FairTax - Wisconsin

To All Seniors,

As a senior that will be retiring in a couple of years, I’m very interested in the question of Social Security funding for the long haul. There is a solution at hand for the projected funding shortfall. It is in a bill now before Congress called the FairTax bill (HR 25/S 1493).

This is a proposal for a national sales tax that includes a rebate to untax spending up to the poverty level and removes all taxes on retirement, Social Security, interest and investment income. We seniors will also be able to take our savings out of our IRAs and other tax deferred savings accounts without any tax or penalty.

A Harvard University study concluded that, because the FairTax removes the cost of business compliance with the current tax code, prices of U.S. produced goods and services will decrease an average of 22 percent within six months. In essence, we will have more money in our pockets because of the rebate and elimination of taxes on our income, and we will be able to buy the things we need at prices that will be 22% lower.

Of course, we will pay a sales tax on our purchases like everyone else, but we will be able to afford it due to our increased income and lower prices. (Only new items are taxed under the FairTax. There is no sales tax on the purchase of used items, like used homes and cars.) Because we seniors generally have already purchased most of the things we will need for our retirement, we will avoid paying the tax to accumulate such things.

NOW THE |REALLY GOOD NEWS: Where will the money come from to fund our Social Security checks? Under the current tax code we have 110 million working people paying into the Social Security program. Under the FairTax we will have 341 million people paying into Social Security because everyone contributes into the program as they purchase everyday goods and services. [The US population is 290 million people and 51 million tourists visit our shores annually.] 341 million/110 million = 300% increase or 3 times more people will be paying into the system.

Included in the group that today don’t pay taxes and don’t contribute to the Social Security program are millions of individuals that work "under the table" or are involved in pornography or illegal drugs. These groups alone represent ten percent of the total U.S. economy. Under the FairTax they will pay taxes like everyone else. Due to the endless loopholes in the current tax code many others don’t pay taxes or contribute to the Social Security program. The FairTax has no loopholes so everyone will contribute.

How can there be so much good news? Where is the catch? The answer is that, the current tax system is so complicated that it costs Americans $250 billion to $500 billion (depending on what cost is included) each year to comply with the law. In contrast, the cost to comply with the FairTax is $10 billion annually. All those savings come back to us as lower prices and lower personal compliance cost.

Another very significant benefit of the FairTax will be an economy that is growing at a much faster rate than will occur under the current tax code. Due to removal, via the FairTax, of the tax compliance cost and the resulting decrease in prices of U.S. produced goods and services, America will be able to compete in the international market place much more successfully. Companies and jobs will flow back to America bringing prosperity and increased spending. This greater spending will all contribute to tax revenues and help support the Social Security program.

There are many other advantages to the FairTax. For more information and to view the $23 million in research on the FairTax go to www.fairtax.org.

Roger Buchholtz

P.O. Box 141 / 5620 Clato St.

Kalamazoo, MI 49004

phone/fax: (269) 345-0950, eFax: (413) 294-3359

cell: (586) 530-3298