Replace The Federal Income Tax
Have you ever been fed up with unfair tax laws and high tax rates...tax loopholes...being taxed twice for saving...taxes that are too complicated...or an IRS that can ruin your life even if you do nothing wrong? You're not alone.
Millions of Americans agree its time to reform our out-of-state tax laws. Can we have a tax system that's fair, with no tax loopholes? One that makes it easier for you to save for a new home, college or retirement? One with no tax forms, record keeping, or personal tax filing?
With the Fair Tax, the answer is yes.
The Fair Tax is a sensible, nonpartisan plan that would replace all income taxes, payroll taxes, self-employment taxes, capital gains taxes, death taxes and hidden corporate taxes.
The Fair Tax replaces these complicated and unfair taxes with a perfect retail sales tax. Unlike the sales tax you know, the Fair Tax has a tax refund system so that no American family pays taxes on the purchase of necessities.
Because you keep your entire paycheck or pension, you'd have more money to spend, save and invest. That would help your family while helping the economy create new and better jobs.
Consider the many advantages of the Fair Tax:
A Tax that Gives You More Choices. You get to keep your whole paycheck or pension. No federal taxes withheld at all. That gives you more money to save and invest for buying a new home, paying for college, and putting away for retirement. You decide when you pay your federal tax by choosing when, what, and how much to buy.
A Simple Tax that Cuts Waste. Taxes are so complicated that in a 1998 Money Magazine test, 46 experts gave 46 different answers - all wrong. The Fair Tax is simple; everyone understands a sales tax. Billions of dollars now spent on tax lawyers and accountants would no longer be wasted on efforts to cut tax bills or understand taxes.
Loopholes Will Disappear. Politicians have filled the tax code with loopholes to benefit lobbyists and special interests. The Fair Tax closes all loopholes and makes it more difficult to create new ones. Everyone would pay his or her fair share.
It Helps Seniors. There would be no taxes on your pension and no taxes on income from retirement savings. Social Security benefits would no longer be taxed. Dedicated sales tax revenues would fund Social Security and Medicare, which would be a safer source of funding than the current payroll income tax. Death taxes would be eliminated so that what we build during our lives can be passed on to the next generation instead of sold to pay taxes.
No IRS and No Individual Tax Filings. The Fair Tax would put an end to the IRS and to all individual tax returns, tax audits, and tax frustration - making April 15th just another day. Bureaucrats would never again know how much money you make or snoop into your finances.
We spend an estimated $225 billion each year to measure, track, shelter, document, file and collect income taxes. That's nearly $850.00 for every man, woman, and child. The Fair Tax would slash those costs by up to 90%.
No Tax on Necessities. The Fair Tax would give every family a tax rebate at the beginning of each month. The rebate would be $308.00 per month for a family of four. With the rebate, no American would pay taxes on the purchase of basic necessities. The poor and those who get only Social Security would pay no tax at all.
The Lowest Tax Rate. The Fair Tax replaces all the revenue from all current income and payroll taxes with a rate of just 23% on new goods and services. Some people think that's too high. But most people are in much higher tax brackets today; it's just hidden from view. Even the lowest income tax bracket is 15% and all workers pay almost 8% in payroll taxes. That's 23% right there. And the second lowest income tax rate is 28%.
You may also pay taxes on hidden in the prices of everything you buy, and these taxes cost you up to 20% of the price. The Fair Tax abolishes all these hidden taxes.
Other tax reform plans claim to have lower rates, but keep payroll taxes of over 15% and actually increase the federal taxes hidden in the prices of things you buy. When you count all taxes, no tax plan has a lower rate than the Fair Tax.
Under the current system, a couple earning $30,000.00 pay $2,295.00 in payroll taxes and $2,625.00 in income taxes for a total of $4,920.00. When you count the hidden payroll tax they pay, the total soars to $7,215.00. That's 24% of their income in taxes. Under the Fair Tax, that couple would receive a rebate of $2,440.00. If they spend every penny they earn, their sales tax bill (including the rebate) would be $4,460.00 or just 14.9%. It would be even less if they save any of their income.
An Honest, Visible Tax. Under today's tax system, many taxpayers pay more in hidden taxes then they do in taxes out of their paychecks. The Fair Tax would show the true cost of government to all Americans, even children, with every purchase on every receipt. That would bring much-needed accountability and understanding of taxation to all citizens.
Prices Won't Soar. Today, federal taxes and compliance costs are hidden in the prices of everything we buy - from clothing to healthcare. When those hidden costs are eliminated, the retail price consequences of a 23% federal sales tax are dramatically reduced. Americans will pay about the same price for many goods and services as they do today, even when you include the sales tax. Dr. Dale Jorgenson, Chairman of the Economics Department at Harvard University, projects an average wholesale price reduction of 20% after adoption of the Fair Tax. Don't forget that you'd have 100% of your paycheck or pension in your pocket - plus a monthly tax rebate.
More and Better Paying Jobs. Economists estimate that our current tax system's high tax rates, waste and inefficiency cost the typical family about $5,000.00 every year in lost income.
The Fair Tax's low rate and elimination of tax penalty on investment would generate more economic growth - creating more and higher paying jobs - and raise the standard of living for all Americans.
The Fair Tax would dramatically reduce American manufacturing costs. As the cost of doing business falls here, more U.S. and foreign companies will locate their facilities in the USA - bringing jobs and investment to our own shores for a change. Investment in people (education and training) would not be taxed.
Constitutional Protection for Taxpayers. The Fair Tax plan includes a proposed constitutional amendment to ban congress from taxing income. This would eliminate the possibility of Americans paying both sales taxes and income taxes and ensure the Fair Tax is a permanent replacement for our current tax system.
A Boost for American Exports. Our
tax laws put American firms at an unfair disadvantage in world competition.
While most of the toughest competitors give tax rebates on exports, American
goods are shipped around the world with our costly tax system built into the
prices. Under the Fair Tax, American and imported goods would pay the same
tax when they are sold here. The Fair Tax stops job-killing taxes on our exports
and makes American products more competitive here and around the world. Exports
For more information on the Fair Tax you can write:
Americans For Fair Taxation
P.O. Box 272429
Houston, Texas 77277-9921