The FairTax Explained

A Truly 'Fair' Solution to Our Current Situation

By: Joe Miller | Guest Writer

Ever take home your paycheck and glance over those meaningless deductions your employer takes out week after week and wonder why? Why is the government withholding money that you rightfully earn? The government is taking your money and paying your tax liability before it’s even due. The Internal Revenue Service doesn’t trust you to pay your taxes on April 15th, so they take the money from your paycheck each week to pay the taxes. Consider if you had that money to invest, pay down debt, or even save! Well, my friends I’ve got a concept for you:

The FairTax plan is a comprehensive proposal that replaces all federal income- and payroll-based taxes with an integrated approach, including a progressive national retail sales tax, and a prebate to ensure no American pays federal taxes on spending up to the poverty level. The amount of the prebate each household will receive at the beginning of each month will be based on the poverty level which is determined by the US health and human services during that particular year and as well as how many people live in the household. The fair tax aims to remove taxes we pay on life’s necessities. The FairTax is dollar-for-dollar federal revenue neutral, meaning the FairTax isn’t designed to increase or reduce revenue for the governemnt and, through companion legislation will repeal of the 16th Amendment.

The FairTax Act (HR 25, S 1025) is nonpartisan legislation. It abolishes all federal personal and corporate income taxes, gift, estate, capital gains, alternative minimum, Social Security, Medicare, and self-employment taxes and replaces them with one simple, visible, federal retail sales tax administered primarily by existing state sales tax authorities.

The FairTax taxes us only on what we choose to spend on new goods or services, not on what we earn. The FairTax is a fair, efficient, transparent, and intelligent solution to the frustration and inequity of our current tax system.

The FairTax:
• Enables workers to keep their entire paychecks
• Enables retirees to keep their entire pensions
• Refunds in advance the tax on purchases of basic necessities
• Allows American products to compete fairly overseas
• Brings transparency and accountability to tax policy
• Ensures Social Security and Medicare funding
• Closes all loopholes and brings fairness to taxation
• Abolishes the IRS

Now that you’ve seen the nuts and bolts, you have a million questions, right? How? Why? When? Dude, isn’t that impossible? These answers are quite simple, like the FairTax. How-through education we inform American citizens there is a better way of taxation. There are research articles and in-depth FAQs on FairTax.org. Why-Because our current taxation system punishes those who work hard, get educated, and are motivated to succeed. When-Now seems like a good time. We’re in a recession, and the current plan to help repay the huge deficits is to raise taxes, not just on the evil “ultra rich,” but on those of us who are working hard to earn a decent wage. Dude, that’s impossible- Naw, bra, it’s not. “Is this the year to launch an overall reform of our tax codes, shouldn’t we just go ahead and scrap this thing? [our current system of taxation.],” said Senator Richard Burr (R-NC) in an interview with Curtis Wright, just a couple of weeks ago. “The FairTax is the number one vehicle that we’re looking at. It addresses our corporate taxes, it addresses our competiveness globally, and it addresses the predictability of what I’m going to pay.” This is from our senior Senator right here in North Carolina. So, bro, it’s not only possible - it’s probable.

There are many unintended benefits of the FairTax as well. People who are not currently paying taxes, like drug dealers and illegal immigrants, would now be paying taxes into the system because they would purchase things and be taxed at that point, instead of getting paid by their “employers” and not reporting it to the IRS. Also, the price of goods and services would decrease because companies that no longer have to pay corporate taxes would pass the savings on to the consumer. All the things we learn in economics stay the same: supply and demand, competitive markets, market share, and so on, but the FairTax puts everyone on even playing field via a much simpler way of taxation.

So, next time you get a paycheck, look at all the automatic deductions and ask yourself, “What could FairTax do for me?”

Joe Miller is Chairman of the Cape Fear FairTax and a local entrepreneur. More info about the FairTax can be found at www.CapeFearFairTax.com