• Current circumstances call for bolder action.
• The Phase 1 Enhanced Plan incorporates the features of Phase One and gets us a step closer to Phase two.
• I call on the Super Committee to pass the Phase 1 Enhanced Plan along with their spending cut package.
• The Phase 1 Enhanced Plan unites Flat Tax supporters with Fair tax supporters.
• Achieves the broadest possible tax base along with the lowest possible rate of 9%.
• It ends the Payroll Tax completely – a permanent holiday!
• Zero capital gains tax
• Ends the Death Tax.
• Eliminates double taxation of dividends
• Business Flat Tax – 9%
  • Gross income less all investments, all purchases from other businesses and all dividends paid to shareholders.
  • Empowerment Zones will offer additional deductions for payroll employed in the zone.
• Individual Flat Tax – 9%.
  • Gross income less charitable deductions.
  • Empowerment Zones will offer additional deductions for those living and/or working in the zone.
• National Sales Tax – 9%.
  • This gets the Fair Tax off the sidelines and into the game.

Incumbent Democratic Senator Blanche Lincoln .. struggling for her political life in Arkansas.. runs an ad saying that her opponent, Republican John Boozaman, is “excited about putting a 23 percent national sales tax on everything you buy.” In the Colorado Senatorial race polls show Democrat Michael Bennet trailing Republican Ken Buck by as much as five percent, Bennet is running ads saying that under Buck’s tax reform plan a bag of groceries could cost $11 more and your prescription drugs could cost over a hundred dollars more.

In North Carolina’s 8h Congressional District Republican Harold Johnson is hoping to oust Democrat Larry Kissell. There we have the NEA (National Education Association) Fund for Children and Public Education running an ad replete with the sounds of a crowd attending a college football game (note the appeal to sports fans) and an announcer saying “It’s Harold Johnson Tax Day at the game, where every fan pays a 23% national sales tax.” The ad goes on to say the tax would be added to tickets, hot dogs, groceries and gas.”

That’s all rather frightening, isn’t it? After all, who would want to see their grocery, gas, food, prescription drug – or any other bill, for that matter – increased by 23%? Answer: Not a soul. So what sane candidate would ever propose such a tax increase? Answer: No sane candidate would.

So … where are these ads coming from? Even the most baseless of attack ads must have a grain truth to hold on to, if for no other reason than to avoid generating nothing other than ridicule and laughter.

Read the full article on his site

My father, Ronald Reagan, battled successfully to simplify the tax code but his work has been largely undone. The arrogance of those who use the tax code to manipulate citizen behavior and Congressional ambitions for personal advancement have again corrupted the already destructive income tax system. It will fall to the American people to once again reject unfair taxation that favors the mighty at the expense of the public.

…

My father said, “Our federal tax system is, in short, utterly impossible, utterly unjust and completely counterproductive, it reeks with injustice and is fundamentally un-American… it has earned a rebellion and it’s time we rebelled.” That second great tax rebellion is now underway at www.onlinetaxrevolt.com.

Tea Party patriots, FairTaxers, Flat Taxers, and most Americans of every political persuasion understand that the federal tax system fuels unchecked government spending, hides the cost of government from the American taxpayer and has become corrupted into indecipherability by Congressional profits and power. Citizens are coming together from across the political spectrum and across the nation to wake Washington up to the voice of the American people.

Read the full article @ townhall.com

And now Global taxation: The U.N.’s World Health Organization is Eyeing Global Tax on Banking, Internet Activity, etc.

The World Health Organization (WHO) is considering a plan to ask governments to impose a global consumer tax on such things as Internet activity or everyday financial transactions like paying bills online.

Such a scheme could raise “tens of billions of dollars” on behalf of the United Nations’ public health arm from a broad base of consumers, which would then be used to transfer drug-making research, development and manufacturing capabilities, among other things, to the developing world.

Click here for the article found on Fox News titled “U.N.’s World Health Organization Eyeing Global Tax on Banking, Internet Activity”.

New taxes to fund the federal government’s plan for higher health insurance spending continue to be debated in Washington. According to a new Bloomberg report, the top surtax rate will be 5.4 percent in the House plan. That will be the top rate in a three-tiered surtax aimed at high-income tax returns:

The latest proposal—one of several floated on Capitol Hill in the past few days and the third analyzed by the Tax Foundation since Friday—would impose a surtax of 1 percent on married couples with adjusted gross incomes (AGI) between $350,000 and $500,000 (singles between $280,000 and $400,000); 1.5 percent on couples with incomes between $500,000 and $1 million (singles earning between $400,000and $800,000); and 5.4 percent on couples earning more than $1 million (singles beyond $800,000).

States have been raising taxes on this same group, leading to concern over how high the combined tax rates would be in each state, especially in the growing number of states with double-digit tax rates.

“Are you sick and tired of being forced to file a tax return every year?” asks Wurzelbacher on his IRSvote.com website. “I’m here to ask my fellow Americans to join me to me to make this the last year we ever have to file a tax return. I’m going to give the American people the opportunity to vote the IRS out.”

Friends,

I am extremely happy to tell you that HR 25, the FairTax, has been reintroduced and is alive and well in the 111th Congress.  Not only that, the FairTax has been dropped with more original co-sponsors than it has ever had.  This is an incredible accomplishment, and it has everything to do with you and the immense passion and work you have put into it.

As a citizen co-sponsor of the FairTax you have played an active role in illustrating to other Members of Congress that the FairTax is important to you and is the right step for America to once again regain her prominence.  Thank you for that.

Our citizen co-sponsor effort has become a powerful tool, as I hoped it would.  This means we need to work together to enhance and strengthen it.  Our goal in Congress is to reach 100 co-sponsors on the bill, and our goal for the citizen co-sponsors is to reach 100,000.  I truly believe that if our citizen co-sponsors can achieve that goal, then that will be the catalyst for HR 25 crossing that 100 co-sponsor threshold.  So now is the time, if you haven’t gotten a friend to join the fight, do it today by sending them to www.johnlinder.com. If you already have, thank you; now go try and find ten more.

The success of the FairTax to date has been tremendous, and it is all a result of your hard work.  It is incumbent upon all of us that we step up our efforts  to ensure that the FairTax has not yet reached its peak, but is still climbing.

Thank you again for all you do,

John

From the New York Times, November 9, 2008

The country is now in the midst of the deepest economic crisis since the Great Depression. But as a new administration prepares to enter the White House, the crisis could end up being a potent ally for change. Without it, political resistance to the steps needed to address our most acute and longstanding economic problems would be almost insurmountable.

Despite broad agreement that the nation needs to increase spending in many domains — including infrastructure, health care, scientific research and clean energy development — no one has forged a legislative coalition capable of raising the necessary tax revenue. But with the country sliding into what promises to be a sharp and protracted economic downturn, it is imperative to increase spending over the short run, regardless of how we pay for it.

Even stalwart conservatives concede the point. For example, Martin Feldstein, the Harvard economist who was an adviser to the campaign of Senator John McCain, recently wrote in The Washington Post, “The only way to prevent a deepening recession will be a temporary program of increased government spending.” Mr. Feldstein suggested that government might need to offset a shortfall of some $300 billion in household spending.

In the long run, though, it will be necessary to raise enough tax revenue to balance the budget. One of the most effective ways to do that is by changing what we tax. Most federal revenue now comes from the income tax. Because a family’s annual income equals the amount it spends each year plus the amount it saves, we are effectively taxing savings. And savings rates have fallen precipitously, often dipping into negative territory as families have used home equity loans and credit card debt to spend more than they earned. Because the country needs to save more, taxing savings makes no sense.

The first reform that Barack Obama should consider is replacing the progressive income tax with a progressive tax on consumption. A family would report its income to the Internal Revenue Service as it does now, and also its savings, as it now reports contributions to retirement accounts. Annual consumption would then be calculated as the family’s income minus its savings. Its taxable consumption would be that amount minus a large standard deduction — say, $30,000 for a family of four.

A family that earned $60,000 and saved $10,000, for example, would have taxable consumption of $20,000. Initial tax rates on consumption would be low, and would then rise steadily with consumption, topping out at higher levels than the current top rates on income.

Such a tax could raise more revenue than the current system, yet would be far less burdensome for families at nearly all income levels. Because of the large standard deduction, middle-income families would pay less than they did before, and high-income consumers could limit their tax increases by saving more.

How painful would that be? Some wealthy families now spend millions of dollars on coming-of-age parties for their children. A steeply progressive consumption tax would encourage them to spend less, which would not be much of a sacrifice, since the main effect would be to lower the bar that defines an acceptable coming-of-age party for people in their tax bracket.

Other changes in what we tax could further reduce the revenue shortfall while producing positive side effects. Energy and climate specialists, for example, have long advocated taxes on carbon. The burden of these levies would be lessened by the resulting reductions in pollution and congestion.

Imposing new taxes is never easy. But recent research suggests innovative ways of making it more palatable. Behavioral economists have shown that the pain caused by a loss is far greater than the pleasure caused by a gain of the same magnitude. This asymmetry, called loss aversion, helps explain why it is so hard to pay higher taxes. Doing so means reducing consumption now — a loss that is immediately painful.

To overcome this hurdle, Congress could vote to increase future taxes — a strategy that happily coincides with current fiscal imperatives. Tax increases are never a good idea when the economy is in the doldrums, but the current downturn will not be permanent. Higher taxes could be phased in gradually, after income growth resumes. As long as each year’s tax increase is smaller than the corresponding growth in income, painful reductions in consumption will not be necessary.

Evidence supporting this strategy comes from “Save More Tomorrow,” a payroll savings program designed by the economists Richard H. Thaler and Shlomo Benartzi. Under this program, workers can allocate a portion of future salary increases to retirement savings accounts. Hundreds of corporations report that their employees began saving at sharply higher rates after the introduction of this program.

It would be quixotic to imagine that losses from the current economic meltdown won’t be painful. But the crisis also opens new doors to policymakers — providing them with options that would have seemed unthinkable just a few months ago.

The government sent out more than $1 billion in fraudulent refunds last year

WASHINGTON — The government sent out more than $1 billion in fraudulent refunds last year and offered this explanation Thursday for the bad checks in the mail: The Internal Revenue Service has too few resources to pursue every tax fraud case.

IRS investigators never even looked at an estimated $742 million in fraudulent refunds, according to a report by the Treasury Department office that monitors the agency. When they did identify an additional $264 million in bad refunds, it was too late to stop them from being issued.

The report noted that the IRS must divide its limited resources among numerous areas of compliance. “However, this is a significant revenue loss to the federal government and that must be addressed,” said J. Russell George, the Treasury’s inspector general for tax administration.

The number of improper refunds filed appears to be growing rapidly, the report said. “The problem is becoming unmanageable, and the IRS cannot afford to continue handling it in the same manner as in the past,” according to the report. It urged the tax agency to make the refund screening program — known as the Questionable Refund Program — a priority.

The IRS has estimated that the tax gap — the difference between taxes owed and taxes actually paid — at about $290 billion a year. Of that, about 57 percent comes from individuals understating incomes or overstating deductions and exemptions.

IRS spokesman Terry Lemons said the agency has made significant improvements over the past two years. “We stop the vast majority of fraudulent refunds and we prosecute people who try to cheat the system,” Lemons said.

George’s report recommended the IRS divert resources to go after such fraud cases. But Lemons said that could hurt other operations and mean fewer dollars from enforcement activities.

Lemons said the agency issued more than $470 billion in refunds in 2006 and 2007.

The report said the IRS fraud detection centers stopped more than $1.2 billion in fraudulent refunds in 2007, compared with $412 million in 2005, the last year the detection system fully functioned.

Because the system picks up only those refunds with higher dollar values, about 500,000 potentially fraudulent refunds did not enter the centers’ screening process. Had those refunds been included, the centers would have identified an additional $742 million in fraud, the report estimated.

In 2006, because of a technical problem in the fraud detection system, the IRS succeeded in identifying and stopping only $189 million in fraudulent refunds while paying out an estimated $894 million, the report said.

The Treasury’s inspector general, in a separate report Thursday, lauded the IRS for what it said was a “generally successful” 2008 filing season during which returns and refunds were processed in a timely fashion.

This report said the IRS did a good job in overcoming several obstacles, including changes involving the alternative minimum tax. The agency was also responsible for sending out checks to more than 130 million people as part of the economic aid plan signed into law in February.