Most of the Oklahoma congressional delegation to Congress have co-sponsored The Fair Tax, a tax reform bill. This bill will be receiving a vote in the House Ways and Means Committee within the next four to six weeks. This was confirmed in a letter from Congressman Bob Woodall who serves on the House Budget Committee.
The Fair Tax will replace the current, progressive income tax that is levied today with a national sales tax or consumption tax. The tax will only be levied on the purchase of new goods and services, excluding necessities. The rate of 23% combines the lowest income tax bracket of 15% with the payroll tax rate of 7.65%.
Under this system all consumers will be taxed. Residents will be able to keep their entire paycheck. Another benefit is that all residents will have “skin in the game” which could make them more conscious of how the government is spending their tax dollars. All residents and companies will be taxed at the same rate. Notably, the IRS could not be used as a political weapon against groups and individuals who do not agree with a particular presidential administration, whether it is republican or democrat.
To make allowances for low-income, legal residents; there will be a pre-bate which gives an advance to individuals and families below the poverty level to purchase necessities tax free. Social security and Medicare would be more stable because it will be funded by everyone who spends money, not just workers.
Both Oklahoma senators and four of the five Oklahoma representatives have co-sponsored this legislation. Members of the House Ways and Means Committee can be contacted here.