SANFORD – On June 12, there’s going to be a barbeque held in Sanford, along with plenty of entertainment.
“We’re going to have two bands there for some variation, a really neat magician doing card tricks, and we’re going to have a raffle with a money tree hung with lottery coupons, so somebody could win a good chunk of money,” said Larry Walters.
Money, as it turns out, is the central theme of the “Keep Your Whole Paycheck BBQ,” which will be held at the Route 46 Entertainment District at 4316 W. State Road 46 from 3-6 p.m.
“The Keep Your Whole Paycheck BBQ is a fund-raiser, not a teaching event,” Walters said. “It’s an area where we hope to bring in people who are supporters and we hope to bring enough of those in so we can pick up a few thousand dollars. It’s basically to give us a boost up financiallly so we can do more to get our message out.”
The food and entertainment comes along with a little bit of politics as well, from a Florida-based organization called the Florida Fairtax Educational Association, a nonprofit, nonpartisan organization that Walters heads up. It’s a Sunshine State affiliate of a national organization called Americans for Fair Taxation, which was started in 2003 on the premise that American businesses and the U.S. economy were being weighted down by a burdensome tax system that is too complicated, has too many loopholes, and that nobody truly understands. A better solution, Americans for Fair Taxation has proposed, is a simple national sales tax that replaces both the federal income tax and payroll taxes used to fund Social Security. Businesses would no longer have to deduct taxes from their workers’ paychecks, and employees would keep every dime they earn — except, of course, for what they decide to go out and spend it on.
“They did a bunch of research and came up with a bunch of information on how the income tax system functions in our country and what’s the most detrimental thing about it,” Walters said of the national association. “They decided what we’d like to do is come up with a better solution for funding the government, something that’s more transparent. What came out of this workshop was a national sales taxes.”
FairTax is the Florida affiliate, and Walters said “Our mission is strictly to educate the public and our elected representatives on the fairness of this.”
The proposal is to create a national sales tax where people pay 23 cents out of every dollar they spent.
“If you take the raw cost of a good or service, it’s 30 percent,” Walters said
Walters said the current tax system is too cumbersome and hurts the overall business climate in this country.
“One of the things the research discovered is under the income tax, we pay more because of taxes imposed on businesses,” he said. “In essence a business or corporation is a collection agency for the IRS (Internal Revenue Service). Taxes are assessed to a business or corporation. A tax assessed to a corporation is calculated to be one of the elements of the cost of doing business. When the cost of doing business is calculated, then they’ll determine what their cost is going to be. So they’re a pseudo-collection agency for the IRS.”
Another problem, he said, is that Congress is constantly rewriting the tax laws, creating new tax breaks or loopholes for particular interest groups.
“The income tax is very easy to manipulate,” he said. “Today, for example, the income tax is over 71,000 pages of codes and regulations,. The income tax started out as a simple tax, but now it’s up to three tax brackets and has been amended more than 14,000 times in the last 20 years. In 2010 alone, there were 509 amendments to the tax code. It is so complex that literally no one can comply with it.”
Florida currently has no income tax and a statewide sales tax, but Walters said Florida shouldn’t be considered a model for the nation.
“Even though Florida has a sales tax, they have a lot of exemptions to it,” he said. “Under our proposal, nothing is exempt except used goods and tuitions and fees for some kind of education. That’s an investment in human capital. Otherwise it would be a flat percentage applied to everyone, including the underground economy. There’s no multiple taxation on anything under our system. That simplifies collection. That includes the ability to administer and monitor what’s going on with the businesses in your state.”
Critics have accused a national sales tax of being detrimental to low income families that need to spend their entire paycheck on goods and services, and who might otherwise pay nothing at all through a graduated income tax system. But Walters dismissed those claims.
“Under the fair tax, it’s basically a progressive tax because people who are wealthier spend more, so they would be paying more,” he said. “Being cognizant of that regressive nature of the sales tax, the fair tax is an effort to have a tax system administered equally to all participants. You pay at the cash register as you go. You keep your whole paycheck”
Even with eliminating payrolls taxes, Walters said the association’s research shows that “Social Security would be funded by the 23 cents out of the dollar national sales tax. The calculation of the sales tax was done so that it is revenue neutral, and under the Fair Tax proposal, our economy and our GDP (Gross Domestic Product) would grow almost 10 percent greater than under the income tax, regardless of what the financial situation was at the time.”
Walters said he hopes a good crowd turns out for the Keep Your Whole Paycheck BBQ, and that people keep an open mind about the Fair Tax plan.
“We’re getting a very, very good reception from those who can think about it a little,” he said. “Where we get the opposite, we’ve got those who are ignorant and don’t care about it and don’t want to change things and are happy with the devil they live with.”
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