Contract with America 2006

Our new Leaders and our party has to stop tinkering around the edges on the major issues.

As Republicans meet this weekend to discuss the 2006 Agenda and the upcoming election cycle, we need a plan that we can all stand behind and reform the major issues before us.

I propose a new "Contract with America 2006"

A contract that covers Four main issues that American Families are concerned about.

By being a "Party of IDEAS" We propose 3 possible solutions for each issue.

This Frames the Debate and we seek input form the public.

The Theme is:

"America Debates and America Makes a Decision" or "America Decides and Congress Acts !"

By proposing 3 solutions we create a "Big Tent" for all Republicans and a "shut out" for Democrats who are void of solutions anyway.

The Four Major issues and Solutions for the Republican Party to lead on and discuss in 2006 are:

A. Tax Reform
Major changes are needed to protect the future for our Children and grandchildren.
The answer boils down to three possible solutions:

1. Fair Tax- HR 25
2. Forbes Flat Tax
3. President's Tax Panel Report

"American Families must make a decision and Congress must Act."

B. Border Security Enforcement and Protection

1. Guest Worker
2. Federal Crime status w/Employer Enforcement
3. Border Fence or National Guard patrols the Border

"A decision must be made and Congress must Act."


C. Social Security and Medicare Entitlement Reform

Major changes are needed to protect the future of these entitlements for our Children and grandchildren and avoid Bankruptcy. The honest answers boil down to three possible solutions:

1. Raise the payroll tax - possibly double
2. Means Test
3.Tier 2 Solution and the Fair Tax. A new system for a new generation.

"A decision must be made and Congress must Act."

D. Congressional Reforms

Hopefully all 3 should pass.

1. Lobby Reform
2. Earmark Reform
3. Budget Process reform

"A decision must be made and Congress must Act."

This is a win-win for 2006 because most Americans will accept one or more of the three solutions and see Republicans are the ones proposing it while Democrats will continue to demagogue and oppose but never propose solutions.

Some of the options are not supported by a majority of Americans or Republicans but that helps frame the debate and disarms the Democrats.

Republicans should present this "Contract with America 2006" as these are the hard "HONEST" choices we as Americans must decide on. The HONEST Choices boil down to these three in each issue.

I prefer this solution ___ "what do you prefer" What would you do to leave a better America for your Children and Grand Children? Do Democrats have a Solution with a majority of American Family support or is the Democratic solution tied only to their limited Special interest friends.?

Or like many Democrats will you leave the Status Quo in place, offer no solutions and leave these unsustainable programs for our children to bare the burden of.

Republicans believe it is time to decide and we are here to lead and will Act on what the American public decides on these important issues.

Contract with America 2006America Decides;

Congress Acts & America's Future gets Fixed.

Fair Tax Benefits All Americans

The Fair Tax Legislative package HR25/S25 is in full Legislative form and waiting in the Halls of Congress with 47 Co-Sponsors signed on and a total of 155 Legislators leaning in support according to the FairTax Scorecard. Many Legislators were waiting for the President's Tax Panel report before committing to any tax reform plan. For many in Congress the Tax panel's Report received a failing grade as it did not meet the goals set down by the President. The President's goal was to "simplify the tax code in a way that is fair, does not raise or lower the overall tax burden and better promotes "long-run economic growth and job creation."

The Tax Panel Report tinkered with the edges and eliminated Home Mortgage deductions but did not take the broad approach as the President laid out. Congressman are now free to support a real reform plan.

The Fair Tax meets those goals set by the President and much more according to supporters.

From Fair Tax Thumbnail :

The FairTax proposal is a comprehensive plan to replace federal income and payroll taxes, including personal, gift, estate, capital gains, alternative minimum, Social Security/Medicare, self-employment, and corporate taxes. The FairTax proposal integrates such features as a progressive national retail sales tax, dollar-for-dollar revenue replacement, and a rebate to ensure that no American pays such federal taxes up to the poverty level. Included in the FairTax plan is the repeal of the 16th Amendment to the Constitution. The FairTax allows Americans to keep 100 percent of their paychecks (minus any state income taxes), ends corporate taxes and compliance costs hidden in the retail cost of goods and services, and fully funds the federal government while fulfilling the promise of Social Security and Medicare.

The Fair Tax Legislative package is based on the work of Americans For Fair Taxation (AFFT) they have spent almost 10 years in developing and researching an alternative to our archaic income and payroll tax system. Americans For Fair Taxation (FairTax.org) is a non-profit, non-partisan, grassroots organization dedicated to replacing the current tax systems. The organization has hundreds of thousands of members and volunteers nationwide. Its strategy supports sound economic research, education of citizens and community leaders, and grassroots mobilization efforts.

www.fairtax.org

Many other organizations support the Fair Tax Legislation or similar Consumption tax as well, including the National Taxpayers Union (NTU), Citizens against Government Waste, American Farm Bureau Federation, 60 Plus Association, National Small Business United, Associated General Contractors, Association of American Physicians and Surgeons, and many more.

Alan Greenspan and 75 other Economists have stated publicly that they support replacing our income tax system with a Consumption tax. Alan Greenspan said before the President's Tax Panel that a 6 month transition would be preferred so that the economy and business could adjust to a new system.

The fairtax.org web site covers many of the details and provides a long list of over 40 FAQs which quickly answer most questions people have when they first hear of this Legislative package for tax replacement. The Web site also have detailed research papers and Rebuttals to the few economic critics who often misquote what the Fair Tax is and misrepresent the specific features of the Legislation.

Its Time to Bury the Old Code and Bring in the New.

Some of the benefits of the Fair Tax have been boiled down to a top ten list of Economic benefits with links to articles which explain in more detail the background and the research.

Top Ten Economic Benefits of the Fair Tax Legislative Package HR25/S25

1. Supported by Alan Greenspan and 75 other Economists and Economic Professors. They all support a consumption tax as better for America than an income tax.

2. Removes the most regressive tax on the poor and middle class- the payroll tax. Provides a broader based tax for Social Security and Medicare. The Fair Tax also replaces the personal and business income tax, AMT(Alternative Minimum Tax), death tax, capital gains tax and investment taxes.

3. Removes business income and payroll taxes resulting in a drop in prices by 10 to 15%. Saves an estimated $250 to $400 Billion annually in unproductive tax compliance costs.

4. Eliminates the cumbersome IRS Tax code and replaces it with a National Sales tax of 30%(income tax equivalent of 23%). With price drop consumers pay about the same. Under the arcahic Income and payroll tax a middle class family had to earn a gross pay of $148 to bring $100 Home. Under the Fair Tax you bring $148 dollars home and with a minimum 10% price drop that same $100 of Goods costs you $90. Add the Sales Tax your new total is $117. You net $31 extra.

5. Fights outsourcing; increases Manufacturing and business growth back in America. Boosts Economic Growth an estimated 6 to 10% in the first year. Increased job growth.

6. Reduces the trade deficit because exports will not pay the sales tax and be 10 to 15% cheaper for sale overseas. Leveling playing field with low wage countries. (Unions should support)

7. US shores will be the most competitive corporate tax -free zone not the Bahamas. Corporate headquarters and many other businesses can return to US soil and be more competitive. Investment capital will flow and American Based business and jobs will grow.

8. Average working families take home 100% of their paychecks, no Federal income tax or payroll deductions. Average family of 4 making $50,000/yr takes home $5,000 more.

9. Families have more Spendable income for Health Insurance, Childcare, College tuition, and Private retirement Savings accounts. It’s their choice for their family. “Ownership”

10. Fair Tax package is revenue neutral and Progressive with a Prebate of Sales tax up to the Poverty line of spending. Family of 4 gets $492/m. Couple receives $367/m. No receipts no complicated filing for refunds. A refillable monthly debit card to cover Sales tax on all purchases up to the poverty line of Spending - Family of 4 HHS sets in 2005 at $25,660- Prebate is $492/m

The Fair Tax is revenue neutral, progressive and fair. Net tax rate for the Poor at the poverty line is 0%, for the middle class at twice the poverty line is 11.5%; for 4 times poverty line 17.2% and the more you spend your net rate is between 20 and 23%.

The Fair Tax meets requirements set by President Bush when he said, "simplify" the tax code in a way that is fair, does not raise or lower the overall tax burden and better promotes "long-run economic growth and job creation." It also meets his standard for promoting Home ownership and Charities.

Get the facts at http://www.fairtaxvolunteer.org/smart/faq.html

Family Friendly Tax Reform – www.fairtax.org

Time to sweep out the old code and bring in a fairer and simpler system forAmerican Families, American Workers and the American Economy.

Tax Reform with far less pain and much more gain in One Legislative package HR25/S25.

Top Ten Economic Benefits of the Fair Tax

Fair Tax Legislative Package -HR 25/S25

1. Supported by Alan Greenspan and 75 other Economists and Economic Professors. They all support a consumption tax as better for America than an income tax.

2. Removes the most regressive tax on the poor and middle class- the payroll tax. Provides a broader based tax for Social Security and Medicare. The Fair Tax also replaces the personal and business income tax, AMT(Alternative Minimum Tax), death tax, capital gains tax and investment taxes.

3. Removes business income and payroll taxes resulting in a drop in prices by 10 to 15%. Saves an estimated $250 to $400 Billion annually in unproductive tax compliance costs.

4. Eliminates the cumbersome IRS Tax code and replaces it with a National Sales tax of 30%(income tax equivalent of 23%). With price drop consumers pay about the same. Under the arcahic Income and payroll tax a middle class family had to earn a gross pay of $148 to bring $100 Home. Under the Fair Tax you bring $148 dollars home and with a minimum 10% price drop that same $100 of Goods costs you $90. Add the Sales Tax your new total is $117. You net $31 extra.

5. Fights outsourcing; increases Manufacturing and business growth back in America. Boosts Economic Growth an estimated 6 to 10% in the first year. Increased job growth.

6. Reduces the trade deficit because exports will not pay the sales tax and be 10 to 15% cheaper for sale overseas. Leveling playing field with low wage countries. (Unions should support)

7. US shores will be the most competitive corporate tax -free zone not the Bahamas. Corporate headquarters and many other businesses can return to US soil and be more competitive. Investment capital will flow and American Based business and jobs will grow.

8. Average working families take home 100% of their paychecks, no Federal income tax or payroll deductions. Average family of 4 making $50,000/yr takes home $5,000 to $7500 more.

9. Families have more Spendable income for Health Insurance, Childcare, College tuition, and Private retirement Savings accounts. It’s their choice for their family. “Ownership”

10. Fair Tax package is revenue neutral and Progressive with a Prebate of Sales tax up to the Poverty line of spending. Family of 4 gets $492/m. Couple receives $367/m. No receipts no complicated filing for refunds. A refillable monthly debit card to cover Sales tax on all purchases up to the poverty line of Spending - Family of 4 HHS sets in 2005 at $25,660- Prebate is $492/m

The Fair Tax is revenue neutral, progressive and fair. Net tax rate for the Poor at the poverty line is 0%, for the middle class at twice the poverty line is 11.5%; for 4 times poverty line 17.2% and the more you spend your net rate is between 20 and 23%.

The Fair Tax meets requirements set by President Bush when he said, "simplify" the tax code in a way that is fair, does not raise or lower the overall tax burden and better promotes "long-run economic growth and job creation." It also meets his standard for promoting Home ownership and Charities.

Get the facts at http://www.fairtaxvolunteer.org/smart/faq.html

Family Friendly Tax Reform – www.fairtax.org

Time to sweep out the old code and bring in a fairer and simpler system forAmerican Families, American Workers and the American Economy.

Tax Reform with far less pain and much more gain in One Legislative package HR25/S25.

Mr. President, My Wish for 2006; Make America Decide !

As Americans we say good-bye to 2005 and look to the future in 2006, we know the President will continue to lead boldly on all fronts of the War on Terror but my wish for 2006 is to focus on the Country’s Domestic Agenda.

Where America Debates but America also makes a Decision.
On Tax Reform ( Fair Tax, Flat Tax, or Tax Panel Report); On Border Security ( Guest Worker, Federal Crime status, Border Fence, Employer Enforcement ); On Social Security and Medicare Entitlement( Raise the payroll tax, Means Test, Tier 2 Solution and the Fair Tax)

The President will be preparing his 2006 State of the Union Address in which the following items should be debated and decided in 2006 to insure a better and brighter future for all Americans – Republican and Democrats. (Of Course it would be a lot easier to actually accomplish something if “Chicken-Little” Democrats weren’t spending all their energy saying, “the sky is falling” on every issue.)

Dear President George Bush, January 1st 2006

Topic: 2006 Domestic Agenda and the State of the Union Address
Possible title or theme for Speech: Let’s Debate but America must decide!

Set the Stage, Frame the Debate, Propose Solutions with choices for the American People and Congress to pick from not just One plan for “Chicken Little” Democrats to pick apart. Congress must produce legislation and Democrats must stop obstructing

Mr. President, the American people want clear choices not fuzzy general plans. Yes, you have laid the groundwork for Social Security Reform and Tax Reform, but you have not laid down clear choices. In the Social Security debate, you waited and waited on defining the plan and others defined it for you. Later, you lobbied around the country for 2 months on private accounts but you waited to long to do it. You were always playing catch up and never seemed to be in the lead.

Similarly, on Tax Reform, you proposed it in your 2005 State of the Union, and put a decision off to a Presidential Panel that delayed and delayed its scheduled report. When they did submit it, the country gave them a Grade of D to F. The report did not meet the criteria you set out at all. In 2005 State of the Union, You asked for a change or replacement of our archaic income tax code that would promote economic growth with a tax reform plan that is “ Fair To All “. The Panel’s report did not even come close.

The Challenge for 2006 is to be bold and specific but also give choices. A “Good, Better, Best” approach to each issue. Let the American people decide.
The “Good” Choice” may be a poorer choice but frame the debate as the Country has three choices and it is time to decide not put these off to future generations.
No more fiddling with our future: It is time to make the hard choices.

The President should use the bully pulpit to push for the “Best” Choice but present all 3 variations; clearly state that the status quo is not acceptable and that he will veto any Legislation that only tinkers around the edges of the problem as Congress traditionally does. These programs must change and Congress must act.

The President states his preference but demands the three choices be debated and voted on by Congress (Framing the debate). He also can and should state some ground rules to work within. This will not turn in to class warfare and the President will not support legislation on any of these issues that is based on a myth that taxes have to be raised on one family more than another in percentage terms. These are problems that all American families must share in and all must contribute to their solution fairly. Honest numbers must be used in the debate of these issues.

If Democrats can’t propose and can only oppose than force them to choose between the three choices on each issue. A vast majority of American support will fall within one of the three choices made by the President. Americans will see that Democrats will oppose all of them. The President wins because he has proposed defined choices that a majority of Americans support. Democrats lose because they play the “status quo” line, “class warfare” line, or the “Chicken Little” the Sky is falling” line.

Every proposal should have 3 choices for the American Families to consider and the President should lead by stating strongly that Congress must Act now. Americans understand and support the idea of “pay me now (little pain) or pay me (a lot more) later”. The later is a vast and overwhelming burden on our children and Grandchildren.

My Three Domestic Wishes for 2006 are Issues that will overwhelm and burden our Children and Grandchildren unless we act.

1. Tax Reform with Strong Economic Growth, Simplicity, and American Job Growth .

2. Border Security and Illegal Immigration Reform.

3. Social Security and Medicare Entitlement Reform.


Tax Reform has 3 possible choices that the President should outline and explain. Let the American people decide, not lobbyists and special interests but American voters and families. The Status Quo of an archaic income and payroll tax system is not consistent with the global economy in the 21st Century. Congress must act in order to insure a bright economic future for our Children and Grandchildren. Otherwise the current tax system will continue to support outsourcing, job loss, American manufacturing loss and economic inefficiency as billions is wasted on compliance with our archaic tax code.

Choice #1 - Accept and adopt the Presidential Tax Panel report, which includes changes in rates and elimination or restrictions of Home Mortgage Deductions and Local State Tax deductions. This is closer to a tinkering than a substantial change but the Panel must be given a spot at the tax reform table in 2006. The President should point out that many have given the panel a poor grade but that he thanks them for their contribution and leaves it to the American people to consider.

Choice #2 - Flat Rate Income Tax: The most well known is that outlined by Steve Forbes or Dick Armey. It is a plan that simplifies the income tax code and provides a substantial exemption up to $40,000 in income. Unfortunately, it leaves in place the most regressive tax on the working poor; the 7.65% payroll tax that comes from each working families paycheck and the additional 7.65% payroll tax paid by each of their employers which suppresses wage growth. A family of 4 making $25,000 pays no income tax(after refund and EIC) but does pay the payroll tax. With the 17% flat income tax plus the 7.65%, American middle class families have a total inclusive income tax burden of 23.65% under the Flat Tax. There would be no Mortgage interest deduction or local property tax deductions to offset the Flat Income tax only the $40,000 exemption and fill out a post card.

This is a revenue neutral proposal and has merit but does it go far enough to create jobs, improve exports, and grow our economy so that we can afford the programs of the future that we want our children and Grandchildren to inherit from this generation? American Families must choose and Congress must Act.

Choice #3 - The Fair Tax Legislative Package – HR 25/S25.
This plan has the most Congressional Co-sponsors to date. It is the most complete Legislative tax reform package currently on the Hill. Sponsored by Congressman John Linder in the House and Senator Saxby Chambliss in the Senate. It deserves serious study by the American people. The Fair Tax has been well researched over the last 10 years and is supported by many tax payer groups and other organizations. Congress and the President received an open letter by 75 Economists and Economic Professors last spring in support of the Fair Tax. See Article at: http://fairtaxreform.blogspot.com/2005/04/geter-done-economists-nationwide.html

The Fair Tax answers the President’s call for simplicity, promotion of ownership by having more take home pay, fairness, Growth in good paying American jobs, Economic growth on American Soil. In addition, the Fair Tax provides a broader tax base that supports future concerns in Social Security and Medicare. The Fair Tax eliminates the payroll tax and truly untaxes the working poor. The Tax inclusive rate of 23% is less than the total of the Steve Forbes Flat Tax combined with the payroll tax. The Fair Tax sends a rebate to every family of 4, $479 / month to pay the National Sales Tax on all purchases up to the poverty line. American families take home 100% of their paychecks.

See Articles:
Give Every American Family a Raise
http://fairtaxreform.blogspot.com/2005/02/give-every-american-family-raise.html

Fair Tax Solution for American Manufacturing and American Jobs
http://fairtaxreform.blogspot.com/2005/12/fair-tax-solution-for-american.html#comments

Top Ten Economic Benefits of the Fair Tax
http://fairtaxreform.blogspot.com/2005/02/fair-tax-top-ten-economic-benefits.html#links

In Tax Reform there is a lot to consider but these are the 3 choices the President should talk about with emphasis on the best choice – The Fair Tax. The Status quo of an archaic Income tax and payroll tax with Billions wasted in Economic dollars just to comply with the Tax code must end. The American people must decide and the Congress must Act.


Border Security and Illegal Immigration. The President cannot be lukewarm on this anymore. No matter what big agribusiness and other contributors want. He must be bold and he must give choices and ask the Congress to act.

Choice #1 – 1000 more Border patrol agents and a Guest worker Program.
The President has this on the table and the response from many is “ It is not enough”
Again, put it out there and let the American people not the lobbyists for business or the Mexican government paid lobbyists influence Congress anymore. Is this Good Enough?

Choice #2 - Recent House Bill passes will President and Senate Support?
Recent Bill that cleared the house does several things;
Adding 698 miles of fence to our Border with Mexico;
Make illegal immigration a federal crime and those that support illegal immigration would be accessories to that federal crime. This includes employers.

Choice #3 – Stiffen Penalties at all levels.
Create strong deterrents to this crime by not only making illegal entry a federal crime but with a strong minimum sentence of 5 years. Don’t fine employers but put them in jail. One South Carolinian State Senator proposes this and added the fact that large farmers are treating these illegal aliens like it was the old plantation days. The South argued that if they lost their cheap labor their economy would collapse. It is time farmers and other employers gave up their support of illegal immigration and the unfair wage many pay. The prison term will be the deterrent but put the illegals on work farms to pick the vegetables but charge the farmers an appropriate wage to pay for the cost of housing, feeding and deporting them.


Social Security and Medicare Entitlement Reform;

The President needs to take a new approach and take his original version of private accounts off the table so as to address long term funding of Social Security and Medicare together. Solvency Choices for both.

First, reset the stage, this is a problem that cannot be put off to the next generation. Both Social Security and Medicare Entitlement spending will swallow the national budget whole, if we do not act sooner than later. The American people and Congress must study this issue and Act on it to safeguard these programs for future generations.

But first there is one additional point we must all start with and it is time that we be honest with the American people about. Social Security is really a pay as you go system by the taxpayers of America. There is not a separate account where your payroll taxes were put and interest was earned. It is not a savings account. Those working today today pay retiree benefits. Social Security and Medicare need to be reformed to be solvent for future generations. If we only tinker, than these programs will swallow up our children and our grandchildren. The American people and Congress need to act and not pass this off again. It is time to make a Choice!

Choice #1 - Means Test Social Security and Medicare Benefits.

The original goal of Social Security was to keep Seniors out of poverty. The Goal was not to give those with already generous pensions additional monthly income to play golf.

Payroll taxes are taxes not a savings plan. The revenue is spent each year like any other tax. Lets send these benefits to those who truly need it. Those that can afford their own Health Insurance and have investments or pensions that give them an upper middle class retirement do not need full Social Security or Medicare benefits.

This is one choice but a choice should be made. Democrats often say, “Taxi the rich more”. This is a class warfare argument that backfires because the rich are taking their money legally offshore and they proportionally pay more than their fair share now.


Choice #2 - Raise Payroll taxes now and place it in an Investment Lock box.

To Keep Social Security and Medicare Solvent( without reducing benefits) you must start raising payroll taxes gradually to meet the needs of the Baby Boomers. We have 3 workers for every retiree now and will soon go to 2 workers. Raise the payroll tax over the next 5 years from 7.65% to 10% on all wage income and invest it in a portfolio of Blue chip stocks and Bonds.

This takes the surplus money from these programs away from Congress to use or to hide the true nature of their deficit spending. Put all Social Security and Medicare excess revenue into an investment Lock box of high quality conservative investments and don’t let Congress touch it. This could grow to support future deficits in these programs.

Choice #3 - Tier 2 Solution for Social Security and Medicare.
Provide a broader tax base for these programs that will grow to meet the needs with a faster growing economy. Combine Tax reform Choice #3 – The Fair Tax Legislation with the Tier 2 Solution for Social Security.

A National Sales Tax under the Fair Tax plan provides for a broader consumption tax base to support Social Security and Medicare. The wealthy do not support these programs with their investment income, stock dividends, capital Gains or inheritances. Under the Fair Tax a fixed portion of the sale tax goes to each of these programs.
Instead of these programs being supported by 2 workers per retiree, America will have the Personal consumption of all Americans supporting these important programs for Seniors.

The Tier 2 Solution for Social Security follows the retirement reform of States like New York who long ago new their overly generous programs were unsustainable. New York developed Tiered Retirement systems. Options for Tier one were greater than for Tier Two who were hired at a later date. Tier 2 solution is similar.

Read Article: New deal for a New Century – Fair Tax plus the Tier 2 Solution.
http://fairtaxreform.blogspot.com/2005/05/new-deal-for-new-century-fair-tax-plus.html

Tier 2 Solution Summary:

1. Start the Tier 2 system with those people currently 30 years old or younger. Americans born in 1975 or later would be the Tier 2 Generation.

2. Grandfather all other retirees under the old system if born before 1975.

3. Redesign the system to match the realities of the new century and the global economy.

4. Using the Fair Tax as a catalyst set up a new 3 legged stool to retirement security. Three separate accounts;

5. Account #1- Social Security Safety Net - Provide a standard fixed amount safety net for all Tier 2 Seniors set at the poverty level for an individual. HHS poverty line in 2004 for an individual is $9310/ yr or $776/m. Maid or Millionaire every one born after 1975 receives the same $776/m.

6. Account #2 Social Security and Savings Plan - For Tier 2 Generation establish a Thrift Savings Plan/Pension style account with matching funds from Uncle Sam. For every dollar theTier 2 Generation saves in this account the Federal government will provide a 50% match up to $1,000 per year. Save $2000 in your Pension savings and Social Security matches with a
maximum of $1,000. Similar to 401(k) programs, portable and worker owns it.

7. Account #3 – Universal Savings Account – Under the Fair Tax plan, American families take home 100% of their paychecks. An average American family will take home an extra $5,000 to $7500 more in spendable income above paying for the Fair Tax. This money can be saved and provide the vehicle for true “Ownership”. The Fair Tax provides the increased take home pay for a family to save for retirement and participate in Account #2 as well as extra take home pay for Health Care, Child Care, College Tuition, Down Payment on a Home and other Family needs. They own the account with no tax gimmicks and they decide what is best for them.

8. Economic Growth estimated 6 to 10 % with the Fair Tax. This helps the Social Security and Medicare to have increased revenue to support the needs of all future retirees.

The President must Lead boldly but not give America one choice but 3 on these issues. Let them decide which is the best but lead them to action on these issues; not tinkering and putting it off to future generations.

Lead us to Action Mr. President.
Choices must be made for a brighter America.

Merrill Bender

Fair Tax Solution for American Manufacturing and American Jobs

One of General Motors key parts suppliers, Delphi Corporation, filed for bankruptcy on October 8th and has sought wage concessions from its Unions to lower the average wage from $27/hour to as low as $12/hour. Wage pressure comes primarily from the low almost slave like wages paid in foreign countries to their workers and from those foreign countries being able to export their cheap goods to the U.S. This high cost of wage argument has been a consistent problem and call by American Manufacturers that are trying to compete in a global marketplace as well as compete within the American Marketplace.

CNN's Lou Dobbs almost competes with Bill O'Reilly in his level of indignation and outrage on how American Manufacturing Jobs are leaving American Shores. However, they and many other Americans misunderstand and dismiss the serious grassroots support and supporting research for a solution that will truly help the "little guy" and restore good paying American Jobs. (The Fair Tax HR 25/ S25. www.fairtax.org)

The Solution For Delphi and for American Manufacturing in General is not trade barriers or tariffs but is fair trade. But how do you get Fair Trade when competing countries do not pay a Fair Wage? American Workers do not need to compete globally by lowering their wages to such Draconian levels.

American Manufacturing goes where it costs them the least to do business. Even with the higher costs of fuel to ship those goods from overseas the low wage is what helps some countries compete and it is the Lower business taxes that helps other countries compete. In Europe, Ireland has had the strongest economic growth and best employment numbers because they have the lowest taxes on business(Corporate tax 12%)

The Solution for America is Lower Taxes on American Manufacturing not Lower Wages on American Workers. The incentive for business to stay in America and not outsource is lower taxes on Corporate earnings with less tax compliance costs. Ultimately, It is the consumer that pays the business tax in the end on all products and services. Business taxes like business costs for manufacturing are just worked into the price. The Consumer pays the tax not the business.

What if the United States had the lowest Corporate tax in the World. Would not business flock here to manufacture? What if instead of the Bahamas being the Offshore tax haven for business or Corporate headquarters that for Tax purposes those businesses made New York, or California, or Chicago their Corporate home and their preferred place to manufacture from and ship around the World?

There is such a tax plan in Congress waiting in the wings to rev up our Economy, by providing the right incentive for American Manufacturing to stay in America, for Good paying manufacturing jobs not to be outsourced, for American Families to have more take home pay, to make U.S. Soil a Tax free zone for business that can export around the world Tax-Free. This is how we save American jobs and this is how we compete against substandard wages in a global economy.

The Legislative Package in Congress has been around for several years, it is well researched and has sound economic data to back it up. It is commonly called the FairTax and has over 45 Co-Sponsors in the House and Senate. The bills are HR25 and S25. Congressman John Linder is the lead Sponsor. Congressman Linder and Talk Show Host Neal Boortz have written an informative and sometimes humorous New York Times Best Selling Book called "The Fair Tax Book - Saying Goodbye to the Income tax and the IRS" A great thumbnail overview can be found at : http://www.fairtaxvolunteer.org/smart/sketch.html or visit FAQ section at www.fairtax.org

From an American worker stand point the key point is that the Fair Tax helps save American jobs and promotes American Manufacturing that stays on U.S. Soil. It allows American workers to take home an average 30% larger paycheck each and every week by eliminating any federal withholding for income tax or payroll tax from an American workers paycheck. American workers take home 100% of their paycheck !!

American Manufacturers have the incentive to stay in the US and not outsource because they pay no Corporate tax. New American Manufacturing is created because Capital investment in the US is tax free. Building new plants in the US will cost them less because of lower taxes. The Exports they send overseas pay no tax and are cheaper for sale in the global marketplace. This allows American Manufacturing to compete globally because of lower taxes not lower wages like Delphi is trying to accomplish.

The Fair Tax is a revenue neutral replacement of the individual and corporate Income tax; payroll tax, capital gains tax, the Alternative Minimum Tax (AMT) and the Death Tax(Estate Tax). It is replaced with a National Sales Tax on retail purchases of all new products and services. According to the Legislation, the national sales tax will be included in the price tag you see on a product and will be broken out as a separate line item on your receipt so that Americans know how much they are being taxed and how much they are sending to Uncle Sam with every purchase.

American Families do not have to wait until April 15th to get a refund of their own money, they will take home and average 25% more because of no Income tax withholding and an additional 7.65% because of no payroll tax withholding. Under the Fair Tax the tax collected replaces the income tax that funds the national budget and replaces the payroll taxes that fund Social Security and Medicare.

The Fair Tax can help to strengthen Social Security funding because the sales tax is a much broader tax base than an income tax. In fact, the wealthy will do more to support Social Security under the Fair Tax. Under current Income tax and payroll tax rules the wealthy stop paying into SSI after $90,000 in income. So all the big executives and managers that make more than $90,000 stop putting in to support Social Security. Under the Fair Tax when they buy a $200,000 yacht than some of the Fair Tax goes into SSI. When they throw lavish parties and spend more than most of us would spend in one year on food, the wealthy are supporting the budget and SSI with every purchase with no loopholes or tax breaks for their lawyers to hide their money behind. The wealthy that have millions in investment income were never supporting SSI, now they will every time they spend it on the expensive things they buy. The Fair Tax is fair because it is a flat rate consumption tax. The more you spend the more you pay in tax.

The Fair Tax Legislative package is much more That just a national Sales Tax it is a package that also has a Prebate(rebate) system that truly untaxes the poor and treats everyone equally and fairly. No forms to keep no receipts to log in or file. Everyone gets the same prebate check based on family size and valid Social Security cards for each family member.

Maid or Millionaire: the simple way to be sure no one pays a national sales tax on the essentials is not complicated exemptions but to simply send each household a monthly check to cover the national sales tax on all spending up to the povertyline for that Family size.

Health and Human Services calculates the poverty line for a married couple with 2 children at $25,660 for the year 2005. The Fair Tax assumes every family of 4 will spend at least that much and sends them a prebate to cover the national sales tax on every dollar up to $25,660. The Inclusive tax rate is 23% or $5,902. The Fair Tax sends each month $492 (5902/12). If that family makes less than $25,660, they still receive the monthly check for $492. It is a fact, if you make more you spend more. Under the Fair Tax if you spend more you pay more.

With the Prebate, the Fair Tax is progressive in that the net tax rate for those American families at the poverty line is a true ZERO, for those at twice the poverty line the net rate is about 11.5%; at 4 times poverty that family is about 17.2% and the wealthy at 10 times the poverty line and higher average between a true 20 to 23% net federal tax rate.

This compares to a 10% income tax rate plus 7.65% payroll tax for the lowest paid American who is working full time and recieves the minimum wage. The Earned Income tax credit may offset the minimum wage workers income tax but not the payroll tax.

The Fair Tax truly untaxes the working poor by eliminating the payroll tax of 7.65% and allowing the working poor to take home 100% of their paycheck and receive an additional $5,902/ year to cover the National Sales tax on essentials like clothing, food, housing, or daycare.

The working poor who live at the poverty line of income have a true net federal tax rate of ZERO.
The Fair Tax lowers taxes on the working poor because the consumption tax base is larger than taxing income alone. The overall tax rate for all Americans is lower because of this larger tax base.

Trillions of Offshore dollars that the wealthy and wealthy Corporations hold offshore because of America's current tax laws will return to US shores under the Fair Tax. This capital will find a tax free zone in America and want to invest in American Manufacturing and business that will not only sell to Americans at home but to the entire world. American Exports will not have the 23% national sales tax on them for export. These exportable products will also drop in price because we have removed a major cost element form the supply chain. With no business income or payroll taxes, the cost of those products will go down. With no IRS you reduce the compliance costs dramatically for complying with the IRS rules and regulations. This savings throughout the supply chain will also be reflected in a lower price at home and for export.

It depends on the economist and it depends on the economic model but the estimated price drop on products and services is between 10 and 25% on average. Something you bought for $100 under the income tax will drop to somewhere between $75 and $90 dollars. When you add in the National Sales Tax the final price will be between $97.50 and $117.00.

Under the Income tax to take home $100 you had to earn about $148 if you had a 25% income tax withholding and a 7.65% payroll tax withholding. At a 15% Income tax withholding you had to earn about $129 to take home $100 and buy groceries or put Gas in your car.

Under the Fair Tax you take home more money and you have more money to spend. You take home $148 and spend $117 with the Fair Tax to buy the same $100 worth of goods you bought with $100 in take home pay under the archaic Income and payroll tax system.

Under the Fair Tax Legislative package you lower taxes on business; you give them the incentive to produce and manufacture here within the US and not in China or India , or Mexico. The way to compete in the 21st Century is not to cut our wages in half the way to compete in the world is to provide the incentive for business to do business inside the US. The Fair Tax Legislative package does so much in so many ways. Our American Economy will boom when American manufacturing is growing in the US. The Fair Tax is the best vehicle to do that.

When the Lobbyists and their paid economists come out against it beware. With out the convoluted tax code, Lobbyists, Congressmen, congressional aides and "K" Street will lose a lot of their power and influence.
If they come out against it than it must be good for average American families.

Every Politician that came out in support of this idea last election cycle won. This is a winning issue for politicians and when the average American working people are presented all the facts of the Fair Tax 80 to 90% love it. Get the Facts. www.fairtax.org

If Average American workers can get people like Lou Dobb's and Bill O'Reilly to truly study all the facts that support the Fair Tax perhaps we can get them to join the over 75 economists that wrote a letter to Congress last Spring in support of the idea.

The Fair Tax is the most comprehensive solution to aid American Workers, American Families, American Manufacturing and the American Economy. www.fairtax.org

Wealthy Democrats don't pay their Fair Share of Tax.

Is our current system of taxation a Fair Tax on American Families? Democrats would have you believe that they want to tax the rich more and protect the Middle Class. Not True ! Democrats like the current system because their wealthy friends like the system, their wealthy Lobbyists help create the system over 40 plus years of Democratic control of the House.

Democrats impune the attempts of Republicans to simplify the tax code, lower tax rates and close loopholes. Democrats scream on one hand about the wealthy but they don't pay their fair share of tax at all. Tehresa Heinz Kerry and her Husband( John Kerry) paid a net 12% on their tax returns shared during the last Presidential race.
Millions in investment income and wages and they pay only 12%. On investment income they paid ZERO toward supporting Social Security and Medicare. Why? There is no payroll tax on investment income.

Democrats like to respond that they will pay when they pay the estate tax and that is why we should keep the estate tax. But wealthy Democrats who say that( like Senators Kerry and Kennedy) use other loopholes to avoid that as well.

Al Ose, Regional Director for Americans for Fair Taxation, wrote a recent letter pointing out the Hypocrisy of the left.

Letter to the Editor.

You have my permission to publish this letter.



The enemies of the FairTax are the ultra-wealthy, those whose jobs depend on the current tax system, the National Retail Federation (NRF), and the uninformed.

One of the taxes eliminated by the FairTax is the estate tax. Warren Buffet, Bill Gates' father, Sen. Ted Kennedy, and George Soros have all requested that we keep the estate tax. If you look at their publicized financial records you will find that their money is protected from the IRS through trusts or foundations. For example Sen. Kennedy has $500 million in trusts based in Jamaica, Cayman Islands, and the bulk of it in Fiji. The Kennedy oil company operating in five states, once called Kenn Oil, is now named The Arctic Oil Royalty Trust. George Soros "holds the bulk of his billions in tax-free overseas accounts."

The ultra-wealthy pay lobbyists six-figure incomes to offer campaign contributions to legislators. The legislators in return make changes to our tax code that benefits the wealthy. The legislators use the contributions to get re-elected. If a legislator is against tax reform you should be able to figure out why.

The NRF doesn't want to collect the FairTax although they already collect a sales tax in 45 states and the District of Columbia. The FairTax would require only 16 million retailers to collect and remit the FairTax. Our current system makes them and every other business and individual to maintain records and report to the IRS. That is over 200 million reports to the IRS as opposed to just 16 million retailers reporting to their states with the FairTax.

Of those who become educated about the FairTax, 85 percent approve.

Privacy is one of the major benefits of the FairTax. The government and your accountant would no longer know more about you than your children do. Visit www.fairtax.org.

Best regards, Al Ose

Regional Director WI, IA (volunteer)

Americans for Fair Taxation
Resources:

Newsmax magazine, November 2005.

Do As I Say (Not As I Do) : Profiles in Liberal Hypocrisy by Peter Schweizer

The Fair Tax eliminates the Estate tax, AMT, Capital Gains tax, investment income tax and all payroll and income taxes. The Fair Tax replaces that with a new revenue neutral tax system that has a simple National Sales Tax for all new products and services plus a very important Prebate system to make the whole package progressive as well.

Under the Fair Tax the Ultra Wealthy will pay their fair share. When the wealthy buy big houses and new cars, fancy landscaping, in-ground pools and spas, and Yachts, they will pay the Fair Tax. Unlike the estate tax or the capital gains or investment income tax, the Fair Tax has a portion which goes to Social Security and Medicare. Now the Wealthy will pay a fairer share of supporting Social Security and Medicare. The rest of us will take home 100% of our paychecks and have more spendable income under the Fair Tax. The Fair Tax expands the tax base, provides a monthly prebate check and gives American Families more control over all they earn.

If the Democrats are truly the protectors of the poor and of Social Security why do they continue to support the most regressive tax on the working poor and middle class. The Payroll tax for Social Security is only paid on wage income up to $90,000. Most Senators and wealthy Democrats like the Kennedys, Kerrys, Soros family and Hollywood celebrities stop supporting these crucial programs after $90,000.

It is time to change the tax system to the Fair Tax; This is Tax Reform that truly untaxes the poor and removes the most regressive tax from the Middle Class and makes the Wealthy pay a fairer share without the loopholes that their tax attorneys use to take money offshore, put in tax free trusts or use fancy writeoffs to pay a smaller percentage than working families do.

For more info visit; http://www.fairtaxvolunteer.org/smart/sketch.html

Set the Stage and lead Mr. President

Mr. President you tried to set the stage on tax reform with your last State of the Union and the Tax panel you set up.
Unfortunately, that panel "Failed" at their task and like Donald Trump you should say "They're Fired!"

In your 2006 State of the Union - frame the tax reform debate further. Tell the American People you are narrowing the focus to 3 possibilities for reform. And that you want the American people to truly consider if they want a status quo tax system that is full of lobbyist loopholes or do you want something better for American Families; American Workers and better for the American economy.

Say in your 2006 State of the Union that

" in the area of major tax reform, some good work has been done but it is time for the American people and its elected officials to take a much more serious look at America's economic future and success.

I beleive there are 3 possible areas of tax reform that would be best for American Families, American Business and the American Economy. The Old IRS Code is like a tired old car; Our American Economy needs to trade it in for a new tax code that gets better gas mileage and costs less in repairs. Only the mechanics(lobbyists and Congress) are getting wealthy on this old tax code.

Of the three possible Solutions for a newer tax code.
One is O.K.; the second is better and the third may be best."

Mr. President, tell the American People that

" the Tax panel laid a good first step(cough, cough) but it does not answer all I asked for.

The Second choice may be a true flat tax but that still leaves a very regressive Payroll tax on the Middle Class and does not do enough for us to fight outsourcing, encourage job growth, encourage economic growth or promote an Ownership Society.

Alan Greenspan and over 75 Economists have spoken positively about a consumption tax. A few like the VAT and most like a Sales Tax as a better way to encourage our economy. A VAT has more problems than a National Sales tax and a VAT is a problematic system seen in Europe that I would rather not follow.

The third choice may be the best choice. We can make a National Sales tax system Progressive and positive for our American Economy and let American FAmilies take home 100% of their paychecks with no Federal withdrawals. We can widen the tax base for both the Federal Budget and Soical Security and Medicare.

2 of the top 20 Economies in the world operate on a Sales tax for over 95% of their operations and Government Expenses. Florida and Texas. Over 45 States already have Sales Tax systems that could adjust and work with a National Sales Tax. it is much easier to track and manage than an Income tax system.

A lot of good research has gone into a plan supported by many National Organizations; including the AFFT- Americans for Fair Taxation, NTU-National Taxpayers Union and many others. That Plan may have the answer to replacing our archaic Income tax code. The Plan is called the Fair Tax and is Sponsored in Congress by Congressman John Linder. HR25.

It is currently in Congress awaiting more discussion. The Fair Tax is like a new Car for our economy; it is streamlined, easy to operate and will be a great help to American families and American workers. In Fact, one supporter said it is the tax plan that will "Supercharge our economy" and many Economists agree.

One thing is for sure our current tax code is an old junker that Congress just keeps tinkering with. The Problem is that Congress has turned the current tax code into a rust bucket that runs over our American Economy, encourages outsourcing and offshore investment, feeds the trade deficit and fails to Tax our Economy and Families Fairly.

Before 1913, we did not have the income tax system you see today. The American Economy was taxed using consumption taxes primarily.

The time has come for us to think about our American future in light of a Global economy. In this new century we need a tax system that fits the 21st Century, a tax system that can promote good paying jobs and economic growth that benefits American working Families here at home.

The Third choice may be the best choice but that will take discussion with the American people and Congress. Know that many in Congress and the Lobbyists that support them will hate it but that is a sign that it is a good thing."

Mr. President , you say this and Americans will follow.

www.fairtax.org or read Neal Boortz's Book "The Fair Tax Book"