxing those nasty insurance companies. Gruber, in 2012, on Americans’ lack of understanding economics: “We just tax the insurance companies. They pass on higher prices that offsets the tax break we get — it ends up being the same thing. It’s a very clever, you know, basic exploitation of the lack of economic understanding of the American voter.” Basically he’s saying all business taxes are passed on to consumers.

This means that liberals agree with Alan Greenspan, who said in 2003 in response to a question, “What happens is you impose taxes on organizations, which then deflect them elsewhere. At the end of the day, only people pay taxes.”

All of the taxes that businesses pay end up being added to the cost of their product or service. All of the paperwork, accounting, record keeping, it all gets added to the costs that consumers pay. Gruber knows this, as do Obama and all other economists and politicians.

Passage of the FairTax will remove these hidden costs and eliminate federal deductions from our paychecks. We’ll take home our gross pay minus state income taxes.

Article By: Al Ose

If Americans understood how much it costs the IRS to collect taxes, and how much it costs for taxpayers to file them, they might demand change, an economics lawyer said Friday.

“We’re talking about a massive amount of money,” Dan Mastromarco said at a Heritage Foundation event on tax compliance. “If we put that into a cure for childhood diabetes, cancer — pick your poison — space exploration. What we could do with that money that we just literally throw away.”

The vastness and complexity of the tax code contributes to high compliance costs, a huge number of people intentionally or unintentionally failing to pay the right amount of taxes and a costly burden on the economy. The IRS reports it spends 41 cents per $100 to collect taxes, but the true cost is closer to $45 per $100, or $978 billion, when those factors are accounted for, according to research compiled by Mastromarco.

The code, which consists of 4 million words, is so complex, even the IRS can’t understand it, he said, pointing to a list of questions the IRS’s own taxpayer advocate service was unable to get the answers to. And the IRS could only answer 30 percent of more than 90 million requests for assistance in 2010.

“We really haven’t made this very clear to the American people,” he said. “They don’t see it. They don’t feel it. They don’t understand what this equates to — this is a huge amount of money. This is a good year of economic growth. This is beyond the GDP of many of the world’s countries.”

Mastromarco called for the IRS to disclose a more accurate accounting of the cost of its code to taxpayers, which might wake them up to the costly reality of the tax code.

“The reason nothing’s been done about this, is because we’ve gotten really good at making the pain gradual — making it so that we can’t see it,” he said. “We’re effectively numb to it.”

“Our goal should be to make compliance costs understood and transparent, and painful to the American people,” he added.

Mastromarco is a lawyer who has represented Fortune 500 companies, and has worked as assistant chief council for tax policy at the Small Business Administration and special U.S. trial attorney at the Department of Justice’s tax division.

Tax reform is an issue that may be taken up the new Republican-controlled Congress next year.

Rachel Stoltzfoos

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.

David Leake