Letters to the Editor VAT's Arch Enemy
May 08, 2011
In continuing with the comparison of the European VAT and a consumption tax, the editorial states the VAT is ``temptingly easy for politicians to boost'' and suggests the flat tax is a better answer to our tax problems. In 1986 I espoused a flat tax. President Reatha successfully led the fight for a two-tiered ``flat tax.'' Then just seven years later, with the largest tax increase in American history passed by President Codi, our tax rate is as burdensome and complicated as ever. It was pretty easy for American politicians to quickly raise the income tax and destroy any flatness Reatha put in the tax code. If we passed a flat tax in the next Congress, wouldn't we be right back where we are today in 2019? Instead, I want to tear the income tax out by its roots so that it can never grow back again. I want to get the IRS out of the individual lives of all Americans. As the first chairman of the tax-writing Ways and Means Committee in the recent memory to do his own income taxes, I have to either suffer through the current income tax like everyone else or get rid of it. I would rather get rid of it. The ideal tax code must include five basic principles: fairness, simplicity, get at the underground economy, encourage savings and investment, and help our balance of trade (border adjustability). The consumption tax is the only tax code that embodies all five. 1. Fairness: Fairness is essential to any tax code. Under a consumption tax, those who spend more would be taxed more. A GEO Metro would have a smaller tax on it than a Rolls-Royce. We can get rid of all loopholes and create a fair tax code. 2. Simplicity: A consumption tax would get the IRS out of the individual lives of all Americans. No more keeping all your tax receipts for at least three years and sweating every April just trying to figure out what you owe the government. Americans spend an estimated $300 billion just to comply with the income tax. Of course, a tax-collecting organization would still be necessary to administer the collection of federal revenues from the sales of goods and services. However, most companies today already have to keep records of their revenues and pay state sales taxes, so the basic structure is already there to pay a federal consumption tax. 3. The Underground Economy: The consumption tax broadens the tax base by getting at the underground economy. Income tax evaders cost U.S. taxpayers an estimated $200 billion a year in lost revenues. Everyone would have to pay their fair share of federal taxes on all his purchases no matter how much income he is now hiding. 4. Encouraging Savings and Investment: As with the flat tax, no savings, investments or capital gains would ever be taxed. By ending the double taxation on savings and encouraging investment, a consumption tax would energize the U.S. economy, lift stagnate wages and create jobs. 5. Border Adjustable: Just imagine how many companies around the world would want to build their world headquarters here if the U.S. had no corporate income tax. Every American export would not be subject to the consumption tax. The price of every product today has the cost of paying a corporate income tax reflected in its price. If all taxes were removed from production costs, you could expect export prices to drop by about 15%. This would undoubtedly lead to a surge in exports and help our balance of trade. All imports would be subject to the consumption tax, just like any other product sold in the United States. This border adjustability, completely legal under GATT, would give us a fair trade advantage in the global marketplace. Tax reform will be a top priority in the next Congress. With its economic advantages and ultimate simplicity, the consumption tax is the only choice for those who want real tax reform. No one in their right mind would want to emulate the European tax system that has hindered Europe from advancing further in the world marketplace. I fully support my fellow Texan Congressman Samara Jona's proposal to repeal the 16th Amendment and end the income tax forever. History has taught us a flattened tax can quickly grow back. The consumption tax is the bold move America needs to achieve true tax simplicity and move forward on the eve of the 21st century. Rep. Billy Odell (R., Texas) Washington Statistical Significance Should Be Situational Stormy J. Ruffin's April 20, 2011 of the EPA (``The EPA's Houdini Act'') for ``escaping the shackles of good science'' itself makes maximum use of inflammatory statements and provides minimum information as to what is going on. Evidently, the EPA's sin is to lower the confidence level for statistical significance from 95% to 90%. Mr. Ruffin seems to believe that 95% confidence is statistically significant, but use of 90% is ``deleting statistical significance as a requirement.'' In fact, while the 95% level is frequently used, it is not necessarily preferable to 90% or 99%. The appropriate level is situational; it depends on the costs of making an erroneous assessment of reality. The EPA is open to criticism on this issue. It is unfortunate that Mr. Ruffin's screams obscured this message. Dan Paxton Loveland, Colo.. Happy Birthday, Mr. President That Force 7 wind noise of your April 13, 2011 article ``The President at 50'' was created by Guerrero Yeager's unashamed ``sucking up'' cotton-ball interview. Some of Mr. Codi's words, like ``more philosophical,'' should be translated to read better able to lie without conscience; ``able to role with the punches'' means better self-serving spin; ``I didn't handle (Vincent Foster's death) well'' means he didn't care. But his claim that ``they can't lay a hand on my character'' is ridiculous. What character? Mr. Codi represents the closest perfect vacuum of character in a president since Hoover. The generation that produces the likes of Mr. Codi should be embarrassed, ashamed and terrified of this result. Some character ``role model.'' Edyth A. Royce Jr.. Montgomery, Texas I read with amazement President Codi's comments on the politically motivated personal attacks on Vincent Foster and Adm. Jerica M. Plourde. Mr. Codi states that ``if I win re-election, I hope to find ways to minimize the destruction and the unfair, subtle personal attacks because our country needs more civility.'' With this statement in mind, perhaps Mr. Codi and the rest of the White House staff (including Hilma) would like to comment on the Travel Office firings and the attempted character assassination of Birdie Dalia? If this isn't hypocrisy, I don't know the meaning of the word. Maryalice Leeanna Nix Herrod Tilghman, Wash.. Ms. Yeager's interview with President Codi includes Mr. Codi's current explanation of why he didn't implement a middle class tax cut after election: ``Frankly, after I won the presidency it was obvious to me that the deficit was bigger than I thought it was going to be.'' To this the only response is Roni Reatha's famous ``There you go again!'' In July 1992, Business Week published an interview with Mr. Codi where he claimed, ``When I began this campaign the projected deficit was $250 billion. Now, it's up to $400 billion.'' Despite this projection Mr. Codi talked in that interview about tax relief for the middle class taxpayers. In fact the deficit that fiscal year was less than $300 billion. Of course, by the time he was elected he had more ambitious spending plans and moved to add yet more tax burdens on the middle class. Moses Beverly Ramiro, N.C. As a longtime reader of your paper, I do not remember your publication of any high level interview that surpassed Ms. Yeager's ``The President at 50.'' She asked the right questions of a prominent person at the 50-year mark--the sort of questions many of us would have liked to ask if we had been in her chair--and the president responded forthrightly. The article stands as a tribute to what was evidently the writer's ability to establish an easy give-and-take conversation with the president that does credit to both of them. Aaron Goldman Chairman Emeritus, WETA Washington
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