FairTax is fair only for the wealthy

A pre-question to deciding about income taxes is are we going to pay for public activities like the armed forces, roads, police and fire protection, social programs and so on with taxes (pay as we go), or with borrowing (income for lenders, here and abroad, and a devaluating U.S. dollar).

The FairTax is fair only to the wealthy. Any working person or firm in Wisconsin must pay income taxes, with no loopholes. The tax system should be progressive: The more I earn, the higher percentage I pay (which will still leave more to me than those paying lower rates).

-- Gordon Cunningham, Madison

Whatever changes, let 's keep it simple

The Sunday Forum package on the Internal Revenue Service, "Overhaul or Abolish, " missed the point.

Let 's face it -- you have to be smarter than a fifth grader. Look at the worksheet for Social Security.

Enter totals from box 5 of your SSA 1099s on line 1. Enter half of it on line 2, then add amounts from the 1040 of lines 7, 8A, 9A, 10 through 14, 15B, 16B and 17 through 19 and 21 and enter this total on line 8B.

There is more. Add lines 2, 3 and 4 and then enter amounts off 1040 of the total of lines 23 through 32 and then enter any adjustments on line 36 on line 6. Now compare lines 6 and 7 and if line 6 is less than 5, you can stop. But don 't believe it. Go and make yourself a sandwich and come back.

Now comes seven more lines of instructions where you get to hone your math skills by taking half of line 12, multiplying line 11 by 85 percent and multiplying line 1 by 85 percent. There is a little less complication on calculating dividends and capital gains on their worksheet, but you get a chance to multiply one number by 15 percent.

You now can look forward to page two of the 1040 where you can get personal by claiming deductions. Finally on line 76 you come up with the amount for which to make out your check to the Department of Infernal Revenue.

Does it make you wonder why many of us need help?

-- Bernard Mixtacki, Stoughton

Those who have most should pay most

I thought Sunday 's Forum columnists were a case of dumb and dumber.

Jon Davis said that the rich actually pay a slightly higher rate than those in the lower and middle income categories. While that is true, it is also misleading.

The pay of CEOs in the last 10 years has gone up 10 times faster than the income of workers, and that 's after accounting for inflation. When you control most of the disposal income, you should pay most of the tax.

From the Journal Business section, we see that for Dane County, 7.5 percent earn over $100,000 and they pay almost half the taxes. If we made the first $100,000 tax-free for everyone and then had a flat tax above that amount, everyone in the top 7.5 percent would remain there.

It 's hard to feel sorry for someone making millions of dollars a year playing a sport when you 're paying $8 for a hotdog.

Al Ose, on the other hand, wants to have a sales tax for everyone. So someone who makes $40,000 a year and needs all of it to raise their family will pay tax on 100 percent of their income. But someone who makes $1 million a year but only spends $100,000 to live will pay tax on only 10 percent of his income. That 's fair?

-- Roger S. Remus, Verona

Tax on consumption would be fairer to all

Since World War II America has morphed from the arsenal of democracy to the arsenal of consumerism. Our system of taxation should be gradually changed to one that taxes pure consumption instead of pure income.

This implies some sort of sales tax or value added tax (VAT), as already seen in Europe. Those who most consume the Earth 's resources should most bear its burden.

A VAT abolishes the need for tax returns or other clerical hassles. Drug dealers or others who do not currently report their illegal income would be forced to pay their share of a VAT if they spend their ill-gotten gains.

Finally, such a tax should not be imposed on basic food or low-cost rental, thereby relieving the poor of most tax. We would still need the IRS, but its role would be less intrusive.

-- F. W. Nagle, Madison

Problem is injustice, not the IRS

Every system can be improved, but I think it 's foolish to suggest that we can live in a workable society without progressive taxation or that government spending is, by definition, bad.

While both Forum columnists mentioned the issue of tax fairness, neither explained its extremes. The top 10 percent of the U.S. population owns 70 percent of the wealth, with the top 1 percent owning an astounding 33 percent. If equally distributed, each household would have an income of $380,100 instead of the median household income of $44,389 (see www.faireconomy.org).

That happened because the top 10 percent can afford to "purchase " their tax cuts and loopholes via contributions to presidential and congressional campaigns. It explains why the top individual tax rate is now 35 percent, half what it was in the 1970s, and that the tax rate on corporate profits is half what it was in the 1960s.

People with high incomes face the lowest tax rate since the Hoover administration. Anybody remember the Great Depression at the same time?

And then there is the issue of how our taxes are spent. The Bush Administration 's 2009 fiscal year budget has 54 percent of our income tax dollars going to past and current military expenditures (for details see www.warresisters.org).

How can we justify these policies when our country is in recession, when 45 million people have no health care and there are hungry and homeless people on our streets?

-- Bonnie Block, Madison

FairTax eliminates need for IRS records

If the FairTax was in place today, the IRS would only administer consumption taxes, which would significantly reduce the cost of running the IRS. You may call it an IRS overhaul, but it would become mainly a collection agency for the FairTax.

The IRS, as we know it, would actually be abolished. Why would it be needed if there would no longer be income tax forms to fill out and file? Under the FairTax, you are not taxed on what you earn but on what you consume.

There would be no need for the IRS to process and keep records of your earnings, to track whether you are married or single, to collect withholding and quarterly payments, to evaluate and track charitable contributions and to collect and maintain a myriad of other personal information.

-- Larry Gilbert, Oregon

Current system is fiscal folly

Isn 't it obvious that an American business must generate enough income to pay its own taxes plus the taxes of all its employees and investors? These taxes are built into the prices of American products sold both here and abroad, making us less competitive in a global economy. We receive nearly zero income on outsourced jobs or imported products.

If a business buys a robot to make things, it is tax deductible. If it hires a worker, it must generate enough income to pay both parts of Social Security, unemployment and workers compensation taxes and the employees ' taxes as well. Does it make sense to increase the burden on firms that create new jobs here, and not on those that don 't?

It is time to consider replacing our present taxes with a national sales tax if it can be made progressive. It is possible. A sales tax would raise money on outsourced jobs and imports and collect more funds from industries that are not labor intensive.

The American government would become a partner in every business selling things here. All industries would then start contributing their share of the costs of our infrastructure, from which they benefit and to which owe their existence.

-- Ralph R. Layman Sr., Madison