Iowa caucus and the UN-"Fair Tax"

Okay, the Iowa caucuses are coming in two days and I'm going.

However, I'm alarmed--I thought I finally found a candidate I could support until I learned this week about the "Fair Tax" legislation backed by some of America's presidential candidates (and click here to see who in Congress supports it from the Fair Tax Web site).

If you haven't heard about it, the "Fair Tax" act will eliminate income and business taxes BUT replace them with a 30% national sales tax. Supporters claim it makes taxes "fair," but analysis by FactCheck.org shows it will help only those who make more than $200,000 per year. How is this fair? It's not.

Don't be fooled--just because it's called a "Fair Tax" does not make it so. We all know this is a favorite tactic in politics--to name bills the opposite of what they really are in order to fool voters.

Under the "Fair Tax," all food is taxed. We will pay 30-34% tax on gasoline on top of current taxes (these will not be repealed). If you get sick, your visit to the doctor is subject to this 30-34% tax. If you buy a new house, you will pay a 30-34% tax on the purchase price. Everyone with a mortgage, credit card, or car loan will pay a 30-34% tax on all interest. How many low- to middle-income families can afford this?

"They assume spending will remain at current levels," Russ Gollnick said. "The fact is, a 30% jump in price will affect spending. I'm concerned the impact it will have on our economy--it will cause a severe recession, even a depression."

Ah, but the "Fair Tax" proponents say salaries will go up--because they calculate their numbers by assuming salaries will go up when businesses are freed from paying social security taxes and revenue taxes. Have they learned nothing from Enron? Businesses today do not pass along increased revenue to their employees by increasing salaries! That just doesn't happen. As a former human resources director I can tell you that corporate management hires employees at the lowest salaries they can to keep costs down and profits up. Supply and demand controls salaries as much as consumer prices.

So as Sir Francis Bacon declared, "Knowledge is power." Question the assumptions of the "Fair Tax" and empower yourself. I invite your comments.