OBAMA'S ADMINISTRATION NEEDS TO RETHINK

Following is a letter from Jim Bennett, a FairTax volunteer, regarding the proposed crack down on tax havens and the FairTax solution:

Rather than crack down on tax havens, as the Obama Administration announced it would do on May 4, 2009, we could do better if we, ourselves, were to become the world’s tax haven. And there is a bill in Congress to do just that - The Fair Tax Act of 2009, HR25, S296.

The Obama Administration proposes a series of measures to eliminate deductions for companies that take jobs overseas, combined with reforming the tax credit system. But with 70,000 pages of tax statutes, regulations and revenue rulings, the closing of one loophole necessarily results in the opening of another. The Administration is overly sanguine that adding 800 revenue agents will be enough do the policing job that its proposal would require.

The FairTax, on the other hand, while being fairer to low-income people than today’s tax code, eliminates all taxes on business and investment and repatriates dollars voluntarily. The FairTax replaces payroll taxes, estate, gift and generation-skipping taxes, and corporate and personal income taxes with a national retail sales tax on consumption of all new property and services -except education - once and only once. A rebate to all households with valid social security numbers for tax on consumption for essentials assures the tax is fair to low-income families.

Millions of dollars of research say the tax will fully fund the federal government at current real spending levels. The FairTax would bring trillions of dollars of offshore capital back to the United States in months - without hiring any more revenue agents. The repatriation would be free of federal compulsion.

The Obama Administration needs to rethink its approach.