The FairTax replaces all Federal income-based taxation* with a single sales tax on all retail transactions above those needed to maintain a poverty-level lifestyle.
* includes Personal Income Taxes, Payroll Taxes, Social Security Taxes, Medicare Taxes, Corporate Income Taxes, Estate Taxes, Capital Gains Taxes, Self-Employment Taxes and dozens of others
FairTax Basic Rules:
To replace the current 60,000 page Tax Code and still fund the U.S. Government at its current far-too-bloated levels, there will be TWO (2) basic rules.
Rule 1: 23% of the cost of all new, retail products and services will go to the U.S. Treasury as a National Retail Sales Tax.
Rule 2: Every legal American citizen is supplied with funds
necessary to cover 23% of the published
That’s it ! ! !
What is NOT considered a retail purchase? Used items, businesses expenses, investment expenses, educational expenses and basically anything not CONSUMED by an individual consumer.
The main impact of this aspect of the FairTax is that YOU decide through your own choices when you pay Federal taxes, rather than the IRS confiscating 20 – 30% of your paycheck as under the current system. And everyone who decides to consume at the retail level pays this tax, whether they are poor or wealthy, an illegal alien, or a criminal.
The Fair Tax is FAR more progressive than the current system because every American is in effect forgiven the first 100% of all sales tax attributed to poverty-level spending.
Simple math guarantees that effective tax rates that now range from 15% to 35% will FALL DRAMATICALLY into a 0% to 23% range. Every American is treated the same. No loopholes, no special tax breaks.