Some people question if our party is going to limit our options for replacing our broken tax code to the FairTax plan. I will say that the answer is no. We chose the FairTax plan and included it in our platform because at the time, that was and is our primary choice to replace the broken tax code.
Our party does back the FairTax plan, which replaces all income, corporate, payroll, social security, medicare, estate, gift, capital gains and alternative minimum taxes with an inclusive National Sales Tax of 23%, To make the NST a fair tax, all adult citizens will recieve a monthly check of $187 as well as a check of $65 per child living in that household. Under our version though, it will be a flat $200/month for every man, woman, and child living in that household.
Under the current version of FairTax, it is a flat National Retail Sales Tax of 23%. However, under our version of FairTax, we will consider a NST of 25% of a Value Added Tax of a rate that will be sufficent to raise the revenue necessary to finance our programs. The FairTax itself may have to be modified in order to pass through Congress as well as comply with World Trade Organization agreements as long as we are working with the WTO.
If we cannot enact a national consumption tax, then we will consider the Flat Tax. Bear in mind that the flat tax will not tax the underground economy, tax the offshore economy, and that the tax code has been flattened several times before. In defense of the Flat Tax though, many nations in Eastern Europe have adopted the flat tax and have been reaping the results.
Regardless of any of the tax systems we will choose, we will enact a National Land Tax on the unimproved value of land. Libertarians such as Milton Friedman advocated a land tax. People on the left advocated the land tax. The land value of the USA is around $33 trillion at the time of this post. A 2% tax would raise $660 billion. In addition, the land tax will encourage slumlords to dump their run-down properties and encourage land efficency. Finally, the better the land is managed, the increase in the value of the land and the more tax revenue is raised.
One thing is for certain, our tax code must be ripped out and replaced with a system that is fair, paperless for most Americans, raise the necessary revenue, promote savings and investment, encourages businesses from all over the world to relocate to the USA, and has the broadest base possible for taxation. We will not settle for anything less.