This year, we observe the 100th anniversary of the income tax (the 16th Amendment). In 1913, only a very small percentage of wage earners were subject to the tax. As time has gone by, practically all of us have come under expanded provisions, including withholding and payroll taxes.
What started so innocuously in 1913 has become a dead weight on our economy. President John F. Kennedy said, “the largest single barrier to full employment of our manpower ... and to a higher rate of economic growth, is federal income taxes.”
In an era of sluggish economic activity and depressed federal revenues, Congress is turning a critical eye to the income tax. Right now we have several “fixes” vying for the spotlight, including tweaking the current system, various flat tax plans, VATs and the Fair Tax.
The Fair Tax is the only plan that replaces the income tax, and it does so while exempting the tax on the first $30,000 of spending for a family of four. Calculations for 2009 and 2010 also show it would have brought in more federal revenue than all of the taxes it replaces because of slumping employment.
Quoting JFK once again, “Let us not seek the Republican answer or the Democratic answer, but the right answer.”
Your representative, Ron Kind, has a critical role to play in these discussions, sitting as he does on the House Ways and Means Committee, where all tax reform must start. Ask him to support the Fair Tax and report it out of committee for congressional debate.