Chris0nllyn
Well-Known Member
No federal income tax, no alternative minimum tax, no corporate income taxes, no capital gains taxes, no payroll taxes (including Social Security and Medicare taxes), no gift taxes, and no estate taxes. No more IRS, and you'll get your entire paycheck (minus state taxes).
Instead, just a single, "National Consumption Tax" of 23%.
You would get taxed on what you spend, NOt what you earn. Making it an income neutral tax. Every household of lawful US residents would also get a monthly payment as an advance rebate, or "prebate", of tax on purchases up to the poverty level.
The rate would then be automatically adjusted annually based on federal receipts in the previous fiscal year. With the rebate taken into consideration, the FairTax would be progressive on consumption, but would also be regressive on income at higher income levels (as consumption falls as a percentage of income).
No corporate sales tax, and no more loop holes that are in place now allowing some companies to pay no taxes, while others pay high rates. With no moer red tape, and no more sales tax, companies would create many, many more AMERICAN jobs. Helping that, would be the 23% consumption tax on all imported goods.
Simplified taxes equal greater compliance, and less evasion. The Government Accountability Office (GAO), among others, have specifically identified the negative relationship between compliance costs and the number of focal points for collection. Under the FairTax, the federal government would be able to concentrate tax enforcement efforts on a single tax. Retailers would receive an administrative fee equal to the greater of $200 or 0.25% of the remitted tax as compensation for compliance costs. In addition, supporters state that the overwhelming majority of purchases occur in major retail outlets, which are very unlikely to evade the FairTax and risk losing their business licenses. Economic Census figures for 2002 show that 48.5% of merchandise sales are made by just 688 businesses ("Big-Box" retailers). 85.7% of all retail sales are made by 92,334 businesses, which is 3.6% of American companies. In the service sector, approximately 80% of sales are made by 1.2% of U.S. businesses.
The FairTax is a national tax, but can be administered by the states rather than a federal agency, which may have a bearing on compliance as the states' own agencies could monitor and audit businesses within that state. The 0.25% retained by the states amounts to $5 billion the states would have available for enforcement and administration. For example, California should receive over $500 million for enforcement and administration, which is more than the $327 million budget for the state's sales and excise taxes. Because the federal money paid to the states would be a percentage of the total revenue collected, John Linder claims the states would have an incentive to maximize collections. Proponents believe that states that choose to conform to the federal tax base would have advantages in enforcement, information sharing, and clear interstate revenue allocation rules. A study by the Beacon Hill Institute concluded that, on average, states could more than halve their sales tax rates and that state economies would benefit greatly from adopting a state-level FairTax.
FairTax - Wikipedia, the free encyclopedia
What is the FairTax | What is a Consumption Tax | Tax Reform Solutions - Americans For Fair Taxation
Instead, just a single, "National Consumption Tax" of 23%.
You would get taxed on what you spend, NOt what you earn. Making it an income neutral tax. Every household of lawful US residents would also get a monthly payment as an advance rebate, or "prebate", of tax on purchases up to the poverty level.
The rate would then be automatically adjusted annually based on federal receipts in the previous fiscal year. With the rebate taken into consideration, the FairTax would be progressive on consumption, but would also be regressive on income at higher income levels (as consumption falls as a percentage of income).
No corporate sales tax, and no more loop holes that are in place now allowing some companies to pay no taxes, while others pay high rates. With no moer red tape, and no more sales tax, companies would create many, many more AMERICAN jobs. Helping that, would be the 23% consumption tax on all imported goods.
Simplified taxes equal greater compliance, and less evasion. The Government Accountability Office (GAO), among others, have specifically identified the negative relationship between compliance costs and the number of focal points for collection. Under the FairTax, the federal government would be able to concentrate tax enforcement efforts on a single tax. Retailers would receive an administrative fee equal to the greater of $200 or 0.25% of the remitted tax as compensation for compliance costs. In addition, supporters state that the overwhelming majority of purchases occur in major retail outlets, which are very unlikely to evade the FairTax and risk losing their business licenses. Economic Census figures for 2002 show that 48.5% of merchandise sales are made by just 688 businesses ("Big-Box" retailers). 85.7% of all retail sales are made by 92,334 businesses, which is 3.6% of American companies. In the service sector, approximately 80% of sales are made by 1.2% of U.S. businesses.
The FairTax is a national tax, but can be administered by the states rather than a federal agency, which may have a bearing on compliance as the states' own agencies could monitor and audit businesses within that state. The 0.25% retained by the states amounts to $5 billion the states would have available for enforcement and administration. For example, California should receive over $500 million for enforcement and administration, which is more than the $327 million budget for the state's sales and excise taxes. Because the federal money paid to the states would be a percentage of the total revenue collected, John Linder claims the states would have an incentive to maximize collections. Proponents believe that states that choose to conform to the federal tax base would have advantages in enforcement, information sharing, and clear interstate revenue allocation rules. A study by the Beacon Hill Institute concluded that, on average, states could more than halve their sales tax rates and that state economies would benefit greatly from adopting a state-level FairTax.
FairTax - Wikipedia, the free encyclopedia
What is the FairTax | What is a Consumption Tax | Tax Reform Solutions - Americans For Fair Taxation
