(by 6 people)
The current Federal income tax system is broken. Patching up the existing code is pointless. It's time for a fresh approach, a fair approach.
The FairTax plan is a comprehensive proposal that replaces all federal income and payroll taxes with an integrated approach including a progressive national retail sales tax, a rebate to ensure no American pays federal taxes up to the poverty level, dollar-for-dollar revenue neutrality, and the repeal of the 16th Amendment. This non-partisan legislation (HR 25/S 25) abolishes all federal personal, gift, estate, capital gains, alternative minimum, Social Security, Medicare, self-employment, and corporate taxes and replaces them all with one simple, visible, federal retail sales tax - collected by existing state sales tax authorities.
The FairTax taxes us only on what we choose to spend, not on what we earn. It does not raise any more or less revenue; it is designed to be revenue neutral. So it is also cost neutral - the final cost for goods and services changes little under the FairTax.
The FairTax is a fair, efficient, transparent, and intelligent solution to the frustration and inequity of our current tax system.
Explore the resources here and decide if you want to become involved.
FairTax News
FairTax helps promote legal immigration
Under our current tax system, many non-citizens do not pay income and payroll taxes, even though they are here earning wages. They also may receive many benefits in the form of health care, education, roads, and much more. Under the FairTax, if someone is not a lawful resident but purchases goods or services for consumption here, not only do they pay the FairTax on each purchase, they are not eligible to receive a prebate to offset the taxes on their purchases up to the poverty level. In other words, they pay 100 percent of their sales tax, every time they buy. The only way to get a prebate and therefore not pay taxes on the purchase of essential goods and services is to become a legal resident.
So in effect, the FairTax helps promote legal immigration by insuring that only lawful residents receive the prebate.
The FairTax brings jobs back to America by allowing companies to operate on our soil tax free. Under the FairTax we will see an estimated 10 percent increase in GDP, more jobs, no one paying taxes up to poverty level consumption, an elimination of the payroll tax for all Americans, incentives for legal immigration, and the FairTax paid by every consumer.
Key elements of the FairTax proposal
- Americans take home their whole paychecks.
Not only do more Americans have jobs, but they also take home 100 percent of their paychecks (except where state income taxes apply). No federal income taxes or payroll taxes are withheld from paychecks, pensions, or Social Security checks. - No federal sales tax up to the poverty level means progressivity like today's tax system.
To ensure no American pays tax on necessities, the FairTax plan provides a prepaid, monthly rebate (prebate) for every registered household to cover the consumption tax spent on necessities up to the federal poverty level. This, along with several other features, is how the FairTax completely untaxes the poor, lowers the tax burden on most, while making the overall rate progressive. - No tax on used goods. The amount you pay to fund the government is totally visible.
With the FairTax you are only taxed once on any good or service; the sales tax is charged just as state sales taxes are today. If you choose to buy used goods - used car, used home, used appliances - you do not pay the FairTax. - Retail prices no longer hide corporate taxes or their compliance costs, which drive up costs for those who can least, afford to pay.
Hidden income taxes and the cost of complying with them currently make up 20 percent or more percent of all retail prices. With the FairTax, corporate taxation ends, competition drives prices down, more people in America have jobs, and retirement/pension funds see improved performance. - The income tax exports our jobs, rather than our products. The FairTax brings jobs home.
The FairTax does not burden U.S. exports the way the current income tax system does. The FairTax removes the cost of corporate taxes and compliance costs from the cost of U.S. exports, putting U.S. exports on a level playing field with foreign competitors. The dramatic lowering of compliance costs in comparison to other countries' value-added taxes also gives U.S. products at home a pricing advantage which foreign tax systems cannot match. - Revenue neutrality: Neither raise nor lower taxes so consumer costs remain stable.
The FairTax pays for all current government operations, including Social Security and Medicare. Government revenues are more stable and predictable than with the federal income tax because consumption is a more constant revenue base than is income. - Tax criminals - don't make criminals out of honest taxpayers.
Today, the IRS will admit to 25 percent noncompliance with the code - probably a conservative estimate. This does not take into account the criminal economy, which equally conservative estimates put at one trillion dollars of untaxed activity. The FairTax does tax this - criminals love to flash that cash at retail - while continuing to provide the federal penalties so effective in bringing such miscreants to justice.
Get the books
The FairTax Book
Amazon Price: $16.47 (as of 10/12/2008)
America's Best Kept Secret: Fairtax: Give Yourself a 25% Raise
Amazon Price: $22.45 (as of 10/12/2008)
The FairTax Book
Amazon Price: $15.73 (as of 10/12/2008)
Learn more
- Americans for Fair Taxation
- This is the grassroots organization that is promoting the FairTax. Here you will find a wealth of information, news, and resources.
- FairTax Volunteer
- Companion to the FairTax site, this is the headquarters for people interested in helping to promote the FairTax.
- Text of HR 25
- Text of the Fair Tax Act of 2003, from the Library of Congress THOMAS service.
- National Retail Sales Tax Alliance
- Another group promoting the FairTax.
