How does the FairTax meet these wishes?
- The FairTax is easy to understand and to deal with. It is a 23% retail sales tax on all services and new goods. Used goods are not taxed. Savings and investments are not taxed. Secondary education and training while on the job are considered investments, so they are not taxed. The FairTax replaces the income, payroll, corporate, gift, estate, capital gains, and self-employment taxes. The only tax form you see is the receipt when you buy a service or something new. Only retailers will have a federal tax form. There will be one question on one page, "How much in dollars did you sell to a final consumer."
- The FairTax treats everyone the same. There are no exemptions, or loopholes.
- The FairTax is clear and is shown on every receipt. However, excise taxes and tariffs would still be embedded in the prices and not shown on the receipt.
- The FairTax is compassionate and progressive. If you have accumulated wealth but are income poor the rebate will cover the cost of the FairTax for you. Even if you have no accumulated wealth, the FairTax allows you to save for a home or a college education much more quickly than our current system. Again, the rebate would cover the cost of the FairTax for you. According to our research, a family of four would not begin to pay any federal taxes until they had spent $22,500. You could even make extra money with the FairTax system. By shopping wisely, buying used items, and perhaps growing some of your own food you could make extra money with the FairTax. The FairTax is progressive in nature because the more you spend, the more tax you pay.
- There is no reason for the FairTax to change. There will be no point in "Gucci Gulch" lobbying for special treatment for companies when their clients pay no taxes. The FairTax rate could go up for a national emergency, such as war. Americans for Fair Taxation's research shows that as the economy improves the rate will go down. It is important to remember that everyone will pay the FairTax so all consumers will see it on every receipt. A politician is going to have to convince a large number of Americans of the need to raise the FairTax. If a politician wishes to exempt some industry from the FairTax he will have to point out the increase in the amount of the FairTax because of the required shrinking of the tax base.
- The FairTax will place an extra almost $2 trillion into the pockets of American workers every year. This will allow them to save and invest in order to achieve the dreams they all have. They will be able to save for homes, or college, or retirement more quickly. Jobs will be abundant. Former head of the House Ways and Means Committee, Bill Archer, asked Princeton Econometrics to conduct a survey. The goal was to find out what 500 European and Asian companies would do if we enacted the FairTax here. The results were that 400 would build their next plant here. The other 100 said they would move their world headquarters here. The United States would become a sponge for the capital investors of the world.
