Friday, September 5, 2003
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Friday, September 5, 2003 |
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Collins calls for national sales tax In a speech Wednesday to members of the Fayette County business community, U.S. Rep. Mac Collins outlined his plan for economic recovery and job creation, calling for reform of specific tax measures which handicap American business and workers. Collins discussed, with members of the Fayette County Chamber of Commerce, how economic growth, prosperity, and stimulus must include job creation. "We have seen all too often how oppressive taxation has led to a disincentive for investment in our economy and a loss of jobs," said Collins. "We have to level the playing field so that American workers can be competitive in the global marketplace, which we are in." Citing tax code provisions which penalize American-based business which have revenues generated by foreign sales, Collins explained how American business is disadvantaged in competing with foreign companies who are not penalized by similar tax codes. "There is an American worker on an assembly line making a product that they hope to sell to a customer in the U.S. or overseas. On an identical assembly line in another country, there is another worker making a very similar product to sell to the same customer. Because of our tax codes, the American worker is at a disadvantage," Collins explained to the approximately 40 attendees. "All of the taxes are added to the price of the product and because foreign nations do not have similar tax provisions, they can sell their products for less than American businesses. This holds back growth our economy needs in order to create new jobs." To eliminate this disadvantage, Collins suggested passage of H.R. 25, the Fair Tax sponsored by Georgia Congressman John Linder, to allow business to compete on a level playing field with foreign competitors. A national sales tax, H.R. 25 only taxes the final domestic sale of retail goods or services, eliminating costly compliance with complicated tax codes. "Most other nations already have a value added tax," Collins said. "This allows them to sell their products for less because they are passing less tax onto the consumer, underselling American companies because we lack a similar system. This causes many companies to take their jobs to other nations with more favorable tax treatment." Collins said that a similar system in this country would not only export more American products, but would also grow business and create jobs. "It's all about jobs. Jobs come from profits. Profit has become a dirty word in Washington. Many people think that if a business is profitable it is because the employees are crooked or greedy. But, profits are what pay wages, they pay for health benefits, they pay for retirement plans and 401(k) plans, and they allow business to grow and create new jobs. Without profits, there is no economy," Collins said. Additionally, Collins cited the tremendous loss to the government from waste, fraud, and abuse caused by compliance with complicated and unfair tax codes. "The General Accounting Office estimates that between $200 billion and $800 billion each year is lost because taxpayers either intentionally or unintentionally misfile their taxes. The tax code is so complex that it encourages lost revenue to the government. The Fair Tax would eliminate this loss, spur growth, and create jobs," Collins said. Called the Fair Tax Act of 2003, H.R. 25: Repeals all individual and corporate income taxes, payroll taxes, self-employment taxes, capital gains taxes, estate taxes and gift taxes. Imposes a revenue-neutral national sales tax on all new goods and services at the point of final purchase for consumption. Business-to-business transactions and used products (which have already been taxed) are not subject to the sales tax. Rebates the sales tax on all spending up to the poverty level. Proponents of the Fair Tax say that it would: Dramatically reduce the costs of goods and services by 20 to 30 percent. Allow consumers to keep 100 percent of their paycheck, pension, and Social Security payments. Gross Domestic Product will increase by almost 10.5 percent in the first year after enactment. Compliance costs would decrease by 90 percent. Real investment would initially increase by 76 percent relative to the investment that would be made under present law. While this increase would gradually decline, it remains 15 percent higher than under the existing tax structure. Exports would increase by 26 percent initially and would remain more than 13 percent above the level under the current tax system. Real wages will increase. Increases incentives to work by as much as 20 percent in many households, leading to higher economic growth and efficiency. Interest rates will fall 25 to 35 percent. Collins, as well as 31 other prominent members of the House of Representatives including Majority Leader Tom DeLay, has signed onto H.R. 25 as an original cosponsor.
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