Fair Tax Nation

Replace All Federal Taxes on Income with the Fair Tax Act , HR 25

Here is a letter I have sent to my local papers and to the Newark Star Ledger. Please feel free to use as much or as little as you choose in a letter to your local paper over your name.
~Jim

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Infrequently the Internal Revenue Service needs to be called out, and this is one such time. If we had the Fair Tax, the nonsense I am about to describe would go away.

The discussion begins with Series E and Series EE US Savings Bonds, which are popular as baby and wedding gifts - but which may become tax liabilities to their recipients. Many Series E bonds stopped paying interest in 1995, and many Series EE bonds will stop paying interest soon. The holder who puts them away in a safe deposit box and lets them lapse acts at his peril. He or she can anticipate a bill from the IRS for penalty and interest for tax due from the year the bonds lapsed.

This absurd result is contrary to cash-basis accounting, which applies to most individual taxpayers. That is, taxpayers realize taxable income when they receive it, and they incur a tax deduction when they pay it. A cash-basis taxpayer who waits to redeem a bond has not yet realized the income and should not yet have to pay income tax on it. That same taxpayer is actually losing money due to the effects of inflation.

The end of this - and similar - tax-code anomalies lies in the Fair Tax legislation pending in Congress. The Fair Tax replaces income taxes with a national retail consumption tax that is transparent, efficient, supportive of economic growth and fair.

~Jim Bennett

Mr. Bennett is the New Jersey State Co-Director for Americans for Fair Taxation

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As always...great letter Jim and certainly a point most wouldn't be aware of.

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