Don't be fooled

Don't be fooled by the "Fair" Tax Amendment. Supporters claim that it will target corporations and millionaires. A course in basic economics and a review of what is happening in California and New York will dispel this untruth.

First of all, targeting corporations is a myth. Corporations are formed to produce goods and services and to make a profit in order to pay dividends to shareholders. Taxes are a cost of goods and services sold along with interest on debt, cost of raw materials, wages, benefits and so on. If taxes are raised, the cost of goods and services sold will increase. The corporation has several choices: raise prices, cut costs, reduce dividends or move to a more tax-friendly state.

Raising prices will be mitigated by competition in the open market and has a limit as to how effective that will be. Cutting costs means automation, reducing pay and benefits costs or eliminating some plants or offices.

Reducing dividends will impact stockholders. Before you say "So what?", think about this. That means that stock prices may slip, reducing the value of 401(k) and public pensions. The latter could lead to further increased taxes to support public pensions and a downward spiral in our economy. Haven't enough plants and offices closed in Illinois?

As for the rich moving out of state, it will happen. Just look at what is going on in California, New York, and even Chicago. The rich are mobile, while the rest of us will be here. Fewer taxpayers to support the same costs.

Vote no.

Bruce Sanders

Naperville