FairTax FACT: The income tax exports our jobs, rather than our products. The FairTax brings jobs home.
FairTaxFraud: By giving the rich $700 billion in free money from estate and gift taxes they will do exactly what they did when Bush and Reagan gave the rich huge tax cuts. Did they invest the money in building American jobs for a better tomorrow? Did they make America a better place to live? Did they modernize existing factories to compete with foreigners? NOPE! Even though America has one of the least repressive tax systems in the entire civilized world, they did exactly what Ross Perot said they would do. The took the money and ran. They used the money to move the factories and jobs to Mexico, China, and India where they could get prison labor and third-world wages totaling mere cents per hour for hard work which no American could work for. Ross Perot was dead-on about the “great sucking sound.” Wealth knows no loyalty or patriotism in America. The FairTax will result in more outsourcing and un-American behavior. The bottom line is the FairTax is a job killer. The alternative No-Tax Plan would tax all products that were NOT manufactured with American labor. It would tax money and property of those who outsource jobs and businesses. They can’t escape the tax as long as they own property in America. It provides extremely strong financial incentives for bringing jobs back to America and would save millions of jobs.
FAIRTAXER: First, our current – regressive – income tax system taxes productivity which has been pushing U.S corporations offshore for decades now. Ever heard of Daimler-Chrysler? The reason they were Daimler-Chrysler and not Chrysler-Daimler is because the corporate executives weighed the option of bringing the merger of Daimler (a German-born corporation) and Chrysler (an American-born corporation) to the U.S. versus taking it to Germany. It’s pretty obvious the weight of the U.S. tax system out weighed other options to bring the merger to U.S. soil.
By untaxing corporations, the FairTax will turn the United States into a tax haven for businesses. Under the FairTax, the United States stands alone as the only advanced nation in the world with a zero rate of federal tax on productive income, whether from returns on capital or personal earnings. The U.S. becomes the most attractive, tax-haven venue in the world for investment, manufacturing and exports. Investment lost to foreign outsourcing repatriates to our shores as the U.S. becomes the global seat of production, management, research and export activity. Capital trapped offshore by our tax morass repatriates as well. Eventually, other nations will be forced to follow suit and reduce marginal tax rates or lose their investment to the U.S.; this global reform stimulates worldwide economic growth to the benefit of the global community, thus providing U.S. producers with larger markets.
Second, with the exception of countries that employ a VAT (Value Added Tax), America has one of the MOST regressive tax systems. (See Definition of regressive tax). The CBO may disagree with that statement, but when you realize that the richer you get, the more resources you have to avoiding taxes, you’ll understand where we’re coming from. The FairTax does not tax productivity, the FairTax does not redistribute wealth, and the FairTax does not have loopholes the rich can play with.
Third, if you had a choice of moving into either of two houses where the only real difference was that House A paid your utilities (inclusive in the price) and House B did not (for the same price) which house would you choose to live in? Isn’t the choice obvious? So, if the FairTax lowers costs in the U.S. and taxes imports (which it DOES propose), then isn’t it obvious that with the FairTax more people and more businesses would want to move here and thus bring more jobs to U.S. soil? It would be cheaper for companies to open their doors on U.S. soil and sell to the rest of the world than it would be from any other country.
Let’s look at the scenario of corporations moving their business to Mexico, China, and India. Under our current system that is exactly what has happened since the Internet bubble burst in 1998 and it continues to happen today. Why is that? Because we’re not taxing imports and making it easier for companies to stay here in the U.S. The FairTax, on the other hand, removes the corporate tax burden, does not tax exports on goods, and does tax imports. So, moving a company to any other country would alienate their goods, cost more money to import to the U.S. and reduce their profits. Again, I don’t know what these guys at FTF are thinking, but it’s backwards and it doesn’t smell right.