Not to be confused with Illinois Fair Tax or Fairtex.
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FairTax is a single rate tax proposal which has been proposed as a bill in the United States Congress regularly since 2005 that includes complete dismantling of the Internal Revenue Service.[1] The proposal would eliminate all federal income taxes (including the alternative minimum tax, corporate income taxes, and capital gains taxes), payroll taxes (including Social Security and Medicare taxes), gift taxes, and estate taxes, replacing them with a single consumption tax on retail sales.
The proposed Fair Tax Act (H.R. 25/S. 18) would apply a tax, once, at the point of purchase on all new goods and services for personal consumption. The proposal also specified a monthly welfare payment for low-income earners to offset the regressive tax impact. This was styled by advocates as an "advance rebate", or "prebate", of tax on purchases up to the poverty level.[2][3] First introduced into the United States Congress in 1999, a number of congressional committees have heard testimony on the bill; however, it did not move from committee. A campaign in 2005 for the FairTax proposal[4] involved Leo E. Linbeck and the Fairtax.org. Talk radio personality Neal Boortz and Georgia Congressman John Linder published The FairTax Book in 2005 and additional visibility was gained in the 2008 presidential campaign.
As defined in the proposed legislation, the initial sales tax rate is 30% (i.e. a purchase of $100 would incur a sales tax of $30, resulting in a total price to the consumer of $130). Advocates promote this as a 23% tax inclusive rate based on the total amount paid including the tax, which is the method currently used to calculate income tax liability.[5] In subsequent years the rate could adjust annually based on federal receipts in the previous fiscal year.[6] With the rebate taken into consideration, the FairTax would be progressive on consumption,[3] but would still be regressive on income (since consumption as a percentage of income falls at higher income levels).[7][8] Opponents argue this would accordingly decrease the tax burden on high-income earners and increase it on the lower class earners.[5][9] Supporters contend that the plan would effectively tax wealth, increase purchasing power[10][11] and decrease tax burdens by broadening the tax base.
Advocates expect a consumption tax to increase savings and investment, ease tax compliance and increase economic growth, increase incentives for international business to locate in the US and increase US competitiveness in international trade.[12][13][14] The plan would provide transparency for funding the federal government. Supporters believe it would increase civil liberties, benefit the environment, and effectively tax illegal activity and undocumented immigrants.[12][15] Critics contend that a consumption tax of this size would be extremely difficult to collect, would lead to pervasive tax evasion,[5][7] and raise less revenue than the current tax system, leading to an increased budget deficit.[5][16] The proposed Fairtax might cause removal of tax deduction incentives, transition effects on after-tax savings, incentives on credit use and the loss of tax advantages to state and local bonds. It also includes a sunset clause if the 16th Amendment to the US Constitution is not repealed within seven years of its enactment.
^https://fairtax.org/faq FAQ:Is there any provision in the FAIRtax bill to prevent both an income tax and a sales tax?
^Cite error: The named reference billc3 was invoked but never defined (see the help page).
^ abKotlikoff, 2005
^Linbeck statement, 2005
^ abcdRegnier, 2005
^Fair Tax Act, 2009, Chapter 1
^ abGale, 1998
^Cite error: The named reference BHItaxburden was invoked but never defined (see the help page).
move from committee. A campaign in 2005 for the FairTax proposal involved Leo E. Linbeck and the Fairtax.org. Talk radio personality Neal Boortz and Georgia...
the Wayback Machine, also known as the FairTax Act, which Linder sponsored. They released a follow-up book FairTax: The Truth in 2008. Linder first introduced...
co-wrote The FairTax Book with Congressman John Linder, proposing to implement a variant of a national retail sales tax in lieu of other federal taxes. Boortz's...
Fair Taxation (AFFT), also known as FairTax.org, is a U.S. political advocacy group based in Clearwater, Florida that is dedicated to fundamental tax...
The FairTax Book is a non-fiction book by libertarian radio talk show host Neal Boortz and Congressman John Linder, published on August 2, 2005, as a...
tax and monthly tax rebate to households of citizens and legal resident aliens. The tax proposal is named FairTax. In Canada, the federal sales tax is...
the proposed FairTax in the United States. A flat tax system and income taxes overall are not inherently border-adjustable; meaning the tax component embedded...
In the United States, the estate tax is a federal tax on the transfer of the estate of a person who dies. The tax applies to property that is transferred...
FairTax was a proposed amendment to the Illinois state constitution that would have effectively changed the state income tax system from a flat tax to...
the FairTax Mark? - FairTax Mark". Scott, Craig (20 February 2014). "FairTax Mark to reward tax justice" – via The Guardian. "Open about tax". "Expatriation...
consumption tax and various flat tax proposals on personal incomes. Excess burden of taxation FairTax Flat tax Geolibertarianism Georgism Land value tax List...
neutrality of the FairTax, meaning they ought not result in more tax or less being collected. Georgism claims that various forms of land tax can both deal...
the same item. FairTax, a proposed federal sales tax, intended to replace the US federal income tax. Turnover tax, similar to a sales tax, but applied to...
income tax collected by the United States, most individual U.S. states collect a state income tax. Some local governments also impose an income tax, often...
based on the fair market value of property. School and other authorities are often separately governed, and impose separate taxes. Property tax is generally...
criticized the FairTax proposal as misleading and unlikely to simplify taxpaying. Bartlett was especially critical of what he states are FairTax's accounting...
nearly always computed as the fair market value of the property, multiplied by an assessment ratio, multiplied by a tax rate, and is generally an obligation...
the United States US State taxes: Sales taxes in the United States State income tax State tax levels Politics: FairTaxTax protester (United States) General:...
The FairTax Mark is an independent accreditation awarded by the FairTax Foundation after an assessment based on "Transparency [and] tax rate, disclosure...
consumption. However, the Fairtax would also eliminate the EITC and CTC, dramatically reducing this benefit. Additionally the FairTax would be applied to goods...
size) as an advance rebate of tax on purchases up to the poverty level. The impact of the FairTax on the distribution of the tax burden is a point of dispute...
treated equally by the tax system, whether they choose to spend now or save to increase their future spending power." FairTax Income tax in the United States...
Tuerck, David G. (November 2006). "Taxing Sales under the FairTax – What Rate Works?" (PDF). Beacon Hill Institute. Tax Analysts. Archived from the original...
family size) as an advance rebate of tax on purchases up to the poverty level. A key question surrounding the FairTax rate is the ability to be revenue-neutral;...
the tax must not discriminate against interstate commerce, the tax must be fairly apportioned, and there must be a fair relationship of the tax to services...
Regnier, Pat (2005-09-07). "Just how fair is the FairTax?". Money Magazine. Retrieved 2006-07-20. "Greenspan: Consumption Tax Could Help Economy". Fox News....
such taxes include: FairTax (U.S.A.), a proposal to replace most existing nationally levied taxes with a single retail sales tax nationally levied consumer...
forms for taxpayers and tax-exempt organizations to report financial information, such as to report income, calculate taxes to be paid to the federal...
Money, Debt, and Taxes in the Constitutional Era, 1776–1836 (1998) excerpt and text search Thorndike, Joseph J. Their Fair Share: Taxing the Rich in the...
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