Senator Menendez Comment and My Response

October 1, 2009

BY FAX 202-228-2197
Hon. Robert Menendez
528 Senate Hart Office Building
Washington, D.C. 20510

Re: Fair Tax, S.296

Dear Senator Menendez,

I was disappointed with your response (copy attached) to my e-mail in support of the Fair Tax, S.296. Your letter merely recapped the highlights of the Fair Tax, which I already know, and then abruptly changed the subject to an irrelevant topic - the Alternative Minimum Tax. I had hoped to see a more rigorous and thorough analysis of the Fair Tax coming out of your office.

I still would like to hear your comments on the efficacy, compliance rate, macro-economic effects and equitable considerations of the Fair Tax. If you or your staff would be willing to receive a briefing on this transformative tax reform proposal, I would be glad to arrange that. I am certain that a briefing would improve the quality of your office work product on this issue.

Please let me know if you would be willing to receive a briefing.

Sincerely,



James M. Bennett

encl.

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September 30, 2009


Dear Mr. Bennett:



Thank you for contacting me to express your support for the Fair Tax Act of 2009. Your opinion is very important to me, and I appreciate the opportunity to respond to you on this critical issue.



As you may know, the Fair Tax Act of 2009, S. 296, would abolish the Internal Revenue Service in addition to many federal taxes, such as the income tax and the alternative minimum tax. As an alternative, this legislation would implement a national sales tax of 23 percent on the use or consumption of taxable property and services, and would grant states the primary authority for the collection of this revenue. This bill has been referred to the Senate Committee on Finance.



Like you, I too am concerned about the tax burden that's placed on hard working New Jersey families. I know how hard New Jersey's middle class families are working to make ends meet, provide for their children's education, and save for a secure retirement. That is why I have worked to improve tax incentives for families to help them save for education and retirement and have made finding a long-term solution to the alternative minimum tax a top priority to prevent more New Jersey families from being unfairly targeted by this tax.



The alternative minimum tax was enacted to ensure that taxpayers in higher income brackets did not avoid paying income tax. You will be pleased to know that I introduced and passed an amendment to the economic recovery package in the Senate Finance Committee for a one-year patch to the AMT. I believe this tax unfairly raises taxes on middle class taxpayers. Before a patch was passed last year, taxpayers earning $74,660 or more could have been subject to the paying the AMT. In total, more than 1.6 million New Jerseyans faced the AMT last year before the patch, and many of those were middle class taxpayers. New Jerseyans made up the highest percentage of taxpayers in any state that would have been subject to the AMT. This tax was never meant to burden middle class taxpayers, and we are making sure they are not hit with an unexpected tax increase, particularly during this economic crisis. By approving this fix, we ensure that millions of middle class Americans can keep more than $3,000 in their pockets at a time when family budgets are extremely tight.



Additionally, as a member of the Senate Budget Committee, I worked with my colleagues to craft the 2009 budget resolution, S.Con.Res.71, which provides for an additional year of tax relief for the alternative minimum tax. Please be assured that I will continue working to prevent middle-class taxpayers from having to pay the alternative minimum tax.



Again, thank you for sharing your thoughts with me. Please do not hesitate to contact me if I may be of more assistance. I invite you to visit my website (http://menendez.senate.gov) to learn of other important issues to New Jersey.