Michael D. Warlick
Michael D. Warlick, Sr., Statement
The current income tax system (and we use the term “system” loosely) imposes economic and administrative burdens on American families that have become intolerable. Even the 1040EZ is too complex for many taxpayers, and the traditional Form 1040 that must be completed by those who itemize to take advantage of deductions is almost incomprehensible. Even with the help of software like TurboTax (which cost us $80 this year), completing a tax return is still at least a two-day project.
Karen Walby, PhD, compared the total compliance costs and the budget of the Internal Revenue Service. In 2006, American families and businesses paid $304 Billion to prepare and file their tax returns – including everything from the cost of corporate accountants and tax attorneys to the fees an individual taxpayer paid to H & R Block. The necessary record-keeping costs businesses must incur to document deductions, credits, offsets are staggering.
The United States now has the highest corporate tax rate of any developed country, and company and company relocates their headquarters from the U.S. to other countries to avoid the burdensome tax structure. Cisco is just one recent example. When Congress decides to increase corporate taxes, does no one understand that these taxes are ultimately passed on to individuals in the costs of goods and services? Cutting the income tax rates for middle-income taxpayers while increasing corporate rates is nothing more than a shell game, and more and more American taxpayers understand that this is not even real tax relief, much less true tax reform. A few more dollars in our paychecks are quickly absorbed by higher prices at the cash register.
We urge you to consider the real and measurable tax reform offered by HR-25, the Fair Tax bill introduced in the 112th Congressman by Rob Woodall (GA-7) and now co-sponsored by 52 Congressman. The national retail consumption tax on new goods and services, coupled with a monthly prebate passed on the number and household residents and keyed to the poverty level as determined by the Department of Health and Human Services, is the one true tax REFORM measure in Congress. Based on $22 million in research by leading economists at seven universities, FairTax is the solution our country needs.