The FairTax - How to Make Paying Taxes Easy and Fair

Are you ready for tax reform? Are you ready to choose how much you'll pay in taxes? That time could be drawing very near, at least if H.R.25, the FairTax, continues to gain support with the tax-paying American public, and if those same supporters insist that their representatives in Congress support it, too.

What the FairTax Will Do.
1. Repeal all corporate and individual income taxes, self-employment taxes, payroll taxes, capital gains, estate, and gift taxes.
2. Replace the above taxes with a revenue-neutral consumption tax.
3. Rebate (actually pre-bate) the sales taxes on all spending up to the poverty level.

That's basically it. Sound too simple? It is simple. In fact, the FairTax is only 132 pages long. Contrast that with the more than 50,000 pages of tax laws and regulations in effect today and I think you'll agree that it really is rather simple.

What's fair about the FairTax? First, the FairTax will allow you to keep 100 percent of your paycheck, your pension, your Social Security income. Because taxes on corporations will be repealed, the cost of consumer goods and services will be dramatically reduced, from 20 to 30 percent. Compliance cost, the cost to collect taxes and enforce tax law, will be reduced by 90 percent. Real wages will increase. Investments will increase, interest rates will drop dramatically, and the economy will grow by leaps and bounds as a result!

So, then, how do I actually pay my taxes? The FairTax is a consumption tax, meaning that you only pay tax when you consume, or purchase, new goods and services. You'll think you're paying a whopper of a sales tax, but the cost of the product or service will be lower in the first place and the tax rate will still be lower than standard income tax rates, so you'll be paying less tax overall. And the best part is that you can choose to pay less tax by choosing to spend less money.

But I have to feed my family and I need to buy a new car. What's so fair about paying taxes on those things? That's exactly where the fair part comes in. First, if your income is on the low end, you will probably choose hamburger instead of steak or a Ford instead of a Mercedes. People in the higher income brackets will buy the expensive cuts of meat and the fancy cars and they'll pay the same rate of sales tax that you paid - the same rate but on a lot more money - which will result in a much larger amount of tax paid. And then there's the "prebate," the other element in the FairTax equation that makes it truly fair.

Yes, what is that you mentioned about the poverty level and rebates? Since everyone needs to purchase basic necessities, all families will receive, every month, a "prebate" check to cover the tax on the basic necessities, the amount for items that everyone has to have, based on the poverty level spending figure calculated by the government. It sounds a little complicated, but this paper lays it all out with a diagram and an explanation that makes sense.

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This site is an introduction to the FairTax and we have lots of resources listed below, including ways you can help spread the word.

We highly recommend The FairTax Book as the most comprehensive resource you'll find to further educate yourself and answer the questions you or your friends - or your congressman - may have about the FairTax.

Already know all about the FairTax? Buy a few copies of the book and spread them around!

The FairTax Book by Neal Boortz and Congressman John Linder

Click to order this FairTax t-shirt and to see other FairTax promotional items.

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Learn more about the FairTax. View this brand new Fair Tax Internet Seminar presented by Neal Boortz in the comfort of your own home or office.

Download the free FairTax webinar here.

The president believes the plan needs more study, which likely means he hasn't studied the studies that have already been done. If he had, he may actually have an official stand on the issue.

Wonder how the Obama tax plan compares with the FairTax? Study this comparison chart of the current tax system, Obama's tax plan, and the FairTax to see for yourself.

Photo courtesy piddleee via Creative Commons

Is the FairTax a fair tax? Find out with the FairTax Calculator.

It takes just a few minutes to plug in your own figures and see how you and your family would fare if you paid the 23% FairTax on purchases of new items instead of filing a typical income tax return and paying taxes the traditional way. I tried it and our household came out far ahead.

Take a minute and try the FairTax Calculator and if you like what you see, tell your friends and encourage them to read the FairTax books.

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