Only Fair Tax for U.S. Would Be a Sales Tax

The Reagan Administration’s tax reform and simplification plans are going to provide a little, if any, help to taxpayers or government.

The only fair tax is a sales tax. If a federal sales tax was collected, all other taxes (income, social security, property, inheritance, etc.) could be abolished, and government would have enough money for social programs and defense. The major disadvantage is that tax consultants and Internal Revenue Service employees would lose their jobs.

But think of the fairness of this sales tax system. The family that buys a Cadillac can afford to pay more tax than the family that buys a Chevrolet. People buying the house on the hill would pay sales tax on it, while people who can’t afford to buy a house wouldn’t be taxed on the rent they pay.

With a federal sales tax, even welfare cases and illegal aliens would pay their share.

Individuals and corporations would not be penalized for their earning ability. Companies would stop moving to other countries to avoid having their profits taxed. No one would need to keep records of, and report on interest paid or collected.

The federal sales tax could be set up to be collected at every level,mManufacturers would pay tax on raw materials, wholesalers would pay tax when buying from manufacturers, retailers would pay tax when buying from wholesalers, and consumers would pay tax when buying from retailers. This would keep the sales tax percentage very low so no one would be hurt badly, and the retailers and wholesalers would be paying tax on items they keep for personal use.

The sales tax could be collected by the federal government and a percentage sent back to state and local governments, so states and tax systems could abolish them and reduce their cost of operation.

Of course there are details to be worked out, and problems will surface, but sales tax is the only way to collect from everyone.

DENNIS HEIDEBRECHT

Huntington Beach