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.
There are several crucial points to note:
-The FairTax concept is designed to be revenue neutral- the federal government will receive the same amount of revenue as it currently collects under the burdensome existing tax system -Despite the addition of the sales tax at the retail level, the elimination of the imbedded taxes will render the price of goods at the point of sale nearly the same -All American workers will see an increase in their take home pay- they will keep every penny they earn. -All American households will receive a 'prebate'- a monthly stipend equivalent to the tax expected to be paid on the basic neccesities of life. This ensures that the poorest Americans will never be taxed on basic neccesities.
The FairTax concept is eloquently discussed by Neal Boortz and Congressman John Linder in their new "FairTax Book." It includes not only a through discussion of the plan, but a history of taxes in America.
This community is open to all polite discussion of this bill. Please keep it civil, on topic, and honest.