Greetings from Friends of Jim Vaughn for Congress,

As a business owner, I feel the pain and injustice of our Business and Occupation Tax. As a result, I am looking to take a two prong attack to eliminate the B&O Tax and have it replaced with a fair corporate tax. In conjunction with my campaign, I am raising public awareness in order to submit an Initiative on our state Election Ballot in 2009 to eliminate the B&O Tax and call for tax reform.

Given the fact that we have lost a significant portion of our industrial base and that we have a significant trade deficit, I intend to initiate legislation at the federal level (upon being elected to congress) to ban this form of tax nationwide. Reason being that this pyramid tax discourages capital investment by business, is detrimental to our nation's economy and is undemocratic given the fact that it is not transparent.

I need assistance in order to raise the required funds to make my campaign a success and eliminate the B&O Tax. I believe that business owners will be more than willing to support this effort and can appreciate the potential ROI.

Please note that although I am running for the 8th Congressional District, this campaign will benefit everyone in our state and I am asking for everyone in our state for support. On my website, individuals can contribute to the Iniative or the Campaign. There is a $2,000 limit on the campaign contribution but no limit for the B&O Iniative, so to all the Bill Gates, please feel free to contribute.

History of the B&O Tax: At the economic low point of the depression in 1933, Washington enacted the Gross Tax Receipt, now known as the B&O Tax. During this time property and income taxes plummeted and The State Department of Revenue described the tax as "temporary, emergency revenue".
Business and Occupation Tax (B&O): Otherwise known as a Gross Receipt Tax (GRT)
• GRT is a tax on all gross revenues incurred by a business not just the profits.
• GRT is a stealth tax which is hidden from the consumer.
• GRT is a tax on a business whether they make a profit or not.
• GRT is imposed on each stage of the service or product and creates a pyramid effect which is in turn passed on to the consumer.

How does the pyramid of GRT affect the consumer?• You visit a Mexican restaurant and buy a burrito. Let's explore the taxes on this product with a gross tax receipt in place.
• Company A makes tortillas and pays a B&O Tax.
• Company B is a trucking firm that delivers the tortillas to a wholesaler and pays a B&O Tax.
• Company C is the wholesaler and pays a B&O Tax.
• Company D is a trucking firm that delivers the tortillas to the restaurant and pays a B&O Tax.
• Company E is the restaurant that also pays a B&O Tax.
• The same is true for the meat, cheese, lettuce, beans and other ingredients in the Burrito.
There are projections that as much as 20% of our purchases goes to the B&O tax. Now our dear state is trying to implement a personal income tax. Enough is enough.

There are only four states that have a GRT. Now let's compare the states that have GRT:
• Delaware: Retail can deduct $80,000 per month. Manufactures can deduct $1,000,000 per month.
• Kentucky: Business can choose between Gross Receipts and Gross Profits. Under $3M are exempt.
• Ohio: Business under $150,000 are exempt; those with receipts between $150,000 and$1M pay $150.
• Washington: The worst tax of all 4 GRT states. Business under $28,000 exempt

This is one of the most biased taxes and undemocratic taxes that exists. For example, the state cut the B&O Tax rating for Boeing went from .004235 to .002956 Let's take a look at these numbers for companies that do $500K in business :

Boeing use to pay $2,117 and pays $1,478. Small companies like myself that provide a service pay $7,500. The separate rates for each industry come from the nature of gross receipts taxation. It's not based on profit, so each industry's profitability and costs are constantly weighed by politicians who decide on rates and exemptions and credits. This is not a fair or logical formula for equitable taxation.

To compete in the global market and defend our country economically, we have to revive manufacturing and increase agriculture. It is unclear to me, why our state or any state for that matter would want to discourage capital investment by its business. This is not a good strategy for economic growth and development. My plan is to present legislation at the federal level that bans the Gross Sales Tax.

How many times have you been asked to contribute to a cause that is committed to helping you on a personal and financial basis? Together we will make a difference. Again, if you have any questions or concerns, please feel free to call.
Thank you for your time and consideration,