Conservapedia - User contributions [en]

FairTax

2009-06-24T15:01:23Z

Jeffg2: wikilinks

[[Image:FairTaxRally.jpg|thumb|350px|A pro FairTax rally in Florida]]
The '''FairTax''' is a tax proposal that would replace all federal [[income tax]]es — including corporate, gift, estate, capital gains, alternative minimum, [[Social Security]], [[Medicare]], and self employment taxes — with a federal national retail [[sales tax]] on personal consumption. The tax would be paid on the purchase of all new goods and services, and would be collected at the final point of sale.<ref> Americans For Fair Taxation, “About the FairTax,” http://www.fairtax.org/site/PageServer?pagename=about_main</ref> Thus, instead of taxing "income", the FairTax would tax spending. This is known as a [[consumption tax]] — a method for taxing income on the back end, when the money is spent, rather than when it is earned.

A consumption tax would have a positive effect on [[Savings rate|savings]] and [[investment]].<ref>{{cite news| url=http://online.wsj.com/article/SB112492381500022421.html| title=A Consumption Tax| work=The Wall Street Journal| last=Auerbach| first=Alan J| date=2005-08-25| accessdate=2008-02-05}}</ref> Supporters state the plan would ease tax compliance, increase economic growth, have incentives for international business to locate in the U.S., and increase U.S. competitiveness in [[Trading|international trade]].<ref>{{cite book| first=Neal| last=Boortz| coauthors=Linder, John| year=2006| title=The FairTax Book| edition=Paperback| publisher=Regan Books| isbn=0-06-087549-6}}</ref> The rate for the FairTax as proposed under current legislation is 23 percent of the total payment including the tax ($23 of every $100 spent in total—calculated similar to income taxes).<ref> "Embedded Taxes Change Fair Tax Analysis",http://www.roanoke.com/editorials/commentary/wb/wb/xp-51569</ref> This would be equivalent to a 30 percent traditional sales tax ($23 on top of every $77 spent—$100 total). Although some critics say it would be higher to be revenue neutral (take in the same amount as the current system).<ref> http://www.factcheck.org/taxes/unspinning_the_fairtax.html</ref> The effective tax rate for a family household would be variable due to the fixed monthly tax rebates.

The proposal includes monthly payments to all family households of lawful U.S. residents as an advance rebate, or 'prebate', of tax on purchases up to the [[poverty level]]. The rebate is meant to eliminate the taxation of household [[necessities]] and make the plan progressive. Used goods, [[exports]], and intermediate business transactions would not be taxed, nor would savings, investments, or [[education]] tuition expenses as they would be considered an investment (rather than final consumption). The tax is voluntary to the extent that individual consumers can choose when to increase or decrease their product buying, unlike now, when income taxes are [[Withholding|withheld]] from the paychecks of most workers.

==Proposal==
If passed, the Fair Tax would accomplish the following:<ref> American For Fair Taxation, http://www.fairtax.org/site/PageServer?pagename=about_main</ref>

* Abolish the [[Internal Revenue Service]] (IRS).
* Abolish personal and business [[income tax]]es and replace it with a national retail sales tax.
* Repeal of the [[16th Amendment]] through companion legislation.
* Provide each worker a monthly prebate, equal to the tax on "poverty level" income.<ref> Just how fair is the ‘Fair Tax’ CNN Money, September 2005, http://money.cnn.com/2005/09/06/pf/taxes/consumptiontax_0510/</ref>
* Close many loopholes under the current system.
* Enable retirees to receive their full pension, untaxed, until they spend it.
* Enable workers to keep their entire paycheck, untaxed, until they spend it. 
* Proponents believe the removal of the above will save 265 billion dollars a year in compliance costs under the current tax system,<ref>http://www.fairtax.org/site/PageServer?pagename=about_fairtax_four#neutral</ref> and be more practical than the current system, which includes over 60,000 pages of tax code.<ref> 67,204-Page Code Confounds Taxpayers, Yet Congress Sits By, USA Today, http://www.usatoday.com/news/opinion/2007-04-03-edit_N.htm?csp=34 </ref>

==History==

===1994-2005===
[[Image:FairTax vs. Tax Code 2.jpg‎ |thumb|300px|Congressman [[John Linder]], one of the strongest proponents for the FairTax, illustrates the size of the current tax system vs the FairTax method]]
The origins of the FairTax began with a group of businessmen from Houston, Texas, who initially financed what has become the political advocacy group Americans For Fair Taxation (AFFT) or FairTax.org, which has grown into a large grassroots tax reform movement.<ref> Just how fair is the ‘FairTax’ CNN Money, September 2005, http://money.cnn.com/2005/09/06/pf/taxes/consumptiontax_0510/</ref>. The Chairman of AFFT, Leo Linbeck, stated that Americans have to pressure the government to come up with a better way of taxation, he said, “It is painfully obvious that [[Washington, D.C.]] insiders so closely linked with the status quo cannot be trusted to overturn the corrupt system of federal taxation. This effort will have to be driven by the American people<ref>Americans For Fair Taxation http://boortz.com/nuze/200510/10132005.html</ref>." The organization hired experts to look into an idea for a better tax system, they spent 23 million dollars in coming up with the idea of the Fair Tax. Their findings were combined into a book, “The FairTax Book: Saying Goodbye to the Income Tax and the IRS,” which Linbeck co-authored with Republican Congressman John Linder<ref> “The Fair Tax Book”,2005, http://www.amazon.com/Fair-Tax-Book-Saying-Goodbye/dp/0060875496/ref=sr_1_1/102-3275846-3467353?ie=UTF8&s=books&qid=1184106196&sr=1-1</ref>.

The FairTax became popular among free market [[conservative]]s, [[libertarian]]s, and some economists in recent years. The complication and wasted bureaucracy of the [[Internal Revenue Service]], government pressure on citizens to reveal information and records, and the loopholes in the current tax system created the incentive to look for a new way of taxation in the United States. Some [[Democrats]] also sought a tax system that would rid them current income tax, which they claim to be discriminate.

In the last 20 years the [[United States]] tax system has been changed over 14,000 times, this has led to an abundance of complexities which lead to its being an inefficient system. In 2003, United States Senator [[Saxby Chambliss]], a [[Republican]], and Senator [[Zell Miller]] a Democrat; introduced a by-partisan version of the Fair Tax. Although the bill had some support in the [[Senate]], it eventually lost in a 50-50. Senator [[Sam Brownback]] later stated the challenges of tax reform, “When you take (the tax code) on straight on, you take on every lobbyist,"

===2005-2007===

Former Federal Reserve Chairman, [[Alan Greenspan]], called for a federal sales tax to replace the broken income tax in 2005. "Since the exemplary 1986 reform, the tax code has drifted back to be overly complicated and burdened by higher marginal rates and by many special provisions that have undesirably narrowed the tax base," Greenspan stated at a Presidential Advisory counsel<ref>Greenspan: "Consumption Tax COuld Help Economy",http://www.foxnews.com/story/0,2933,149298,00.html</ref>.

In 2005 congress created a bill to enact the FairTax (H.R. 25; Senate Bill 1943), it had the support of more then 54 co-sponsors, and both Senate and House minority leaders [[Dennis Hassert]] and [[Tom DeLay]]<ref>“The FairTax: A Trogan Horse For America,” Jews For Preservation of Firearms Ownership, http://www.jpfo.org/fairtax.htm#fn1</ref>. Although the bill received the most support ever for any fundamental tax reform bill, it failed to pass. After the elections of 2004, Georgia Republican Congressman, [[John Linder]], reintroduced the FairTax on the first day of the 109th congress<ref> “Linder Reintroduces FairTax Legislation”, http://www.johnlinder.com/News_Details.asp?NewsID=128</ref>. Congressman Linder stated before congress, “The time is ripe for fundamental tax and a completely new Federal tax regime. I am pleased to reintroduce my Fair Tax proposal today reform, and look forward to the Congress creating a fairer, simpler tax system that advances our core goals of lower taxes and more freedom for our citizens."<ref> “Linder Reintroduces FairTax Legislation”, http://www.johnlinder.com/News_Details.asp?NewsID=128</ref>.”

In 2007 support for the FairTax bill grew to include 60 co-sponsors<ref>FairTax Gains Support, http://www.fairtaxblog.com/20070508/record-sixty-co-sponsors-for-fairtax-bill-hr-25/</ref>.

One of the most outspoken supporters of the Fair Tax is Republican presidential candidate, [[Mike Huckabee]]. Huckabee has said that the Fair Tax would "put the IRS out of business, but put Americans in business<ref> Massachusetts For Mike Huckabee, http://massachusettsforhuckabee.blogspot.com/search/label/Tax%20Plan</ref>." 

== Supporters and Opponents==

[[Image:Fairtaxb.jpg|right|thumb|200px| A FairTax bus during a rally at the 2007 [[Republican]] [[Iowa Straw Poll]].]]
Most of the support for the FairTax comes from the [[Republican Party]] and the [[Libertarian]]s. A significant number of [[Conservative]]s want Republican presidential candidates to support the FairTax, including one Indiana group called ‘Hoosiers for Fair Taxation’<ref>”FairTax Supporters Vent Frustration”, June 2007, http://www.theindychannel.com/news/13651607/detail.html</ref>. <ref>”FairTaxer's continue to “flex their muscles”, July 2007, http://www.fairtax.org/site/PageServer?pagename=news_feature</ref>. Nevertheless, while the number of the members of Congress who have signed on to the proposal has been growing, it still lacks popular support to be close to passage. Former Arkansas governor and presidential candidate [[Mike Huckabee]] made passage of a national sales tax a part of his platform during his recent bid for office. Former Federal Reserve chief [[Alan Greenspan]] also exhibited support for the FairTax in a recent interview.<ref>Greenspan: Consumption Tax could Help Economy, Fox News, March 2005, http://www.foxnews.com/story/0,2933,149298,00.html</ref>

Of the 2008 Democrat presidential candidates, only Mike Gravel supported the plan. [[Rudy Giuliani]], a one time candidate for President on the Republican side, was hesitant and did not support it.<ref> “Giuliani Jeered For Opposing Flat Tax”, Associated Press, July 2007, http://www.forbes.com/feeds/ap/2007/07/07/ap3891710.html</ref>: "I don't think a Fair Tax is realistic change for America. Our economy is dependent upon the way our tax system operates<ref> “Giuliani Jeered For Opposing Flat Tax”, Associated Press, July 2007, http://www.forbes.com/feeds/ap/2007/07/07/ap3891710.html</ref>

==Criticism==

*Critics contend that the FairTax would have Constitutional issues.

*The FairTax would still have tax evasion. Purchases made overseas, although subject to the tax and collected by the U.S. Customs and Border Protection, would be difficult to track and therefore cheating might occur, much as it does now under the current system.

*A greater dependence on second-hand goods might occur, since they are exempt, and therefore alter the spending habits of the U.S. consumer.

*There is no cap on the rate that might be imposed by Congress. Just as current income tax rates change, the initial rate of 23% may be changed over time as Congress desires. However, since there is one rate, it would be difficult to engage in class warfare and pit one economic group against another — Congress would raise or lower the rate on everyone. Every citizen has an interest in keeping the rate low.

*It is argued that the FairTax would benefit the high income earners at the expense of the middle class.

==External Links==

*[http://www.fairtax.org/site/PageServer Americans for Fair Taxation]
*[http://www.factcheck.org/taxes/unspinning_the_fairtax.htm FactCheck.org]
 

==References==
<references/>

[[Category: Taxation]]
[[Category: Economics]]

FairTax

2009-06-24T12:58:58Z

Jeffg2: Restated the benefits of a consumption tax

[[Image:FairTaxRally.jpg|thumb|350px|A pro FairTax rally in Florida]]
The '''FairTax''' is a tax proposal that would replace all federal [[income tax]]es — including corporate, gift, estate, capital gains, alternative minimum, [[Social Security]], [[Medicare]], and self employment taxes — with a federal national retail [[sales tax]] on personal consumption. The tax would be paid on the purchase of all new goods and services, and would be collected at the final point of sale.<ref> Americans For Fair Taxation, “About the FairTax,” http://www.fairtax.org/site/PageServer?pagename=about_main</ref> Thus, instead of taxing "income", the FairTax would tax spending. This is known as a [[consumption tax]] — a method for taxing income on the back end, when the money is spent, rather than when it is earned.

A consumption tax would have a positive effect on savings and investment.<ref>{{cite news| url=http://online.wsj.com/article/SB112492381500022421.html| title=A Consumption Tax| work=The Wall Street Journal| last=Auerbach| first=Alan J| date=2005-08-25| accessdate=2008-02-05}}</ref> Supporters state the plan would ease tax compliance, increase economic growth, have incentives for international business to locate in the U.S., and increase U.S. competitiveness in international trade.<ref>{{cite book| first=Neal| last=Boortz| coauthors=Linder, John| year=2006| title=The FairTax Book| edition=Paperback| publisher=Regan Books| isbn=0-06-087549-6}}</ref> The rate for the FairTax as proposed under current legislation is 23 percent of the total payment including the tax ($23 of every $100 spent in total—calculated similar to income taxes).<ref> "Embedded Taxes Change Fair Tax Analysis",http://www.roanoke.com/editorials/commentary/wb/wb/xp-51569</ref> This would be equivalent to a 30 percent traditional sales tax ($23 on top of every $77 spent—$100 total). Although some critics say it would be higher to be revenue neutral (take in the same amount as the current system).<ref> http://www.factcheck.org/taxes/unspinning_the_fairtax.html</ref> The effective tax rate for a family household would be variable due to the fixed monthly tax rebates.

The proposal includes monthly payments to all family households of lawful U.S. residents as an advance rebate, or 'prebate', of tax on purchases up to the poverty level. The rebate is meant to eliminate the taxation of household necessities and make the plan progressive. Used goods, exports, and intermediate business transactions would not be taxed, nor would savings, investments, or education tuition expenses as they would be considered an investment (rather than final consumption). The tax is voluntary to the extent that individual consumers can choose when to increase or decrease their product buying, unlike now, when income taxes are withheld from the paychecks of most workers.

==Proposal==
If passed, the Fair Tax would accomplish the following:<ref> American For Fair Taxation, http://www.fairtax.org/site/PageServer?pagename=about_main</ref>

* Abolish the [[Internal Revenue Service]] (IRS).
* Abolish personal and business [[income tax]]es and replace it with a national retail sales tax.
* Repeal of the [[16th Amendment]] through companion legislation.
* Provide each worker a monthly prebate, equal to the tax on "poverty level" income.<ref> Just how fair is the ‘Fair Tax’ CNN Money, September 2005, http://money.cnn.com/2005/09/06/pf/taxes/consumptiontax_0510/</ref>
* Close many loopholes under the current system.
* Enable retirees to receive their full pension, untaxed, until they spend it.
* Enable workers to keep their entire paycheck, untaxed, until they spend it. 
* Proponents believe the removal of the above will save 265 billion dollars a year in compliance costs under the current tax system,<ref>http://www.fairtax.org/site/PageServer?pagename=about_fairtax_four#neutral</ref> and be more practical than the current system, which includes over 60,000 pages of tax code.<ref> 67,204-Page Code Confounds Taxpayers, Yet Congress Sits By, USA Today, http://www.usatoday.com/news/opinion/2007-04-03-edit_N.htm?csp=34 </ref>

==History==

===1994-2005===
[[Image:FairTax vs. Tax Code 2.jpg‎ |thumb|300px|Congressman [[John Linder]], one of the strongest proponents for the FairTax, illustrates the size of the current tax system vs the FairTax method]]
The origins of the FairTax began with a group of businessmen from Houston, Texas, who initially financed what has become the political advocacy group Americans For Fair Taxation (AFFT) or FairTax.org, which has grown into a large grassroots tax reform movement.<ref> Just how fair is the ‘FairTax’ CNN Money, September 2005, http://money.cnn.com/2005/09/06/pf/taxes/consumptiontax_0510/</ref>. The Chairman of AFFT, Leo Linbeck, stated that Americans have to pressure the government to come up with a better way of taxation, he said, “It is painfully obvious that [[Washington, D.C.]] insiders so closely linked with the status quo cannot be trusted to overturn the corrupt system of federal taxation. This effort will have to be driven by the American people<ref>Americans For Fair Taxation http://boortz.com/nuze/200510/10132005.html</ref>." The organization hired experts to look into an idea for a better tax system, they spent 23 million dollars in coming up with the idea of the Fair Tax. Their findings were combined into a book, “The FairTax Book: Saying Goodbye to the Income Tax and the IRS,” which Linbeck co-authored with Republican Congressman John Linder<ref> “The Fair Tax Book”,2005, http://www.amazon.com/Fair-Tax-Book-Saying-Goodbye/dp/0060875496/ref=sr_1_1/102-3275846-3467353?ie=UTF8&s=books&qid=1184106196&sr=1-1</ref>.

The FairTax became popular among free market [[conservative]]s, [[libertarian]]s, and some economists in recent years. The complication and wasted bureaucracy of the [[Internal Revenue Service]], government pressure on citizens to reveal information and records, and the loopholes in the current tax system created the incentive to look for a new way of taxation in the United States. Some [[Democrats]] also sought a tax system that would rid them current income tax, which they claim to be discriminate.

In the last 20 years the [[United States]] tax system has been changed over 14,000 times, this has led to an abundance of complexities which lead to its being an inefficient system. In 2003, United States Senator [[Saxby Chambliss]], a [[Republican]], and Senator [[Zell Miller]] a Democrat; introduced a by-partisan version of the Fair Tax. Although the bill had some support in the [[Senate]], it eventually lost in a 50-50. Senator [[Sam Brownback]] later stated the challenges of tax reform, “When you take (the tax code) on straight on, you take on every lobbyist,"

===2005-2007===

Former Federal Reserve Chairman, [[Alan Greenspan]], called for a federal sales tax to replace the broken income tax in 2005. "Since the exemplary 1986 reform, the tax code has drifted back to be overly complicated and burdened by higher marginal rates and by many special provisions that have undesirably narrowed the tax base," Greenspan stated at a Presidential Advisory counsel<ref>Greenspan: "Consumption Tax COuld Help Economy",http://www.foxnews.com/story/0,2933,149298,00.html</ref>.

In 2005 congress created a bill to enact the FairTax (H.R. 25; Senate Bill 1943), it had the support of more then 54 co-sponsors, and both Senate and House minority leaders [[Dennis Hassert]] and [[Tom DeLay]]<ref>“The FairTax: A Trogan Horse For America,” Jews For Preservation of Firearms Ownership, http://www.jpfo.org/fairtax.htm#fn1</ref>. Although the bill received the most support ever for any fundamental tax reform bill, it failed to pass. After the elections of 2004, Georgia Republican Congressman, [[John Linder]], reintroduced the FairTax on the first day of the 109th congress<ref> “Linder Reintroduces FairTax Legislation”, http://www.johnlinder.com/News_Details.asp?NewsID=128</ref>. Congressman Linder stated before congress, “The time is ripe for fundamental tax and a completely new Federal tax regime. I am pleased to reintroduce my Fair Tax proposal today reform, and look forward to the Congress creating a fairer, simpler tax system that advances our core goals of lower taxes and more freedom for our citizens."<ref> “Linder Reintroduces FairTax Legislation”, http://www.johnlinder.com/News_Details.asp?NewsID=128</ref>.”

In 2007 support for the FairTax bill grew to include 60 co-sponsors<ref>FairTax Gains Support, http://www.fairtaxblog.com/20070508/record-sixty-co-sponsors-for-fairtax-bill-hr-25/</ref>.

One of the most outspoken supporters of the Fair Tax is Republican presidential candidate, [[Mike Huckabee]]. Huckabee has said that the Fair Tax would "put the IRS out of business, but put Americans in business<ref> Massachusetts For Mike Huckabee, http://massachusettsforhuckabee.blogspot.com/search/label/Tax%20Plan</ref>." 

== Supporters and Opponents==

[[Image:Fairtaxb.jpg|right|thumb|200px| A FairTax bus during a rally at the 2007 [[Republican]] [[Iowa Straw Poll]].]]
Most of the support for the FairTax comes from the [[Republican Party]] and the [[Libertarian]]s. A significant number of [[Conservative]]s want Republican presidential candidates to support the FairTax, including one Indiana group called ‘Hoosiers for Fair Taxation’<ref>”FairTax Supporters Vent Frustration”, June 2007, http://www.theindychannel.com/news/13651607/detail.html</ref>. <ref>”FairTaxer's continue to “flex their muscles”, July 2007, http://www.fairtax.org/site/PageServer?pagename=news_feature</ref>. Nevertheless, while the number of the members of Congress who have signed on to the proposal has been growing, it still lacks popular support to be close to passage. Former Arkansas governor and presidential candidate [[Mike Huckabee]] made passage of a national sales tax a part of his platform during his recent bid for office. Former Federal Reserve chief [[Alan Greenspan]] also exhibited support for the FairTax in a recent interview.<ref>Greenspan: Consumption Tax could Help Economy, Fox News, March 2005, http://www.foxnews.com/story/0,2933,149298,00.html</ref>

Of the 2008 Democrat presidential candidates, only Mike Gravel supported the plan. [[Rudy Giuliani]], a one time candidate for President on the Republican side, was hesitant and did not support it.<ref> “Giuliani Jeered For Opposing Flat Tax”, Associated Press, July 2007, http://www.forbes.com/feeds/ap/2007/07/07/ap3891710.html</ref>: "I don't think a Fair Tax is realistic change for America. Our economy is dependent upon the way our tax system operates<ref> “Giuliani Jeered For Opposing Flat Tax”, Associated Press, July 2007, http://www.forbes.com/feeds/ap/2007/07/07/ap3891710.html</ref>

==Criticism==

*Critics contend that the FairTax would have Constitutional issues.

*The FairTax would still have tax evasion. Purchases made overseas, although subject to the tax and collected by the U.S. Customs and Border Protection, would be difficult to track and therefore cheating might occur, much as it does now under the current system.

*A greater dependence on second-hand goods might occur, since they are exempt, and therefore alter the spending habits of the U.S. consumer.

*There is no cap on the rate that might be imposed by Congress. Just as current income tax rates change, the initial rate of 23% may be changed over time as Congress desires. However, since there is one rate, it would be difficult to engage in class warfare and pit one economic group against another — Congress would raise or lower the rate on everyone. Every citizen has an interest in keeping the rate low.

*It is argued that the FairTax would benefit the high income earners at the expense of the middle class.

==External Links==

*[http://www.fairtax.org/site/PageServer Americans for Fair Taxation]
*[http://www.factcheck.org/taxes/unspinning_the_fairtax.htm FactCheck.org]
 

==References==
<references/>

[[Category: Taxation]]
[[Category: Economics]]

FairTax

2009-06-24T12:47:17Z

Jeffg2: /* Proposal */ copyedit

[[Image:FairTaxRally.jpg|thumb|350px|A pro FairTax rally in Florida]]
The '''FairTax''' is a tax proposal that would replace all federal [[income tax]]es — including corporate, gift, estate, capital gains, alternative minimum, [[Social Security]], [[Medicare]], and self employment taxes — with a federal national retail [[sales tax]] on personal consumption. The tax would be paid on the purchase of all new goods and services, and would be collected at the final point of sale.<ref> Americans For Fair Taxation, “About the FairTax,” http://www.fairtax.org/site/PageServer?pagename=about_main</ref> Thus, instead of taxing "income", the FairTax would tax spending. This is known as a [[consumption tax]] — a method for taxing income on the back end, when the money is spent, rather than when it is earned.

In theory this would also allow the government to secure revenue from those who avoid paying taxes such as drug pushers of prostitutes, but who would still need goods and therefore pay under a FairTax system. The rate for the FairTax as proposed under current legislation is 23 percent of the total payment including the tax ($23 of every $100 spent in total—calculated similar to income taxes).<ref> "Embedded Taxes Change Fair Tax Analysis",http://www.roanoke.com/editorials/commentary/wb/wb/xp-51569</ref> This would be equivalent to a 30 percent traditional sales tax ($23 on top of every $77 spent—$100 total). Although some critics say it would be higher to be revenue neutral (take in the same amount as the current system).<ref> http://www.factcheck.org/taxes/unspinning_the_fairtax.html</ref> The effective tax rate for a family household would be variable due to the fixed monthly tax rebates.

The proposal includes monthly payments to all family households of lawful U.S. residents as an advance rebate, or 'prebate', of tax on purchases up to the poverty level. The rebate is meant to eliminate the taxation of household necessities and make the plan progressive. Used goods, exports, and intermediate business transactions would not be taxed, nor would savings, investments, or education tuition expenses as they would be considered an investment (rather than final consumption). The tax is voluntary to the extent that individual consumers can choose when to increase or decrease their product buying, unlike now, when income taxes are withheld from the paychecks of most workers.

==Proposal==
If passed, the Fair Tax would accomplish the following:<ref> American For Fair Taxation, http://www.fairtax.org/site/PageServer?pagename=about_main</ref>

* Abolish the [[Internal Revenue Service]] (IRS).
* Abolish personal and business [[income tax]]es and replace it with a national retail sales tax.
* Repeal of the [[16th Amendment]] through companion legislation.
* Provide each worker a monthly prebate, equal to the tax on "poverty level" income.<ref> Just how fair is the ‘Fair Tax’ CNN Money, September 2005, http://money.cnn.com/2005/09/06/pf/taxes/consumptiontax_0510/</ref>
* Close many loopholes under the current system.
* Enable retirees to receive their full pension, untaxed, until they spend it.
* Enable workers to keep their entire paycheck, untaxed, until they spend it. 
* Proponents believe the removal of the above will save 265 billion dollars a year in compliance costs under the current tax system,<ref>http://www.fairtax.org/site/PageServer?pagename=about_fairtax_four#neutral</ref> and be more practical than the current system, which includes over 60,000 pages of tax code.<ref> 67,204-Page Code Confounds Taxpayers, Yet Congress Sits By, USA Today, http://www.usatoday.com/news/opinion/2007-04-03-edit_N.htm?csp=34 </ref>

==History==

===1994-2005===
[[Image:FairTax vs. Tax Code 2.jpg‎ |thumb|300px|Congressman [[John Linder]], one of the strongest proponents for the FairTax, illustrates the size of the current tax system vs the FairTax method]]
The origins of the FairTax began with a group of businessmen from Houston, Texas, who initially financed what has become the political advocacy group Americans For Fair Taxation (AFFT) or FairTax.org, which has grown into a large grassroots tax reform movement.<ref> Just how fair is the ‘FairTax’ CNN Money, September 2005, http://money.cnn.com/2005/09/06/pf/taxes/consumptiontax_0510/</ref>. The Chairman of AFFT, Leo Linbeck, stated that Americans have to pressure the government to come up with a better way of taxation, he said, “It is painfully obvious that [[Washington, D.C.]] insiders so closely linked with the status quo cannot be trusted to overturn the corrupt system of federal taxation. This effort will have to be driven by the American people<ref>Americans For Fair Taxation http://boortz.com/nuze/200510/10132005.html</ref>." The organization hired experts to look into an idea for a better tax system, they spent 23 million dollars in coming up with the idea of the Fair Tax. Their findings were combined into a book, “The FairTax Book: Saying Goodbye to the Income Tax and the IRS,” which Linbeck co-authored with Republican Congressman John Linder<ref> “The Fair Tax Book”,2005, http://www.amazon.com/Fair-Tax-Book-Saying-Goodbye/dp/0060875496/ref=sr_1_1/102-3275846-3467353?ie=UTF8&s=books&qid=1184106196&sr=1-1</ref>.

The FairTax became popular among free market [[conservative]]s, [[libertarian]]s, and some economists in recent years. The complication and wasted bureaucracy of the [[Internal Revenue Service]], government pressure on citizens to reveal information and records, and the loopholes in the current tax system created the incentive to look for a new way of taxation in the United States. Some [[Democrats]] also sought a tax system that would rid them current income tax, which they claim to be discriminate.

In the last 20 years the [[United States]] tax system has been changed over 14,000 times, this has led to an abundance of complexities which lead to its being an inefficient system. In 2003, United States Senator [[Saxby Chambliss]], a [[Republican]], and Senator [[Zell Miller]] a Democrat; introduced a by-partisan version of the Fair Tax. Although the bill had some support in the [[Senate]], it eventually lost in a 50-50. Senator [[Sam Brownback]] later stated the challenges of tax reform, “When you take (the tax code) on straight on, you take on every lobbyist,"

===2005-2007===

Former Federal Reserve Chairman, [[Alan Greenspan]], called for a federal sales tax to replace the broken income tax in 2005. "Since the exemplary 1986 reform, the tax code has drifted back to be overly complicated and burdened by higher marginal rates and by many special provisions that have undesirably narrowed the tax base," Greenspan stated at a Presidential Advisory counsel<ref>Greenspan: "Consumption Tax COuld Help Economy",http://www.foxnews.com/story/0,2933,149298,00.html</ref>.

In 2005 congress created a bill to enact the FairTax (H.R. 25; Senate Bill 1943), it had the support of more then 54 co-sponsors, and both Senate and House minority leaders [[Dennis Hassert]] and [[Tom DeLay]]<ref>“The FairTax: A Trogan Horse For America,” Jews For Preservation of Firearms Ownership, http://www.jpfo.org/fairtax.htm#fn1</ref>. Although the bill received the most support ever for any fundamental tax reform bill, it failed to pass. After the elections of 2004, Georgia Republican Congressman, [[John Linder]], reintroduced the FairTax on the first day of the 109th congress<ref> “Linder Reintroduces FairTax Legislation”, http://www.johnlinder.com/News_Details.asp?NewsID=128</ref>. Congressman Linder stated before congress, “The time is ripe for fundamental tax and a completely new Federal tax regime. I am pleased to reintroduce my Fair Tax proposal today reform, and look forward to the Congress creating a fairer, simpler tax system that advances our core goals of lower taxes and more freedom for our citizens."<ref> “Linder Reintroduces FairTax Legislation”, http://www.johnlinder.com/News_Details.asp?NewsID=128</ref>.”

In 2007 support for the FairTax bill grew to include 60 co-sponsors<ref>FairTax Gains Support, http://www.fairtaxblog.com/20070508/record-sixty-co-sponsors-for-fairtax-bill-hr-25/</ref>.

One of the most outspoken supporters of the Fair Tax is Republican presidential candidate, [[Mike Huckabee]]. Huckabee has said that the Fair Tax would "put the IRS out of business, but put Americans in business<ref> Massachusetts For Mike Huckabee, http://massachusettsforhuckabee.blogspot.com/search/label/Tax%20Plan</ref>." 

== Supporters and Opponents==

[[Image:Fairtaxb.jpg|right|thumb|200px| A FairTax bus during a rally at the 2007 [[Republican]] [[Iowa Straw Poll]].]]
Most of the support for the FairTax comes from the [[Republican Party]] and the [[Libertarian]]s. A significant number of [[Conservative]]s want Republican presidential candidates to support the FairTax, including one Indiana group called ‘Hoosiers for Fair Taxation’<ref>”FairTax Supporters Vent Frustration”, June 2007, http://www.theindychannel.com/news/13651607/detail.html</ref>. <ref>”FairTaxer's continue to “flex their muscles”, July 2007, http://www.fairtax.org/site/PageServer?pagename=news_feature</ref>. Nevertheless, while the number of the members of Congress who have signed on to the proposal has been growing, it still lacks popular support to be close to passage. Former Arkansas governor and presidential candidate [[Mike Huckabee]] made passage of a national sales tax a part of his platform during his recent bid for office. Former Federal Reserve chief [[Alan Greenspan]] also exhibited support for the FairTax in a recent interview.<ref>Greenspan: Consumption Tax could Help Economy, Fox News, March 2005, http://www.foxnews.com/story/0,2933,149298,00.html</ref>

Of the 2008 Democrat presidential candidates, only Mike Gravel supported the plan. [[Rudy Giuliani]], a one time candidate for President on the Republican side, was hesitant and did not support it.<ref> “Giuliani Jeered For Opposing Flat Tax”, Associated Press, July 2007, http://www.forbes.com/feeds/ap/2007/07/07/ap3891710.html</ref>: "I don't think a Fair Tax is realistic change for America. Our economy is dependent upon the way our tax system operates<ref> “Giuliani Jeered For Opposing Flat Tax”, Associated Press, July 2007, http://www.forbes.com/feeds/ap/2007/07/07/ap3891710.html</ref>

==Criticism==

*Critics contend that the FairTax would have Constitutional issues.

*The FairTax would still have tax evasion. Purchases made overseas, although subject to the tax and collected by the U.S. Customs and Border Protection, would be difficult to track and therefore cheating might occur, much as it does now under the current system.

*A greater dependence on second-hand goods might occur, since they are exempt, and therefore alter the spending habits of the U.S. consumer.

*There is no cap on the rate that might be imposed by Congress. Just as current income tax rates change, the initial rate of 23% may be changed over time as Congress desires. However, since there is one rate, it would be difficult to engage in class warfare and pit one economic group against another — Congress would raise or lower the rate on everyone. Every citizen has an interest in keeping the rate low.

*It is argued that the FairTax would benefit the high income earners at the expense of the middle class.

==External Links==

*[http://www.fairtax.org/site/PageServer Americans for Fair Taxation]
*[http://www.factcheck.org/taxes/unspinning_the_fairtax.htm FactCheck.org]
 

==References==
<references/>

[[Category: Taxation]]
[[Category: Economics]]

FairTax

2009-06-24T12:46:54Z

Jeffg2: /* Proposal */ restated and added bit

[[Image:FairTaxRally.jpg|thumb|350px|A pro FairTax rally in Florida]]
The '''FairTax''' is a tax proposal that would replace all federal [[income tax]]es — including corporate, gift, estate, capital gains, alternative minimum, [[Social Security]], [[Medicare]], and self employment taxes — with a federal national retail [[sales tax]] on personal consumption. The tax would be paid on the purchase of all new goods and services, and would be collected at the final point of sale.<ref> Americans For Fair Taxation, “About the FairTax,” http://www.fairtax.org/site/PageServer?pagename=about_main</ref> Thus, instead of taxing "income", the FairTax would tax spending. This is known as a [[consumption tax]] — a method for taxing income on the back end, when the money is spent, rather than when it is earned.

In theory this would also allow the government to secure revenue from those who avoid paying taxes such as drug pushers of prostitutes, but who would still need goods and therefore pay under a FairTax system. The rate for the FairTax as proposed under current legislation is 23 percent of the total payment including the tax ($23 of every $100 spent in total—calculated similar to income taxes).<ref> "Embedded Taxes Change Fair Tax Analysis",http://www.roanoke.com/editorials/commentary/wb/wb/xp-51569</ref> This would be equivalent to a 30 percent traditional sales tax ($23 on top of every $77 spent—$100 total). Although some critics say it would be higher to be revenue neutral (take in the same amount as the current system).<ref> http://www.factcheck.org/taxes/unspinning_the_fairtax.html</ref> The effective tax rate for a family household would be variable due to the fixed monthly tax rebates.

The proposal includes monthly payments to all family households of lawful U.S. residents as an advance rebate, or 'prebate', of tax on purchases up to the poverty level. The rebate is meant to eliminate the taxation of household necessities and make the plan progressive. Used goods, exports, and intermediate business transactions would not be taxed, nor would savings, investments, or education tuition expenses as they would be considered an investment (rather than final consumption). The tax is voluntary to the extent that individual consumers can choose when to increase or decrease their product buying, unlike now, when income taxes are withheld from the paychecks of most workers.

==Proposal==
If passed, the Fair Tax would accomplish the following<ref> American For Fair Taxation, http://www.fairtax.org/site/PageServer?pagename=about_main</ref>:

* Abolish the [[Internal Revenue Service]] (IRS).
* Abolish personal and business [[income tax]]es and replace it with a national retail sales tax.
* Repeal of the [[16th Amendment]] through companion legislation.
* Provide each worker a monthly prebate, equal to the tax on "poverty level" income.<ref> Just how fair is the ‘Fair Tax’ CNN Money, September 2005, http://money.cnn.com/2005/09/06/pf/taxes/consumptiontax_0510/</ref>
* Close many loopholes under the current system.
* Enable retirees to receive their full pension, untaxed, until they spend it.
* Enable workers to keep their entire paycheck, untaxed, until they spend it. 
* Proponents believe the removal of the above will save 265 billion dollars a year in compliance costs under the current tax system,<ref>http://www.fairtax.org/site/PageServer?pagename=about_fairtax_four#neutral</ref> and be more practical than the current system, which includes over 60,000 pages of tax code.<ref> 67,204-Page Code Confounds Taxpayers, Yet Congress Sits By, USA Today, http://www.usatoday.com/news/opinion/2007-04-03-edit_N.htm?csp=34 </ref>

==History==

===1994-2005===
[[Image:FairTax vs. Tax Code 2.jpg‎ |thumb|300px|Congressman [[John Linder]], one of the strongest proponents for the FairTax, illustrates the size of the current tax system vs the FairTax method]]
The origins of the FairTax began with a group of businessmen from Houston, Texas, who initially financed what has become the political advocacy group Americans For Fair Taxation (AFFT) or FairTax.org, which has grown into a large grassroots tax reform movement.<ref> Just how fair is the ‘FairTax’ CNN Money, September 2005, http://money.cnn.com/2005/09/06/pf/taxes/consumptiontax_0510/</ref>. The Chairman of AFFT, Leo Linbeck, stated that Americans have to pressure the government to come up with a better way of taxation, he said, “It is painfully obvious that [[Washington, D.C.]] insiders so closely linked with the status quo cannot be trusted to overturn the corrupt system of federal taxation. This effort will have to be driven by the American people<ref>Americans For Fair Taxation http://boortz.com/nuze/200510/10132005.html</ref>." The organization hired experts to look into an idea for a better tax system, they spent 23 million dollars in coming up with the idea of the Fair Tax. Their findings were combined into a book, “The FairTax Book: Saying Goodbye to the Income Tax and the IRS,” which Linbeck co-authored with Republican Congressman John Linder<ref> “The Fair Tax Book”,2005, http://www.amazon.com/Fair-Tax-Book-Saying-Goodbye/dp/0060875496/ref=sr_1_1/102-3275846-3467353?ie=UTF8&s=books&qid=1184106196&sr=1-1</ref>.

The FairTax became popular among free market [[conservative]]s, [[libertarian]]s, and some economists in recent years. The complication and wasted bureaucracy of the [[Internal Revenue Service]], government pressure on citizens to reveal information and records, and the loopholes in the current tax system created the incentive to look for a new way of taxation in the United States. Some [[Democrats]] also sought a tax system that would rid them current income tax, which they claim to be discriminate.

In the last 20 years the [[United States]] tax system has been changed over 14,000 times, this has led to an abundance of complexities which lead to its being an inefficient system. In 2003, United States Senator [[Saxby Chambliss]], a [[Republican]], and Senator [[Zell Miller]] a Democrat; introduced a by-partisan version of the Fair Tax. Although the bill had some support in the [[Senate]], it eventually lost in a 50-50. Senator [[Sam Brownback]] later stated the challenges of tax reform, “When you take (the tax code) on straight on, you take on every lobbyist,"

===2005-2007===

Former Federal Reserve Chairman, [[Alan Greenspan]], called for a federal sales tax to replace the broken income tax in 2005. "Since the exemplary 1986 reform, the tax code has drifted back to be overly complicated and burdened by higher marginal rates and by many special provisions that have undesirably narrowed the tax base," Greenspan stated at a Presidential Advisory counsel<ref>Greenspan: "Consumption Tax COuld Help Economy",http://www.foxnews.com/story/0,2933,149298,00.html</ref>.

In 2005 congress created a bill to enact the FairTax (H.R. 25; Senate Bill 1943), it had the support of more then 54 co-sponsors, and both Senate and House minority leaders [[Dennis Hassert]] and [[Tom DeLay]]<ref>“The FairTax: A Trogan Horse For America,” Jews For Preservation of Firearms Ownership, http://www.jpfo.org/fairtax.htm#fn1</ref>. Although the bill received the most support ever for any fundamental tax reform bill, it failed to pass. After the elections of 2004, Georgia Republican Congressman, [[John Linder]], reintroduced the FairTax on the first day of the 109th congress<ref> “Linder Reintroduces FairTax Legislation”, http://www.johnlinder.com/News_Details.asp?NewsID=128</ref>. Congressman Linder stated before congress, “The time is ripe for fundamental tax and a completely new Federal tax regime. I am pleased to reintroduce my Fair Tax proposal today reform, and look forward to the Congress creating a fairer, simpler tax system that advances our core goals of lower taxes and more freedom for our citizens."<ref> “Linder Reintroduces FairTax Legislation”, http://www.johnlinder.com/News_Details.asp?NewsID=128</ref>.”

In 2007 support for the FairTax bill grew to include 60 co-sponsors<ref>FairTax Gains Support, http://www.fairtaxblog.com/20070508/record-sixty-co-sponsors-for-fairtax-bill-hr-25/</ref>.

One of the most outspoken supporters of the Fair Tax is Republican presidential candidate, [[Mike Huckabee]]. Huckabee has said that the Fair Tax would "put the IRS out of business, but put Americans in business<ref> Massachusetts For Mike Huckabee, http://massachusettsforhuckabee.blogspot.com/search/label/Tax%20Plan</ref>." 

== Supporters and Opponents==

[[Image:Fairtaxb.jpg|right|thumb|200px| A FairTax bus during a rally at the 2007 [[Republican]] [[Iowa Straw Poll]].]]
Most of the support for the FairTax comes from the [[Republican Party]] and the [[Libertarian]]s. A significant number of [[Conservative]]s want Republican presidential candidates to support the FairTax, including one Indiana group called ‘Hoosiers for Fair Taxation’<ref>”FairTax Supporters Vent Frustration”, June 2007, http://www.theindychannel.com/news/13651607/detail.html</ref>. <ref>”FairTaxer's continue to “flex their muscles”, July 2007, http://www.fairtax.org/site/PageServer?pagename=news_feature</ref>. Nevertheless, while the number of the members of Congress who have signed on to the proposal has been growing, it still lacks popular support to be close to passage. Former Arkansas governor and presidential candidate [[Mike Huckabee]] made passage of a national sales tax a part of his platform during his recent bid for office. Former Federal Reserve chief [[Alan Greenspan]] also exhibited support for the FairTax in a recent interview.<ref>Greenspan: Consumption Tax could Help Economy, Fox News, March 2005, http://www.foxnews.com/story/0,2933,149298,00.html</ref>

Of the 2008 Democrat presidential candidates, only Mike Gravel supported the plan. [[Rudy Giuliani]], a one time candidate for President on the Republican side, was hesitant and did not support it.<ref> “Giuliani Jeered For Opposing Flat Tax”, Associated Press, July 2007, http://www.forbes.com/feeds/ap/2007/07/07/ap3891710.html</ref>: "I don't think a Fair Tax is realistic change for America. Our economy is dependent upon the way our tax system operates<ref> “Giuliani Jeered For Opposing Flat Tax”, Associated Press, July 2007, http://www.forbes.com/feeds/ap/2007/07/07/ap3891710.html</ref>

==Criticism==

*Critics contend that the FairTax would have Constitutional issues.

*The FairTax would still have tax evasion. Purchases made overseas, although subject to the tax and collected by the U.S. Customs and Border Protection, would be difficult to track and therefore cheating might occur, much as it does now under the current system.

*A greater dependence on second-hand goods might occur, since they are exempt, and therefore alter the spending habits of the U.S. consumer.

*There is no cap on the rate that might be imposed by Congress. Just as current income tax rates change, the initial rate of 23% may be changed over time as Congress desires. However, since there is one rate, it would be difficult to engage in class warfare and pit one economic group against another — Congress would raise or lower the rate on everyone. Every citizen has an interest in keeping the rate low.

*It is argued that the FairTax would benefit the high income earners at the expense of the middle class.

==External Links==

*[http://www.fairtax.org/site/PageServer Americans for Fair Taxation]
*[http://www.factcheck.org/taxes/unspinning_the_fairtax.htm FactCheck.org]
 

==References==
<references/>

[[Category: Taxation]]
[[Category: Economics]]

FairTax

2009-06-24T12:40:14Z

Jeffg2: specified personal consumption, doesn't apply to b2b

[[Image:FairTaxRally.jpg|thumb|350px|A pro FairTax rally in Florida]]
The '''FairTax''' is a tax proposal that would replace all federal [[income tax]]es — including corporate, gift, estate, capital gains, alternative minimum, [[Social Security]], [[Medicare]], and self employment taxes — with a federal national retail [[sales tax]] on personal consumption. The tax would be paid on the purchase of all new goods and services, and would be collected at the final point of sale.<ref> Americans For Fair Taxation, “About the FairTax,” http://www.fairtax.org/site/PageServer?pagename=about_main</ref> Thus, instead of taxing "income", the FairTax would tax spending. This is known as a [[consumption tax]] — a method for taxing income on the back end, when the money is spent, rather than when it is earned.

In theory this would also allow the government to secure revenue from those who avoid paying taxes such as drug pushers of prostitutes, but who would still need goods and therefore pay under a FairTax system. The rate for the FairTax as proposed under current legislation is 23 percent of the total payment including the tax ($23 of every $100 spent in total—calculated similar to income taxes).<ref> "Embedded Taxes Change Fair Tax Analysis",http://www.roanoke.com/editorials/commentary/wb/wb/xp-51569</ref> This would be equivalent to a 30 percent traditional sales tax ($23 on top of every $77 spent—$100 total). Although some critics say it would be higher to be revenue neutral (take in the same amount as the current system).<ref> http://www.factcheck.org/taxes/unspinning_the_fairtax.html</ref> The effective tax rate for a family household would be variable due to the fixed monthly tax rebates.

The proposal includes monthly payments to all family households of lawful U.S. residents as an advance rebate, or 'prebate', of tax on purchases up to the poverty level. The rebate is meant to eliminate the taxation of household necessities and make the plan progressive. Used goods, exports, and intermediate business transactions would not be taxed, nor would savings, investments, or education tuition expenses as they would be considered an investment (rather than final consumption). The tax is voluntary to the extent that individual consumers can choose when to increase or decrease their product buying, unlike now, when income taxes are withheld from the paychecks of most workers.

==Proposal==
If passed, the Fair Tax would accomplish the following<ref> American For Fair Taxation, http://www.fairtax.org/site/PageServer?pagename=about_main</ref>:

* Abolish the [[Internal Revenue Service]] (IRS).
* Abolish personal and business [[income tax]]es.
* Calls for the repeal of the [[16th Amendment]].
* Provide each worker a monthly prebate, equal to the tax on "poverty level" income. <ref> Just how fair is the ‘Fair Tax’ CNN Money, September 2005, http://money.cnn.com/2005/09/06/pf/taxes/consumptiontax_0510/</ref>
* Close many loopholes under the current system.
* Enable retirees to receive their full pension, untaxed, until they spend it.
* Enable workers to keep their entire paycheck, untaxed, until they spend it. 
* Proponents believe the removal of the above will save 265 billion dollars a year in compliance costs under the current tax system,<ref>http://www.fairtax.org/site/PageServer?pagename=about_fairtax_four#neutral</ref> and be more practical than the current system, which includes over 60,000 pages of tax code.<ref> 67,204-Page Code Confounds Taxpayers, Yet Congress Sits By, USA Today, http://www.usatoday.com/news/opinion/2007-04-03-edit_N.htm?csp=34 </ref>

==History==

===1994-2005===
[[Image:FairTax vs. Tax Code 2.jpg‎ |thumb|300px|Congressman [[John Linder]], one of the strongest proponents for the FairTax, illustrates the size of the current tax system vs the FairTax method]]
The origins of the FairTax began with a group of businessmen from Houston, Texas, who initially financed what has become the political advocacy group Americans For Fair Taxation (AFFT) or FairTax.org, which has grown into a large grassroots tax reform movement.<ref> Just how fair is the ‘FairTax’ CNN Money, September 2005, http://money.cnn.com/2005/09/06/pf/taxes/consumptiontax_0510/</ref>. The Chairman of AFFT, Leo Linbeck, stated that Americans have to pressure the government to come up with a better way of taxation, he said, “It is painfully obvious that [[Washington, D.C.]] insiders so closely linked with the status quo cannot be trusted to overturn the corrupt system of federal taxation. This effort will have to be driven by the American people<ref>Americans For Fair Taxation http://boortz.com/nuze/200510/10132005.html</ref>." The organization hired experts to look into an idea for a better tax system, they spent 23 million dollars in coming up with the idea of the Fair Tax. Their findings were combined into a book, “The FairTax Book: Saying Goodbye to the Income Tax and the IRS,” which Linbeck co-authored with Republican Congressman John Linder<ref> “The Fair Tax Book”,2005, http://www.amazon.com/Fair-Tax-Book-Saying-Goodbye/dp/0060875496/ref=sr_1_1/102-3275846-3467353?ie=UTF8&s=books&qid=1184106196&sr=1-1</ref>.

The FairTax became popular among free market [[conservative]]s, [[libertarian]]s, and some economists in recent years. The complication and wasted bureaucracy of the [[Internal Revenue Service]], government pressure on citizens to reveal information and records, and the loopholes in the current tax system created the incentive to look for a new way of taxation in the United States. Some [[Democrats]] also sought a tax system that would rid them current income tax, which they claim to be discriminate.

In the last 20 years the [[United States]] tax system has been changed over 14,000 times, this has led to an abundance of complexities which lead to its being an inefficient system. In 2003, United States Senator [[Saxby Chambliss]], a [[Republican]], and Senator [[Zell Miller]] a Democrat; introduced a by-partisan version of the Fair Tax. Although the bill had some support in the [[Senate]], it eventually lost in a 50-50. Senator [[Sam Brownback]] later stated the challenges of tax reform, “When you take (the tax code) on straight on, you take on every lobbyist,"

===2005-2007===

Former Federal Reserve Chairman, [[Alan Greenspan]], called for a federal sales tax to replace the broken income tax in 2005. "Since the exemplary 1986 reform, the tax code has drifted back to be overly complicated and burdened by higher marginal rates and by many special provisions that have undesirably narrowed the tax base," Greenspan stated at a Presidential Advisory counsel<ref>Greenspan: "Consumption Tax COuld Help Economy",http://www.foxnews.com/story/0,2933,149298,00.html</ref>.

In 2005 congress created a bill to enact the FairTax (H.R. 25; Senate Bill 1943), it had the support of more then 54 co-sponsors, and both Senate and House minority leaders [[Dennis Hassert]] and [[Tom DeLay]]<ref>“The FairTax: A Trogan Horse For America,” Jews For Preservation of Firearms Ownership, http://www.jpfo.org/fairtax.htm#fn1</ref>. Although the bill received the most support ever for any fundamental tax reform bill, it failed to pass. After the elections of 2004, Georgia Republican Congressman, [[John Linder]], reintroduced the FairTax on the first day of the 109th congress<ref> “Linder Reintroduces FairTax Legislation”, http://www.johnlinder.com/News_Details.asp?NewsID=128</ref>. Congressman Linder stated before congress, “The time is ripe for fundamental tax and a completely new Federal tax regime. I am pleased to reintroduce my Fair Tax proposal today reform, and look forward to the Congress creating a fairer, simpler tax system that advances our core goals of lower taxes and more freedom for our citizens."<ref> “Linder Reintroduces FairTax Legislation”, http://www.johnlinder.com/News_Details.asp?NewsID=128</ref>.”

In 2007 support for the FairTax bill grew to include 60 co-sponsors<ref>FairTax Gains Support, http://www.fairtaxblog.com/20070508/record-sixty-co-sponsors-for-fairtax-bill-hr-25/</ref>.

One of the most outspoken supporters of the Fair Tax is Republican presidential candidate, [[Mike Huckabee]]. Huckabee has said that the Fair Tax would "put the IRS out of business, but put Americans in business<ref> Massachusetts For Mike Huckabee, http://massachusettsforhuckabee.blogspot.com/search/label/Tax%20Plan</ref>." 

== Supporters and Opponents==

[[Image:Fairtaxb.jpg|right|thumb|200px| A FairTax bus during a rally at the 2007 [[Republican]] [[Iowa Straw Poll]].]]
Most of the support for the FairTax comes from the [[Republican Party]] and the [[Libertarian]]s. A significant number of [[Conservative]]s want Republican presidential candidates to support the FairTax, including one Indiana group called ‘Hoosiers for Fair Taxation’<ref>”FairTax Supporters Vent Frustration”, June 2007, http://www.theindychannel.com/news/13651607/detail.html</ref>. <ref>”FairTaxer's continue to “flex their muscles”, July 2007, http://www.fairtax.org/site/PageServer?pagename=news_feature</ref>. Nevertheless, while the number of the members of Congress who have signed on to the proposal has been growing, it still lacks popular support to be close to passage. Former Arkansas governor and presidential candidate [[Mike Huckabee]] made passage of a national sales tax a part of his platform during his recent bid for office. Former Federal Reserve chief [[Alan Greenspan]] also exhibited support for the FairTax in a recent interview.<ref>Greenspan: Consumption Tax could Help Economy, Fox News, March 2005, http://www.foxnews.com/story/0,2933,149298,00.html</ref>

Of the 2008 Democrat presidential candidates, only Mike Gravel supported the plan. [[Rudy Giuliani]], a one time candidate for President on the Republican side, was hesitant and did not support it.<ref> “Giuliani Jeered For Opposing Flat Tax”, Associated Press, July 2007, http://www.forbes.com/feeds/ap/2007/07/07/ap3891710.html</ref>: "I don't think a Fair Tax is realistic change for America. Our economy is dependent upon the way our tax system operates<ref> “Giuliani Jeered For Opposing Flat Tax”, Associated Press, July 2007, http://www.forbes.com/feeds/ap/2007/07/07/ap3891710.html</ref>

==Criticism==

*Critics contend that the FairTax would have Constitutional issues.

*The FairTax would still have tax evasion. Purchases made overseas, although subject to the tax and collected by the U.S. Customs and Border Protection, would be difficult to track and therefore cheating might occur, much as it does now under the current system.

*A greater dependence on second-hand goods might occur, since they are exempt, and therefore alter the spending habits of the U.S. consumer.

*There is no cap on the rate that might be imposed by Congress. Just as current income tax rates change, the initial rate of 23% may be changed over time as Congress desires. However, since there is one rate, it would be difficult to engage in class warfare and pit one economic group against another — Congress would raise or lower the rate on everyone. Every citizen has an interest in keeping the rate low.

*It is argued that the FairTax would benefit the high income earners at the expense of the middle class.

==External Links==

*[http://www.fairtax.org/site/PageServer Americans for Fair Taxation]
*[http://www.factcheck.org/taxes/unspinning_the_fairtax.htm FactCheck.org]
 

==References==
<references/>

[[Category: Taxation]]
[[Category: Economics]]

User talk:Jeffg2

2009-06-24T12:32:55Z

Jeffg2: cleanup

{{Welcome|sig=--[[User:Jpatt|Jpatt]] 22:30, 23 June 2009 (EDT)}}

:Finally got on. Not sure if you prefer a reply here or on your talk page. Sorry, I misunderstood what you were trying to tell me. I thought you wanted me to recreate the account and put my firstname lastinit in the field for my name. Not recreate my account with that name. So I was looking for a way to delete my account and recreate it. I also couldn't post to your talk to ask questions. [[User:Jeffg2|Jeffg2]]

::Glad you took the time to make it back. Sorry I had to cut you off, don't take it personally. Contact me if I can be of assistance.--[[User:Jpatt|Jpatt]] 22:44, 23 June 2009 (EDT)

FairTax

2009-06-24T03:46:24Z

Jeffg2: /* Criticism */ More accurate

[[Image:FairTaxRally.jpg|thumb|350px|A pro FairTax rally in Florida]]
The '''FairTax''' is a tax proposal that would replace all federal [[income tax]]es — including corporate, gift, estate, capital gains, alternative minimum, [[Social Security]], [[Medicare]], and self employment taxes — with a federal national retail [[sales tax]]. The tax would be paid on the purchase of all new goods and services, and would be collected at the final point of sale.<ref> Americans For Fair Taxation, “About the FairTax,” http://www.fairtax.org/site/PageServer?pagename=about_main</ref> Thus, instead of taxing "income", the FairTax would tax spending. This is known as a [[consumption tax]] — a method for taxing income on the back end, when the money is spent, rather than when it is earned.

In theory this would also allow the government to secure revenue from those who avoid paying taxes such as drug pushers of prostitutes, but who would still need goods and therefore pay under a FairTax system. The rate for the FairTax as proposed under current legislation is 23 percent of the total payment including the tax ($23 of every $100 spent in total—calculated similar to income taxes).<ref> "Embedded Taxes Change Fair Tax Analysis",http://www.roanoke.com/editorials/commentary/wb/wb/xp-51569</ref> This would be equivalent to a 30 percent traditional sales tax ($23 on top of every $77 spent—$100 total). Although some critics say it would be higher to be revenue neutral (take in the same amount as the current system).<ref> http://www.factcheck.org/taxes/unspinning_the_fairtax.html</ref> The effective tax rate for a family household would be variable due to the fixed monthly tax rebates.

The proposal includes monthly payments to all family households of lawful U.S. residents as an advance rebate, or 'prebate', of tax on purchases up to the poverty level. The rebate is meant to eliminate the taxation of household necessities and make the plan progressive. Used goods, exports, and intermediate business transactions would not be taxed, nor would savings, investments, or education tuition expenses as they would be considered an investment (rather than final consumption). The tax is voluntary to the extent that individual consumers can choose when to increase or decrease their product buying, unlike now, when income taxes are withheld from the paychecks of most workers.

==Proposal==
If passed, the Fair Tax would accomplish the following<ref> American For Fair Taxation, http://www.fairtax.org/site/PageServer?pagename=about_main</ref>:

* Abolish the [[Internal Revenue Service]] (IRS).
* Abolish personal and business [[income tax]]es.
* Calls for the repeal of the [[16th Amendment]].
* Provide each worker a monthly prebate, equal to the tax on "poverty level" income. <ref> Just how fair is the ‘Fair Tax’ CNN Money, September 2005, http://money.cnn.com/2005/09/06/pf/taxes/consumptiontax_0510/</ref>
* Close many loopholes under the current system.
* Enable retirees to receive their full pension, untaxed, until they spend it.
* Enable workers to keep their entire paycheck, untaxed, until they spend it. 
* Proponents believe the removal of the above will save 265 billion dollars a year in compliance costs under the current tax system,<ref>http://www.fairtax.org/site/PageServer?pagename=about_fairtax_four#neutral</ref> and be more practical than the current system, which includes over 60,000 pages of tax code.<ref> 67,204-Page Code Confounds Taxpayers, Yet Congress Sits By, USA Today, http://www.usatoday.com/news/opinion/2007-04-03-edit_N.htm?csp=34 </ref>

==History==

===1994-2005===
[[Image:FairTax vs. Tax Code 2.jpg‎ |thumb|300px|Congressman [[John Linder]], one of the strongest proponents for the FairTax, illustrates the size of the current tax system vs the FairTax method]]
The origins of the FairTax began with a group of businessmen from Houston, Texas, who initially financed what has become the political advocacy group Americans For Fair Taxation (AFFT) or FairTax.org, which has grown into a large grassroots tax reform movement.<ref> Just how fair is the ‘FairTax’ CNN Money, September 2005, http://money.cnn.com/2005/09/06/pf/taxes/consumptiontax_0510/</ref>. The Chairman of AFFT, Leo Linbeck, stated that Americans have to pressure the government to come up with a better way of taxation, he said, “It is painfully obvious that [[Washington, D.C.]] insiders so closely linked with the status quo cannot be trusted to overturn the corrupt system of federal taxation. This effort will have to be driven by the American people<ref>Americans For Fair Taxation http://boortz.com/nuze/200510/10132005.html</ref>." The organization hired experts to look into an idea for a better tax system, they spent 23 million dollars in coming up with the idea of the Fair Tax. Their findings were combined into a book, “The FairTax Book: Saying Goodbye to the Income Tax and the IRS,” which Linbeck co-authored with Republican Congressman John Linder<ref> “The Fair Tax Book”,2005, http://www.amazon.com/Fair-Tax-Book-Saying-Goodbye/dp/0060875496/ref=sr_1_1/102-3275846-3467353?ie=UTF8&s=books&qid=1184106196&sr=1-1</ref>.

The FairTax became popular among free market [[conservative]]s, [[libertarian]]s, and some economists in recent years. The complication and wasted bureaucracy of the [[Internal Revenue Service]], government pressure on citizens to reveal information and records, and the loopholes in the current tax system created the incentive to look for a new way of taxation in the United States. Some [[Democrats]] also sought a tax system that would rid them current income tax, which they claim to be discriminate.

In the last 20 years the [[United States]] tax system has been changed over 14,000 times, this has led to an abundance of complexities which lead to its being an inefficient system. In 2003, United States Senator [[Saxby Chambliss]], a [[Republican]], and Senator [[Zell Miller]] a Democrat; introduced a by-partisan version of the Fair Tax. Although the bill had some support in the [[Senate]], it eventually lost in a 50-50. Senator [[Sam Brownback]] later stated the challenges of tax reform, “When you take (the tax code) on straight on, you take on every lobbyist,"

===2005-2007===

Former Federal Reserve Chairman, [[Alan Greenspan]], called for a federal sales tax to replace the broken income tax in 2005. "Since the exemplary 1986 reform, the tax code has drifted back to be overly complicated and burdened by higher marginal rates and by many special provisions that have undesirably narrowed the tax base," Greenspan stated at a Presidential Advisory counsel<ref>Greenspan: "Consumption Tax COuld Help Economy",http://www.foxnews.com/story/0,2933,149298,00.html</ref>.

In 2005 congress created a bill to enact the FairTax (H.R. 25; Senate Bill 1943), it had the support of more then 54 co-sponsors, and both Senate and House minority leaders [[Dennis Hassert]] and [[Tom DeLay]]<ref>“The FairTax: A Trogan Horse For America,” Jews For Preservation of Firearms Ownership, http://www.jpfo.org/fairtax.htm#fn1</ref>. Although the bill received the most support ever for any fundamental tax reform bill, it failed to pass. After the elections of 2004, Georgia Republican Congressman, [[John Linder]], reintroduced the FairTax on the first day of the 109th congress<ref> “Linder Reintroduces FairTax Legislation”, http://www.johnlinder.com/News_Details.asp?NewsID=128</ref>. Congressman Linder stated before congress, “The time is ripe for fundamental tax and a completely new Federal tax regime. I am pleased to reintroduce my Fair Tax proposal today reform, and look forward to the Congress creating a fairer, simpler tax system that advances our core goals of lower taxes and more freedom for our citizens."<ref> “Linder Reintroduces FairTax Legislation”, http://www.johnlinder.com/News_Details.asp?NewsID=128</ref>.”

In 2007 support for the FairTax bill grew to include 60 co-sponsors<ref>FairTax Gains Support, http://www.fairtaxblog.com/20070508/record-sixty-co-sponsors-for-fairtax-bill-hr-25/</ref>.

One of the most outspoken supporters of the Fair Tax is Republican presidential candidate, [[Mike Huckabee]]. Huckabee has said that the Fair Tax would "put the IRS out of business, but put Americans in business<ref> Massachusetts For Mike Huckabee, http://massachusettsforhuckabee.blogspot.com/search/label/Tax%20Plan</ref>." 

== Supporters and Opponents==

[[Image:Fairtaxb.jpg|right|thumb|200px| A FairTax bus during a rally at the 2007 [[Republican]] [[Iowa Straw Poll]].]]
Most of the support for the FairTax comes from the [[Republican Party]] and the [[Libertarian]]s. A significant number of [[Conservative]]s want Republican presidential candidates to support the FairTax, including one Indiana group called ‘Hoosiers for Fair Taxation’<ref>”FairTax Supporters Vent Frustration”, June 2007, http://www.theindychannel.com/news/13651607/detail.html</ref>. <ref>”FairTaxer's continue to “flex their muscles”, July 2007, http://www.fairtax.org/site/PageServer?pagename=news_feature</ref>. Nevertheless, while the number of the members of Congress who have signed on to the proposal has been growing, it still lacks popular support to be close to passage. Former Arkansas governor and presidential candidate [[Mike Huckabee]] made passage of a national sales tax a part of his platform during his recent bid for office. Former Federal Reserve chief [[Alan Greenspan]] also exhibited support for the FairTax in a recent interview.<ref>Greenspan: Consumption Tax could Help Economy, Fox News, March 2005, http://www.foxnews.com/story/0,2933,149298,00.html</ref>

Of the 2008 Democrat presidential candidates, only Mike Gravel supported the plan. [[Rudy Giuliania]], a one time candidate for President on the Republican side, was hesitant and did not support it.<ref> “Giuliani Jeered For Opposing Flat Tax”, Associated Press, July 2007, http://www.forbes.com/feeds/ap/2007/07/07/ap3891710.html</ref>: "I don't think a Fair Tax is realistic change for America. Our economy is dependent upon the way our tax system operates<ref> “Giuliani Jeered For Opposing Flat Tax”, Associated Press, July 2007, http://www.forbes.com/feeds/ap/2007/07/07/ap3891710.html</ref>

==Criticism==

*Critics contend that the FairTax would have Constitutional issues.

*The FairTax would still have tax evasion. Purchases made overseas, although subject to the tax and collected by the U.S. Customs and Border Protection, would be difficult to track and therefore cheating might occur, much as it does now under the current system.

*A greater dependence on second-hand goods might occur, since they are exempt, and therefore alter the spending habits of the U.S. consumer.

*There is no cap on the rate that might be imposed by Congress. Just as current income tax rates change, the initial rate of 23% may be changed over time as Congress desires. However, since there is one rate, it would be difficult to engage in class warfare and pit one economic group against another — Congress would raise or lower the rate on everyone. Every citizen has an interest in keeping the rate low.

*It is argued that the FairTax would benefit the high income earners at the expense of the middle class.

==External Links==

*[http://www.fairtax.org/site/PageServer Americans for Fair Taxation]
*[http://www.factcheck.org/taxes/unspinning_the_fairtax.htm FactCheck.org]
 

==References==
<references/>

[[Category: Taxation]]
[[Category: Economics]]

FairTax

2009-06-24T03:45:40Z

Jeffg2: /* Criticism */ copyedit

[[Image:FairTaxRally.jpg|thumb|350px|A pro FairTax rally in Florida]]
The '''FairTax''' is a tax proposal that would replace all federal [[income tax]]es — including corporate, gift, estate, capital gains, alternative minimum, [[Social Security]], [[Medicare]], and self employment taxes — with a federal national retail [[sales tax]]. The tax would be paid on the purchase of all new goods and services, and would be collected at the final point of sale.<ref> Americans For Fair Taxation, “About the FairTax,” http://www.fairtax.org/site/PageServer?pagename=about_main</ref> Thus, instead of taxing "income", the FairTax would tax spending. This is known as a [[consumption tax]] — a method for taxing income on the back end, when the money is spent, rather than when it is earned.

In theory this would also allow the government to secure revenue from those who avoid paying taxes such as drug pushers of prostitutes, but who would still need goods and therefore pay under a FairTax system. The rate for the FairTax as proposed under current legislation is 23 percent of the total payment including the tax ($23 of every $100 spent in total—calculated similar to income taxes).<ref> "Embedded Taxes Change Fair Tax Analysis",http://www.roanoke.com/editorials/commentary/wb/wb/xp-51569</ref> This would be equivalent to a 30 percent traditional sales tax ($23 on top of every $77 spent—$100 total). Although some critics say it would be higher to be revenue neutral (take in the same amount as the current system).<ref> http://www.factcheck.org/taxes/unspinning_the_fairtax.html</ref> The effective tax rate for a family household would be variable due to the fixed monthly tax rebates.

The proposal includes monthly payments to all family households of lawful U.S. residents as an advance rebate, or 'prebate', of tax on purchases up to the poverty level. The rebate is meant to eliminate the taxation of household necessities and make the plan progressive. Used goods, exports, and intermediate business transactions would not be taxed, nor would savings, investments, or education tuition expenses as they would be considered an investment (rather than final consumption). The tax is voluntary to the extent that individual consumers can choose when to increase or decrease their product buying, unlike now, when income taxes are withheld from the paychecks of most workers.

==Proposal==
If passed, the Fair Tax would accomplish the following<ref> American For Fair Taxation, http://www.fairtax.org/site/PageServer?pagename=about_main</ref>:

* Abolish the [[Internal Revenue Service]] (IRS).
* Abolish personal and business [[income tax]]es.
* Calls for the repeal of the [[16th Amendment]].
* Provide each worker a monthly prebate, equal to the tax on "poverty level" income. <ref> Just how fair is the ‘Fair Tax’ CNN Money, September 2005, http://money.cnn.com/2005/09/06/pf/taxes/consumptiontax_0510/</ref>
* Close many loopholes under the current system.
* Enable retirees to receive their full pension, untaxed, until they spend it.
* Enable workers to keep their entire paycheck, untaxed, until they spend it. 
* Proponents believe the removal of the above will save 265 billion dollars a year in compliance costs under the current tax system,<ref>http://www.fairtax.org/site/PageServer?pagename=about_fairtax_four#neutral</ref> and be more practical than the current system, which includes over 60,000 pages of tax code.<ref> 67,204-Page Code Confounds Taxpayers, Yet Congress Sits By, USA Today, http://www.usatoday.com/news/opinion/2007-04-03-edit_N.htm?csp=34 </ref>

==History==

===1994-2005===
[[Image:FairTax vs. Tax Code 2.jpg‎ |thumb|300px|Congressman [[John Linder]], one of the strongest proponents for the FairTax, illustrates the size of the current tax system vs the FairTax method]]
The origins of the FairTax began with a group of businessmen from Houston, Texas, who initially financed what has become the political advocacy group Americans For Fair Taxation (AFFT) or FairTax.org, which has grown into a large grassroots tax reform movement.<ref> Just how fair is the ‘FairTax’ CNN Money, September 2005, http://money.cnn.com/2005/09/06/pf/taxes/consumptiontax_0510/</ref>. The Chairman of AFFT, Leo Linbeck, stated that Americans have to pressure the government to come up with a better way of taxation, he said, “It is painfully obvious that [[Washington, D.C.]] insiders so closely linked with the status quo cannot be trusted to overturn the corrupt system of federal taxation. This effort will have to be driven by the American people<ref>Americans For Fair Taxation http://boortz.com/nuze/200510/10132005.html</ref>." The organization hired experts to look into an idea for a better tax system, they spent 23 million dollars in coming up with the idea of the Fair Tax. Their findings were combined into a book, “The FairTax Book: Saying Goodbye to the Income Tax and the IRS,” which Linbeck co-authored with Republican Congressman John Linder<ref> “The Fair Tax Book”,2005, http://www.amazon.com/Fair-Tax-Book-Saying-Goodbye/dp/0060875496/ref=sr_1_1/102-3275846-3467353?ie=UTF8&s=books&qid=1184106196&sr=1-1</ref>.

The FairTax became popular among free market [[conservative]]s, [[libertarian]]s, and some economists in recent years. The complication and wasted bureaucracy of the [[Internal Revenue Service]], government pressure on citizens to reveal information and records, and the loopholes in the current tax system created the incentive to look for a new way of taxation in the United States. Some [[Democrats]] also sought a tax system that would rid them current income tax, which they claim to be discriminate.

In the last 20 years the [[United States]] tax system has been changed over 14,000 times, this has led to an abundance of complexities which lead to its being an inefficient system. In 2003, United States Senator [[Saxby Chambliss]], a [[Republican]], and Senator [[Zell Miller]] a Democrat; introduced a by-partisan version of the Fair Tax. Although the bill had some support in the [[Senate]], it eventually lost in a 50-50. Senator [[Sam Brownback]] later stated the challenges of tax reform, “When you take (the tax code) on straight on, you take on every lobbyist,"

===2005-2007===

Former Federal Reserve Chairman, [[Alan Greenspan]], called for a federal sales tax to replace the broken income tax in 2005. "Since the exemplary 1986 reform, the tax code has drifted back to be overly complicated and burdened by higher marginal rates and by many special provisions that have undesirably narrowed the tax base," Greenspan stated at a Presidential Advisory counsel<ref>Greenspan: "Consumption Tax COuld Help Economy",http://www.foxnews.com/story/0,2933,149298,00.html</ref>.

In 2005 congress created a bill to enact the FairTax (H.R. 25; Senate Bill 1943), it had the support of more then 54 co-sponsors, and both Senate and House minority leaders [[Dennis Hassert]] and [[Tom DeLay]]<ref>“The FairTax: A Trogan Horse For America,” Jews For Preservation of Firearms Ownership, http://www.jpfo.org/fairtax.htm#fn1</ref>. Although the bill received the most support ever for any fundamental tax reform bill, it failed to pass. After the elections of 2004, Georgia Republican Congressman, [[John Linder]], reintroduced the FairTax on the first day of the 109th congress<ref> “Linder Reintroduces FairTax Legislation”, http://www.johnlinder.com/News_Details.asp?NewsID=128</ref>. Congressman Linder stated before congress, “The time is ripe for fundamental tax and a completely new Federal tax regime. I am pleased to reintroduce my Fair Tax proposal today reform, and look forward to the Congress creating a fairer, simpler tax system that advances our core goals of lower taxes and more freedom for our citizens."<ref> “Linder Reintroduces FairTax Legislation”, http://www.johnlinder.com/News_Details.asp?NewsID=128</ref>.”

In 2007 support for the FairTax bill grew to include 60 co-sponsors<ref>FairTax Gains Support, http://www.fairtaxblog.com/20070508/record-sixty-co-sponsors-for-fairtax-bill-hr-25/</ref>.

One of the most outspoken supporters of the Fair Tax is Republican presidential candidate, [[Mike Huckabee]]. Huckabee has said that the Fair Tax would "put the IRS out of business, but put Americans in business<ref> Massachusetts For Mike Huckabee, http://massachusettsforhuckabee.blogspot.com/search/label/Tax%20Plan</ref>." 

== Supporters and Opponents==

[[Image:Fairtaxb.jpg|right|thumb|200px| A FairTax bus during a rally at the 2007 [[Republican]] [[Iowa Straw Poll]].]]
Most of the support for the FairTax comes from the [[Republican Party]] and the [[Libertarian]]s. A significant number of [[Conservative]]s want Republican presidential candidates to support the FairTax, including one Indiana group called ‘Hoosiers for Fair Taxation’<ref>”FairTax Supporters Vent Frustration”, June 2007, http://www.theindychannel.com/news/13651607/detail.html</ref>. <ref>”FairTaxer's continue to “flex their muscles”, July 2007, http://www.fairtax.org/site/PageServer?pagename=news_feature</ref>. Nevertheless, while the number of the members of Congress who have signed on to the proposal has been growing, it still lacks popular support to be close to passage. Former Arkansas governor and presidential candidate [[Mike Huckabee]] made passage of a national sales tax a part of his platform during his recent bid for office. Former Federal Reserve chief [[Alan Greenspan]] also exhibited support for the FairTax in a recent interview.<ref>Greenspan: Consumption Tax could Help Economy, Fox News, March 2005, http://www.foxnews.com/story/0,2933,149298,00.html</ref>

Of the 2008 Democrat presidential candidates, only Mike Gravel supported the plan. [[Rudy Giuliania]], a one time candidate for President on the Republican side, was hesitant and did not support it.<ref> “Giuliani Jeered For Opposing Flat Tax”, Associated Press, July 2007, http://www.forbes.com/feeds/ap/2007/07/07/ap3891710.html</ref>: "I don't think a Fair Tax is realistic change for America. Our economy is dependent upon the way our tax system operates<ref> “Giuliani Jeered For Opposing Flat Tax”, Associated Press, July 2007, http://www.forbes.com/feeds/ap/2007/07/07/ap3891710.html</ref>

==Criticism==

*Critics contend that the FairTax would have Constitutional issues.

*The FairTax would still have tax evasion. Purchases made overseas, although subject to the tax and collected by the U.S. Customs and Border Protection, would be difficult to track and therefore cheating might occur, much as it does now under the current system.

*A greater dependence on second-hand goods might occur, since they are exempt, and therefore alter the spending habits of the U.S. consumer.

*There is no cap on the rate that might be imposed by Congress. Just as current income tax rates change, the initial rate of 23% may be changed over time as Congress desires. However, since there is one rate, it would be difficult to engage in class warfare and pit one economic group against another — Congress would raise or lower the rate on everyone. Every citizen has an interest in keeping the rate low.

*It is argued that the FairTax would benefit the wealthy at the expense of the middle class.

==External Links==

*[http://www.fairtax.org/site/PageServer Americans for Fair Taxation]
*[http://www.factcheck.org/taxes/unspinning_the_fairtax.htm FactCheck.org]
 

==References==
<references/>

[[Category: Taxation]]
[[Category: Economics]]

FairTax

2009-06-24T03:45:21Z

Jeffg2: /* Criticism */ Added bit

[[Image:FairTaxRally.jpg|thumb|350px|A pro FairTax rally in Florida]]
The '''FairTax''' is a tax proposal that would replace all federal [[income tax]]es — including corporate, gift, estate, capital gains, alternative minimum, [[Social Security]], [[Medicare]], and self employment taxes — with a federal national retail [[sales tax]]. The tax would be paid on the purchase of all new goods and services, and would be collected at the final point of sale.<ref> Americans For Fair Taxation, “About the FairTax,” http://www.fairtax.org/site/PageServer?pagename=about_main</ref> Thus, instead of taxing "income", the FairTax would tax spending. This is known as a [[consumption tax]] — a method for taxing income on the back end, when the money is spent, rather than when it is earned.

In theory this would also allow the government to secure revenue from those who avoid paying taxes such as drug pushers of prostitutes, but who would still need goods and therefore pay under a FairTax system. The rate for the FairTax as proposed under current legislation is 23 percent of the total payment including the tax ($23 of every $100 spent in total—calculated similar to income taxes).<ref> "Embedded Taxes Change Fair Tax Analysis",http://www.roanoke.com/editorials/commentary/wb/wb/xp-51569</ref> This would be equivalent to a 30 percent traditional sales tax ($23 on top of every $77 spent—$100 total). Although some critics say it would be higher to be revenue neutral (take in the same amount as the current system).<ref> http://www.factcheck.org/taxes/unspinning_the_fairtax.html</ref> The effective tax rate for a family household would be variable due to the fixed monthly tax rebates.

The proposal includes monthly payments to all family households of lawful U.S. residents as an advance rebate, or 'prebate', of tax on purchases up to the poverty level. The rebate is meant to eliminate the taxation of household necessities and make the plan progressive. Used goods, exports, and intermediate business transactions would not be taxed, nor would savings, investments, or education tuition expenses as they would be considered an investment (rather than final consumption). The tax is voluntary to the extent that individual consumers can choose when to increase or decrease their product buying, unlike now, when income taxes are withheld from the paychecks of most workers.

==Proposal==
If passed, the Fair Tax would accomplish the following<ref> American For Fair Taxation, http://www.fairtax.org/site/PageServer?pagename=about_main</ref>:

* Abolish the [[Internal Revenue Service]] (IRS).
* Abolish personal and business [[income tax]]es.
* Calls for the repeal of the [[16th Amendment]].
* Provide each worker a monthly prebate, equal to the tax on "poverty level" income. <ref> Just how fair is the ‘Fair Tax’ CNN Money, September 2005, http://money.cnn.com/2005/09/06/pf/taxes/consumptiontax_0510/</ref>
* Close many loopholes under the current system.
* Enable retirees to receive their full pension, untaxed, until they spend it.
* Enable workers to keep their entire paycheck, untaxed, until they spend it. 
* Proponents believe the removal of the above will save 265 billion dollars a year in compliance costs under the current tax system,<ref>http://www.fairtax.org/site/PageServer?pagename=about_fairtax_four#neutral</ref> and be more practical than the current system, which includes over 60,000 pages of tax code.<ref> 67,204-Page Code Confounds Taxpayers, Yet Congress Sits By, USA Today, http://www.usatoday.com/news/opinion/2007-04-03-edit_N.htm?csp=34 </ref>

==History==

===1994-2005===
[[Image:FairTax vs. Tax Code 2.jpg‎ |thumb|300px|Congressman [[John Linder]], one of the strongest proponents for the FairTax, illustrates the size of the current tax system vs the FairTax method]]
The origins of the FairTax began with a group of businessmen from Houston, Texas, who initially financed what has become the political advocacy group Americans For Fair Taxation (AFFT) or FairTax.org, which has grown into a large grassroots tax reform movement.<ref> Just how fair is the ‘FairTax’ CNN Money, September 2005, http://money.cnn.com/2005/09/06/pf/taxes/consumptiontax_0510/</ref>. The Chairman of AFFT, Leo Linbeck, stated that Americans have to pressure the government to come up with a better way of taxation, he said, “It is painfully obvious that [[Washington, D.C.]] insiders so closely linked with the status quo cannot be trusted to overturn the corrupt system of federal taxation. This effort will have to be driven by the American people<ref>Americans For Fair Taxation http://boortz.com/nuze/200510/10132005.html</ref>." The organization hired experts to look into an idea for a better tax system, they spent 23 million dollars in coming up with the idea of the Fair Tax. Their findings were combined into a book, “The FairTax Book: Saying Goodbye to the Income Tax and the IRS,” which Linbeck co-authored with Republican Congressman John Linder<ref> “The Fair Tax Book”,2005, http://www.amazon.com/Fair-Tax-Book-Saying-Goodbye/dp/0060875496/ref=sr_1_1/102-3275846-3467353?ie=UTF8&s=books&qid=1184106196&sr=1-1</ref>.

The FairTax became popular among free market [[conservative]]s, [[libertarian]]s, and some economists in recent years. The complication and wasted bureaucracy of the [[Internal Revenue Service]], government pressure on citizens to reveal information and records, and the loopholes in the current tax system created the incentive to look for a new way of taxation in the United States. Some [[Democrats]] also sought a tax system that would rid them current income tax, which they claim to be discriminate.

In the last 20 years the [[United States]] tax system has been changed over 14,000 times, this has led to an abundance of complexities which lead to its being an inefficient system. In 2003, United States Senator [[Saxby Chambliss]], a [[Republican]], and Senator [[Zell Miller]] a Democrat; introduced a by-partisan version of the Fair Tax. Although the bill had some support in the [[Senate]], it eventually lost in a 50-50. Senator [[Sam Brownback]] later stated the challenges of tax reform, “When you take (the tax code) on straight on, you take on every lobbyist,"

===2005-2007===

Former Federal Reserve Chairman, [[Alan Greenspan]], called for a federal sales tax to replace the broken income tax in 2005. "Since the exemplary 1986 reform, the tax code has drifted back to be overly complicated and burdened by higher marginal rates and by many special provisions that have undesirably narrowed the tax base," Greenspan stated at a Presidential Advisory counsel<ref>Greenspan: "Consumption Tax COuld Help Economy",http://www.foxnews.com/story/0,2933,149298,00.html</ref>.

In 2005 congress created a bill to enact the FairTax (H.R. 25; Senate Bill 1943), it had the support of more then 54 co-sponsors, and both Senate and House minority leaders [[Dennis Hassert]] and [[Tom DeLay]]<ref>“The FairTax: A Trogan Horse For America,” Jews For Preservation of Firearms Ownership, http://www.jpfo.org/fairtax.htm#fn1</ref>. Although the bill received the most support ever for any fundamental tax reform bill, it failed to pass. After the elections of 2004, Georgia Republican Congressman, [[John Linder]], reintroduced the FairTax on the first day of the 109th congress<ref> “Linder Reintroduces FairTax Legislation”, http://www.johnlinder.com/News_Details.asp?NewsID=128</ref>. Congressman Linder stated before congress, “The time is ripe for fundamental tax and a completely new Federal tax regime. I am pleased to reintroduce my Fair Tax proposal today reform, and look forward to the Congress creating a fairer, simpler tax system that advances our core goals of lower taxes and more freedom for our citizens."<ref> “Linder Reintroduces FairTax Legislation”, http://www.johnlinder.com/News_Details.asp?NewsID=128</ref>.”

In 2007 support for the FairTax bill grew to include 60 co-sponsors<ref>FairTax Gains Support, http://www.fairtaxblog.com/20070508/record-sixty-co-sponsors-for-fairtax-bill-hr-25/</ref>.

One of the most outspoken supporters of the Fair Tax is Republican presidential candidate, [[Mike Huckabee]]. Huckabee has said that the Fair Tax would "put the IRS out of business, but put Americans in business<ref> Massachusetts For Mike Huckabee, http://massachusettsforhuckabee.blogspot.com/search/label/Tax%20Plan</ref>." 

== Supporters and Opponents==

[[Image:Fairtaxb.jpg|right|thumb|200px| A FairTax bus during a rally at the 2007 [[Republican]] [[Iowa Straw Poll]].]]
Most of the support for the FairTax comes from the [[Republican Party]] and the [[Libertarian]]s. A significant number of [[Conservative]]s want Republican presidential candidates to support the FairTax, including one Indiana group called ‘Hoosiers for Fair Taxation’<ref>”FairTax Supporters Vent Frustration”, June 2007, http://www.theindychannel.com/news/13651607/detail.html</ref>. <ref>”FairTaxer's continue to “flex their muscles”, July 2007, http://www.fairtax.org/site/PageServer?pagename=news_feature</ref>. Nevertheless, while the number of the members of Congress who have signed on to the proposal has been growing, it still lacks popular support to be close to passage. Former Arkansas governor and presidential candidate [[Mike Huckabee]] made passage of a national sales tax a part of his platform during his recent bid for office. Former Federal Reserve chief [[Alan Greenspan]] also exhibited support for the FairTax in a recent interview.<ref>Greenspan: Consumption Tax could Help Economy, Fox News, March 2005, http://www.foxnews.com/story/0,2933,149298,00.html</ref>

Of the 2008 Democrat presidential candidates, only Mike Gravel supported the plan. [[Rudy Giuliania]], a one time candidate for President on the Republican side, was hesitant and did not support it.<ref> “Giuliani Jeered For Opposing Flat Tax”, Associated Press, July 2007, http://www.forbes.com/feeds/ap/2007/07/07/ap3891710.html</ref>: "I don't think a Fair Tax is realistic change for America. Our economy is dependent upon the way our tax system operates<ref> “Giuliani Jeered For Opposing Flat Tax”, Associated Press, July 2007, http://www.forbes.com/feeds/ap/2007/07/07/ap3891710.html</ref>

==Criticism==

*Critics contend that the FairTax would have Constitutional issues.

*The FairTax would still have tax evasion. Purchases made overseas, although subject to the tax and collected by the U.S. Customs and Border Protection, would be difficult to track and therefore cheating might occur, much as it does now under the current system.

*A greater dependence on second-hand goods might occur, since they are exempt, and therefore alter the spending habits of the U.S. consumer.

*There is no cap on the rate that might be imposed by Congress. Just as current income tax rates change, the initial rate of 23% may be changed over time as Congress desires. However, since there is one rate, it would be difficult to engage in class warfare and pit one economic group against another - Congress would raise or lower the rate on everyone. Every citizen has an interest in keeping the rate low.

*It is argued that the FairTax would benefit the wealthy at the expense of the middle class.

==External Links==

*[http://www.fairtax.org/site/PageServer Americans for Fair Taxation]
*[http://www.factcheck.org/taxes/unspinning_the_fairtax.htm FactCheck.org]
 

==References==
<references/>

[[Category: Taxation]]
[[Category: Economics]]

FairTax

2009-06-24T03:33:38Z

Jeffg2: /* Criticism */ Supporters don't claim it's an excise... strawman, Overseas purchases - Is this a loophole or just tax evasion?, Blog is not reliable source - research shows it as a wealth tax

[[Image:FairTaxRally.jpg|thumb|350px|A pro FairTax rally in Florida]]
The '''FairTax''' is a tax proposal that would replace all federal [[income tax]]es — including corporate, gift, estate, capital gains, alternative minimum, [[Social Security]], [[Medicare]], and self employment taxes — with a federal national retail [[sales tax]]. The tax would be paid on the purchase of all new goods and services, and would be collected at the final point of sale.<ref> Americans For Fair Taxation, “About the FairTax,” http://www.fairtax.org/site/PageServer?pagename=about_main</ref> Thus, instead of taxing "income", the FairTax would tax spending. This is known as a [[consumption tax]] — a method for taxing income on the back end, when the money is spent, rather than when it is earned.

In theory this would also allow the government to secure revenue from those who avoid paying taxes such as drug pushers of prostitutes, but who would still need goods and therefore pay under a FairTax system. The rate for the FairTax as proposed under current legislation is 23 percent of the total payment including the tax ($23 of every $100 spent in total—calculated similar to income taxes).<ref> "Embedded Taxes Change Fair Tax Analysis",http://www.roanoke.com/editorials/commentary/wb/wb/xp-51569</ref> This would be equivalent to a 30 percent traditional sales tax ($23 on top of every $77 spent—$100 total). Although some critics say it would be higher to be revenue neutral (take in the same amount as the current system).<ref> http://www.factcheck.org/taxes/unspinning_the_fairtax.html</ref> The effective tax rate for a family household would be variable due to the fixed monthly tax rebates.

The proposal includes monthly payments to all family households of lawful U.S. residents as an advance rebate, or 'prebate', of tax on purchases up to the poverty level. The rebate is meant to eliminate the taxation of household necessities and make the plan progressive. Used goods, exports, and intermediate business transactions would not be taxed, nor would savings, investments, or education tuition expenses as they would be considered an investment (rather than final consumption). The tax is voluntary to the extent that individual consumers can choose when to increase or decrease their product buying, unlike now, when income taxes are withheld from the paychecks of most workers.

==Proposal==
If passed, the Fair Tax would accomplish the following<ref> American For Fair Taxation, http://www.fairtax.org/site/PageServer?pagename=about_main</ref>:

* Abolish the [[Internal Revenue Service]] (IRS).
* Abolish personal and business [[income tax]]es.
* Calls for the repeal of the [[16th Amendment]].
* Provide each worker a monthly prebate, equal to the tax on "poverty level" income. <ref> Just how fair is the ‘Fair Tax’ CNN Money, September 2005, http://money.cnn.com/2005/09/06/pf/taxes/consumptiontax_0510/</ref>
* Close many loopholes under the current system.
* Enable retirees to receive their full pension, untaxed, until they spend it.
* Enable workers to keep their entire paycheck, untaxed, until they spend it. 
* Proponents believe the removal of the above will save 265 billion dollars a year in compliance costs under the current tax system,<ref>http://www.fairtax.org/site/PageServer?pagename=about_fairtax_four#neutral</ref> and be more practical than the current system, which includes over 60,000 pages of tax code.<ref> 67,204-Page Code Confounds Taxpayers, Yet Congress Sits By, USA Today, http://www.usatoday.com/news/opinion/2007-04-03-edit_N.htm?csp=34 </ref>

==History==

===1994-2005===
[[Image:FairTax vs. Tax Code 2.jpg‎ |thumb|300px|Congressman [[John Linder]], one of the strongest proponents for the FairTax, illustrates the size of the current tax system vs the FairTax method]]
The origins of the FairTax began with a group of businessmen from Houston, Texas, who initially financed what has become the political advocacy group Americans For Fair Taxation (AFFT) or FairTax.org, which has grown into a large grassroots tax reform movement.<ref> Just how fair is the ‘FairTax’ CNN Money, September 2005, http://money.cnn.com/2005/09/06/pf/taxes/consumptiontax_0510/</ref>. The Chairman of AFFT, Leo Linbeck, stated that Americans have to pressure the government to come up with a better way of taxation, he said, “It is painfully obvious that [[Washington, D.C.]] insiders so closely linked with the status quo cannot be trusted to overturn the corrupt system of federal taxation. This effort will have to be driven by the American people<ref>Americans For Fair Taxation http://boortz.com/nuze/200510/10132005.html</ref>." The organization hired experts to look into an idea for a better tax system, they spent 23 million dollars in coming up with the idea of the Fair Tax. Their findings were combined into a book, “The FairTax Book: Saying Goodbye to the Income Tax and the IRS,” which Linbeck co-authored with Republican Congressman John Linder<ref> “The Fair Tax Book”,2005, http://www.amazon.com/Fair-Tax-Book-Saying-Goodbye/dp/0060875496/ref=sr_1_1/102-3275846-3467353?ie=UTF8&s=books&qid=1184106196&sr=1-1</ref>.

The FairTax became popular among free market [[conservative]]s, [[libertarian]]s, and some economists in recent years. The complication and wasted bureaucracy of the [[Internal Revenue Service]], government pressure on citizens to reveal information and records, and the loopholes in the current tax system created the incentive to look for a new way of taxation in the United States. Some [[Democrats]] also sought a tax system that would rid them current income tax, which they claim to be discriminate.

In the last 20 years the [[United States]] tax system has been changed over 14,000 times, this has led to an abundance of complexities which lead to its being an inefficient system. In 2003, United States Senator [[Saxby Chambliss]], a [[Republican]], and Senator [[Zell Miller]] a Democrat; introduced a by-partisan version of the Fair Tax. Although the bill had some support in the [[Senate]], it eventually lost in a 50-50. Senator [[Sam Brownback]] later stated the challenges of tax reform, “When you take (the tax code) on straight on, you take on every lobbyist,"

===2005-2007===

Former Federal Reserve Chairman, [[Alan Greenspan]], called for a federal sales tax to replace the broken income tax in 2005. "Since the exemplary 1986 reform, the tax code has drifted back to be overly complicated and burdened by higher marginal rates and by many special provisions that have undesirably narrowed the tax base," Greenspan stated at a Presidential Advisory counsel<ref>Greenspan: "Consumption Tax COuld Help Economy",http://www.foxnews.com/story/0,2933,149298,00.html</ref>.

In 2005 congress created a bill to enact the FairTax (H.R. 25; Senate Bill 1943), it had the support of more then 54 co-sponsors, and both Senate and House minority leaders [[Dennis Hassert]] and [[Tom DeLay]]<ref>“The FairTax: A Trogan Horse For America,” Jews For Preservation of Firearms Ownership, http://www.jpfo.org/fairtax.htm#fn1</ref>. Although the bill received the most support ever for any fundamental tax reform bill, it failed to pass. After the elections of 2004, Georgia Republican Congressman, [[John Linder]], reintroduced the FairTax on the first day of the 109th congress<ref> “Linder Reintroduces FairTax Legislation”, http://www.johnlinder.com/News_Details.asp?NewsID=128</ref>. Congressman Linder stated before congress, “The time is ripe for fundamental tax and a completely new Federal tax regime. I am pleased to reintroduce my Fair Tax proposal today reform, and look forward to the Congress creating a fairer, simpler tax system that advances our core goals of lower taxes and more freedom for our citizens."<ref> “Linder Reintroduces FairTax Legislation”, http://www.johnlinder.com/News_Details.asp?NewsID=128</ref>.”

In 2007 support for the FairTax bill grew to include 60 co-sponsors<ref>FairTax Gains Support, http://www.fairtaxblog.com/20070508/record-sixty-co-sponsors-for-fairtax-bill-hr-25/</ref>.

One of the most outspoken supporters of the Fair Tax is Republican presidential candidate, [[Mike Huckabee]]. Huckabee has said that the Fair Tax would "put the IRS out of business, but put Americans in business<ref> Massachusetts For Mike Huckabee, http://massachusettsforhuckabee.blogspot.com/search/label/Tax%20Plan</ref>." 

== Supporters and Opponents==

[[Image:Fairtaxb.jpg|right|thumb|200px| A FairTax bus during a rally at the 2007 [[Republican]] [[Iowa Straw Poll]].]]
Most of the support for the FairTax comes from the [[Republican Party]] and the [[Libertarian]]s. A significant number of [[Conservative]]s want Republican presidential candidates to support the FairTax, including one Indiana group called ‘Hoosiers for Fair Taxation’<ref>”FairTax Supporters Vent Frustration”, June 2007, http://www.theindychannel.com/news/13651607/detail.html</ref>. <ref>”FairTaxer's continue to “flex their muscles”, July 2007, http://www.fairtax.org/site/PageServer?pagename=news_feature</ref>. Nevertheless, while the number of the members of Congress who have signed on to the proposal has been growing, it still lacks popular support to be close to passage. Former Arkansas governor and presidential candidate [[Mike Huckabee]] made passage of a national sales tax a part of his platform during his recent bid for office. Former Federal Reserve chief [[Alan Greenspan]] also exhibited support for the FairTax in a recent interview.<ref>Greenspan: Consumption Tax could Help Economy, Fox News, March 2005, http://www.foxnews.com/story/0,2933,149298,00.html</ref>

Of the 2008 Democrat presidential candidates, only Mike Gravel supported the plan. [[Rudy Giuliania]], a one time candidate for President on the Republican side, was hesitant and did not support it.<ref> “Giuliani Jeered For Opposing Flat Tax”, Associated Press, July 2007, http://www.forbes.com/feeds/ap/2007/07/07/ap3891710.html</ref>: "I don't think a Fair Tax is realistic change for America. Our economy is dependent upon the way our tax system operates<ref> “Giuliani Jeered For Opposing Flat Tax”, Associated Press, July 2007, http://www.forbes.com/feeds/ap/2007/07/07/ap3891710.html</ref>

==Criticism==

*Critics contend that the FairTax would have Constitutional issues.

*The FairTax would still have tax evasion. Purchases made overseas, although subject to the tax and collected by the U.S. Customs and Border Protection, would be difficult to track and therefore cheating might occur, much as it does now under the current system.

*A greater dependence on second-hand goods might occur, since they are exempt, and therefore alter the spending habits of the U.S. consumer.

*There is no cap on the rate that might be imposed by Congress. Just as current income tax rates change, the initial rate of 23% may be changed over time as Congress desires. However, since there is one rate, it would be difficult to engage in class warfare and pit one economic group against another.

*It is argued that the FairTax would benefit the wealthy at the expense of the middle class.

==External Links==

*[http://www.fairtax.org/site/PageServer Americans for Fair Taxation]
*[http://www.factcheck.org/taxes/unspinning_the_fairtax.htm FactCheck.org]
 

==References==
<references/>

[[Category: Taxation]]
[[Category: Economics]]

FairTax

2009-06-24T03:26:12Z

Jeffg2: /* Supporters and Opponents */ Restated this after deleting a portion of it earlier

[[Image:FairTaxRally.jpg|thumb|350px|A pro FairTax rally in Florida]]
The '''FairTax''' is a tax proposal that would replace all federal [[income tax]]es — including corporate, gift, estate, capital gains, alternative minimum, [[Social Security]], [[Medicare]], and self employment taxes — with a federal national retail [[sales tax]]. The tax would be paid on the purchase of all new goods and services, and would be collected at the final point of sale.<ref> Americans For Fair Taxation, “About the FairTax,” http://www.fairtax.org/site/PageServer?pagename=about_main</ref> Thus, instead of taxing "income", the FairTax would tax spending. This is known as a [[consumption tax]] — a method for taxing income on the back end, when the money is spent, rather than when it is earned.

In theory this would also allow the government to secure revenue from those who avoid paying taxes such as drug pushers of prostitutes, but who would still need goods and therefore pay under a FairTax system. The rate for the FairTax as proposed under current legislation is 23 percent of the total payment including the tax ($23 of every $100 spent in total—calculated similar to income taxes).<ref> "Embedded Taxes Change Fair Tax Analysis",http://www.roanoke.com/editorials/commentary/wb/wb/xp-51569</ref> This would be equivalent to a 30 percent traditional sales tax ($23 on top of every $77 spent—$100 total). Although some critics say it would be higher to be revenue neutral (take in the same amount as the current system).<ref> http://www.factcheck.org/taxes/unspinning_the_fairtax.html</ref> The effective tax rate for a family household would be variable due to the fixed monthly tax rebates.

The proposal includes monthly payments to all family households of lawful U.S. residents as an advance rebate, or 'prebate', of tax on purchases up to the poverty level. The rebate is meant to eliminate the taxation of household necessities and make the plan progressive. Used goods, exports, and intermediate business transactions would not be taxed, nor would savings, investments, or education tuition expenses as they would be considered an investment (rather than final consumption). The tax is voluntary to the extent that individual consumers can choose when to increase or decrease their product buying, unlike now, when income taxes are withheld from the paychecks of most workers.

==Proposal==
If passed, the Fair Tax would accomplish the following<ref> American For Fair Taxation, http://www.fairtax.org/site/PageServer?pagename=about_main</ref>:

* Abolish the [[Internal Revenue Service]] (IRS).
* Abolish personal and business [[income tax]]es.
* Calls for the repeal of the [[16th Amendment]].
* Provide each worker a monthly prebate, equal to the tax on "poverty level" income. <ref> Just how fair is the ‘Fair Tax’ CNN Money, September 2005, http://money.cnn.com/2005/09/06/pf/taxes/consumptiontax_0510/</ref>
* Close many loopholes under the current system.
* Enable retirees to receive their full pension, untaxed, until they spend it.
* Enable workers to keep their entire paycheck, untaxed, until they spend it. 
* Proponents believe the removal of the above will save 265 billion dollars a year in compliance costs under the current tax system,<ref>http://www.fairtax.org/site/PageServer?pagename=about_fairtax_four#neutral</ref> and be more practical than the current system, which includes over 60,000 pages of tax code.<ref> 67,204-Page Code Confounds Taxpayers, Yet Congress Sits By, USA Today, http://www.usatoday.com/news/opinion/2007-04-03-edit_N.htm?csp=34 </ref>

==History==

===1994-2005===
[[Image:FairTax vs. Tax Code 2.jpg‎ |thumb|300px|Congressman [[John Linder]], one of the strongest proponents for the FairTax, illustrates the size of the current tax system vs the FairTax method]]
The origins of the FairTax began with a group of businessmen from Houston, Texas, who initially financed what has become the political advocacy group Americans For Fair Taxation (AFFT) or FairTax.org, which has grown into a large grassroots tax reform movement.<ref> Just how fair is the ‘FairTax’ CNN Money, September 2005, http://money.cnn.com/2005/09/06/pf/taxes/consumptiontax_0510/</ref>. The Chairman of AFFT, Leo Linbeck, stated that Americans have to pressure the government to come up with a better way of taxation, he said, “It is painfully obvious that [[Washington, D.C.]] insiders so closely linked with the status quo cannot be trusted to overturn the corrupt system of federal taxation. This effort will have to be driven by the American people<ref>Americans For Fair Taxation http://boortz.com/nuze/200510/10132005.html</ref>." The organization hired experts to look into an idea for a better tax system, they spent 23 million dollars in coming up with the idea of the Fair Tax. Their findings were combined into a book, “The FairTax Book: Saying Goodbye to the Income Tax and the IRS,” which Linbeck co-authored with Republican Congressman John Linder<ref> “The Fair Tax Book”,2005, http://www.amazon.com/Fair-Tax-Book-Saying-Goodbye/dp/0060875496/ref=sr_1_1/102-3275846-3467353?ie=UTF8&s=books&qid=1184106196&sr=1-1</ref>.

The FairTax became popular among free market [[conservative]]s, [[libertarian]]s, and some economists in recent years. The complication and wasted bureaucracy of the [[Internal Revenue Service]], government pressure on citizens to reveal information and records, and the loopholes in the current tax system created the incentive to look for a new way of taxation in the United States. Some [[Democrats]] also sought a tax system that would rid them current income tax, which they claim to be discriminate.

In the last 20 years the [[United States]] tax system has been changed over 14,000 times, this has led to an abundance of complexities which lead to its being an inefficient system. In 2003, United States Senator [[Saxby Chambliss]], a [[Republican]], and Senator [[Zell Miller]] a Democrat; introduced a by-partisan version of the Fair Tax. Although the bill had some support in the [[Senate]], it eventually lost in a 50-50. Senator [[Sam Brownback]] later stated the challenges of tax reform, “When you take (the tax code) on straight on, you take on every lobbyist,"

===2005-2007===

Former Federal Reserve Chairman, [[Alan Greenspan]], called for a federal sales tax to replace the broken income tax in 2005. "Since the exemplary 1986 reform, the tax code has drifted back to be overly complicated and burdened by higher marginal rates and by many special provisions that have undesirably narrowed the tax base," Greenspan stated at a Presidential Advisory counsel<ref>Greenspan: "Consumption Tax COuld Help Economy",http://www.foxnews.com/story/0,2933,149298,00.html</ref>.

In 2005 congress created a bill to enact the FairTax (H.R. 25; Senate Bill 1943), it had the support of more then 54 co-sponsors, and both Senate and House minority leaders [[Dennis Hassert]] and [[Tom DeLay]]<ref>“The FairTax: A Trogan Horse For America,” Jews For Preservation of Firearms Ownership, http://www.jpfo.org/fairtax.htm#fn1</ref>. Although the bill received the most support ever for any fundamental tax reform bill, it failed to pass. After the elections of 2004, Georgia Republican Congressman, [[John Linder]], reintroduced the FairTax on the first day of the 109th congress<ref> “Linder Reintroduces FairTax Legislation”, http://www.johnlinder.com/News_Details.asp?NewsID=128</ref>. Congressman Linder stated before congress, “The time is ripe for fundamental tax and a completely new Federal tax regime. I am pleased to reintroduce my Fair Tax proposal today reform, and look forward to the Congress creating a fairer, simpler tax system that advances our core goals of lower taxes and more freedom for our citizens."<ref> “Linder Reintroduces FairTax Legislation”, http://www.johnlinder.com/News_Details.asp?NewsID=128</ref>.”

In 2007 support for the FairTax bill grew to include 60 co-sponsors<ref>FairTax Gains Support, http://www.fairtaxblog.com/20070508/record-sixty-co-sponsors-for-fairtax-bill-hr-25/</ref>.

One of the most outspoken supporters of the Fair Tax is Republican presidential candidate, [[Mike Huckabee]]. Huckabee has said that the Fair Tax would "put the IRS out of business, but put Americans in business<ref> Massachusetts For Mike Huckabee, http://massachusettsforhuckabee.blogspot.com/search/label/Tax%20Plan</ref>." 

== Supporters and Opponents==

[[Image:Fairtaxb.jpg|right|thumb|200px| A FairTax bus during a rally at the 2007 [[Republican]] [[Iowa Straw Poll]].]]
Most of the support for the FairTax comes from the [[Republican Party]] and the [[Libertarian]]s. A significant number of [[Conservative]]s want Republican presidential candidates to support the FairTax, including one Indiana group called ‘Hoosiers for Fair Taxation’<ref>”FairTax Supporters Vent Frustration”, June 2007, http://www.theindychannel.com/news/13651607/detail.html</ref>. <ref>”FairTaxer's continue to “flex their muscles”, July 2007, http://www.fairtax.org/site/PageServer?pagename=news_feature</ref>. Nevertheless, while the number of the members of Congress who have signed on to the proposal has been growing, it still lacks popular support to be close to passage. Former Arkansas governor and presidential candidate [[Mike Huckabee]] made passage of a national sales tax a part of his platform during his recent bid for office. Former Federal Reserve chief [[Alan Greenspan]] also exhibited support for the FairTax in a recent interview.<ref>Greenspan: Consumption Tax could Help Economy, Fox News, March 2005, http://www.foxnews.com/story/0,2933,149298,00.html</ref>

Of the 2008 Democrat presidential candidates, only Mike Gravel supported the plan. [[Rudy Giuliania]], a one time candidate for President on the Republican side, was hesitant and did not support it.<ref> “Giuliani Jeered For Opposing Flat Tax”, Associated Press, July 2007, http://www.forbes.com/feeds/ap/2007/07/07/ap3891710.html</ref>: "I don't think a Fair Tax is realistic change for America. Our economy is dependent upon the way our tax system operates<ref> “Giuliani Jeered For Opposing Flat Tax”, Associated Press, July 2007, http://www.forbes.com/feeds/ap/2007/07/07/ap3891710.html</ref>

==Criticism==

*Critics contend that the FairTax would have Constitutional issues. Supporters have painted the tax as an "[[excise]]", but opponents question this view believeing that an excise is a tax that is strictly limited to privileged or luxury goods and activities. They believe this view is confimed in other court rulings.<ref>http://www.conservapedia.com/Excise</ref> and the FairTax, including necessities, would therefore make it a [[Direct tax]], and not allowed under law. In ''Brushaber v. Union Pacific Railroad Co.'' (1916), the Supreme Court ruled that whenever any "[[excise]]" morphs into a tax on items of common right (such as anything necessary to preserve and carry out a normal life) "the duty would arise to disregard form and consider substance alone, and hence subject the tax to the regulation as to apportionment which otherwise as an excise would not apply to it."

*The FairTax would fail to close all loopholes. Purchases made overseas, although subject to the tax, would be difficult to track and therefore cheating might occur, much as it does now under the current system.

*A greater dependence on second-hand goods might occur, since they are exempt, and therefore alter the spending habits of the U.S. consumer.

*There is no cap on the rate that might be imposed by Congress. Just as current income tax rates change, the initial rate of 23% may be changed over time as Congress desires.

*It is argued that the FairTax would benefit the wealthy at the expense of the middle class. "It's these precious few people who control so much of this country's wealth that this tax is intended to benefit the most, since they actual(ly) spend a very small part of their personal wealth."<ref>http://www.cogitamusblog.com/2008/01/national-sales.html</ref>

==External Links==

*[http://www.fairtax.org/site/PageServer Americans for Fair Taxation]
*[http://www.factcheck.org/taxes/unspinning_the_fairtax.htm FactCheck.org]
 

==References==
<references/>

[[Category: Taxation]]
[[Category: Economics]]

FairTax

2009-06-24T03:23:14Z

Jeffg2: /* 1986-2005 */ The ties to the Scientology and CATS are weak and disputed, requires more content if included

[[Image:FairTaxRally.jpg|thumb|350px|A pro FairTax rally in Florida]]
The '''FairTax''' is a tax proposal that would replace all federal [[income tax]]es — including corporate, gift, estate, capital gains, alternative minimum, [[Social Security]], [[Medicare]], and self employment taxes — with a federal national retail [[sales tax]]. The tax would be paid on the purchase of all new goods and services, and would be collected at the final point of sale.<ref> Americans For Fair Taxation, “About the FairTax,” http://www.fairtax.org/site/PageServer?pagename=about_main</ref> Thus, instead of taxing "income", the FairTax would tax spending. This is known as a [[consumption tax]] — a method for taxing income on the back end, when the money is spent, rather than when it is earned.

In theory this would also allow the government to secure revenue from those who avoid paying taxes such as drug pushers of prostitutes, but who would still need goods and therefore pay under a FairTax system. The rate for the FairTax as proposed under current legislation is 23 percent of the total payment including the tax ($23 of every $100 spent in total—calculated similar to income taxes).<ref> "Embedded Taxes Change Fair Tax Analysis",http://www.roanoke.com/editorials/commentary/wb/wb/xp-51569</ref> This would be equivalent to a 30 percent traditional sales tax ($23 on top of every $77 spent—$100 total). Although some critics say it would be higher to be revenue neutral (take in the same amount as the current system).<ref> http://www.factcheck.org/taxes/unspinning_the_fairtax.html</ref> The effective tax rate for a family household would be variable due to the fixed monthly tax rebates.

The proposal includes monthly payments to all family households of lawful U.S. residents as an advance rebate, or 'prebate', of tax on purchases up to the poverty level. The rebate is meant to eliminate the taxation of household necessities and make the plan progressive. Used goods, exports, and intermediate business transactions would not be taxed, nor would savings, investments, or education tuition expenses as they would be considered an investment (rather than final consumption). The tax is voluntary to the extent that individual consumers can choose when to increase or decrease their product buying, unlike now, when income taxes are withheld from the paychecks of most workers.

==Proposal==
If passed, the Fair Tax would accomplish the following<ref> American For Fair Taxation, http://www.fairtax.org/site/PageServer?pagename=about_main</ref>:

* Abolish the [[Internal Revenue Service]] (IRS).
* Abolish personal and business [[income tax]]es.
* Calls for the repeal of the [[16th Amendment]].
* Provide each worker a monthly prebate, equal to the tax on "poverty level" income. <ref> Just how fair is the ‘Fair Tax’ CNN Money, September 2005, http://money.cnn.com/2005/09/06/pf/taxes/consumptiontax_0510/</ref>
* Close many loopholes under the current system.
* Enable retirees to receive their full pension, untaxed, until they spend it.
* Enable workers to keep their entire paycheck, untaxed, until they spend it. 
* Proponents believe the removal of the above will save 265 billion dollars a year in compliance costs under the current tax system,<ref>http://www.fairtax.org/site/PageServer?pagename=about_fairtax_four#neutral</ref> and be more practical than the current system, which includes over 60,000 pages of tax code.<ref> 67,204-Page Code Confounds Taxpayers, Yet Congress Sits By, USA Today, http://www.usatoday.com/news/opinion/2007-04-03-edit_N.htm?csp=34 </ref>

==History==

===1994-2005===
[[Image:FairTax vs. Tax Code 2.jpg‎ |thumb|300px|Congressman [[John Linder]], one of the strongest proponents for the FairTax, illustrates the size of the current tax system vs the FairTax method]]
The origins of the FairTax began with a group of businessmen from Houston, Texas, who initially financed what has become the political advocacy group Americans For Fair Taxation (AFFT) or FairTax.org, which has grown into a large grassroots tax reform movement.<ref> Just how fair is the ‘FairTax’ CNN Money, September 2005, http://money.cnn.com/2005/09/06/pf/taxes/consumptiontax_0510/</ref>. The Chairman of AFFT, Leo Linbeck, stated that Americans have to pressure the government to come up with a better way of taxation, he said, “It is painfully obvious that [[Washington, D.C.]] insiders so closely linked with the status quo cannot be trusted to overturn the corrupt system of federal taxation. This effort will have to be driven by the American people<ref>Americans For Fair Taxation http://boortz.com/nuze/200510/10132005.html</ref>." The organization hired experts to look into an idea for a better tax system, they spent 23 million dollars in coming up with the idea of the Fair Tax. Their findings were combined into a book, “The FairTax Book: Saying Goodbye to the Income Tax and the IRS,” which Linbeck co-authored with Republican Congressman John Linder<ref> “The Fair Tax Book”,2005, http://www.amazon.com/Fair-Tax-Book-Saying-Goodbye/dp/0060875496/ref=sr_1_1/102-3275846-3467353?ie=UTF8&s=books&qid=1184106196&sr=1-1</ref>.

The FairTax became popular among free market [[conservative]]s, [[libertarian]]s, and some economists in recent years. The complication and wasted bureaucracy of the [[Internal Revenue Service]], government pressure on citizens to reveal information and records, and the loopholes in the current tax system created the incentive to look for a new way of taxation in the United States. Some [[Democrats]] also sought a tax system that would rid them current income tax, which they claim to be discriminate.

In the last 20 years the [[United States]] tax system has been changed over 14,000 times, this has led to an abundance of complexities which lead to its being an inefficient system. In 2003, United States Senator [[Saxby Chambliss]], a [[Republican]], and Senator [[Zell Miller]] a Democrat; introduced a by-partisan version of the Fair Tax. Although the bill had some support in the [[Senate]], it eventually lost in a 50-50. Senator [[Sam Brownback]] later stated the challenges of tax reform, “When you take (the tax code) on straight on, you take on every lobbyist,"

===2005-2007===

Former Federal Reserve Chairman, [[Alan Greenspan]], called for a federal sales tax to replace the broken income tax in 2005. "Since the exemplary 1986 reform, the tax code has drifted back to be overly complicated and burdened by higher marginal rates and by many special provisions that have undesirably narrowed the tax base," Greenspan stated at a Presidential Advisory counsel<ref>Greenspan: "Consumption Tax COuld Help Economy",http://www.foxnews.com/story/0,2933,149298,00.html</ref>.

In 2005 congress created a bill to enact the FairTax (H.R. 25; Senate Bill 1943), it had the support of more then 54 co-sponsors, and both Senate and House minority leaders [[Dennis Hassert]] and [[Tom DeLay]]<ref>“The FairTax: A Trogan Horse For America,” Jews For Preservation of Firearms Ownership, http://www.jpfo.org/fairtax.htm#fn1</ref>. Although the bill received the most support ever for any fundamental tax reform bill, it failed to pass. After the elections of 2004, Georgia Republican Congressman, [[John Linder]], reintroduced the FairTax on the first day of the 109th congress<ref> “Linder Reintroduces FairTax Legislation”, http://www.johnlinder.com/News_Details.asp?NewsID=128</ref>. Congressman Linder stated before congress, “The time is ripe for fundamental tax and a completely new Federal tax regime. I am pleased to reintroduce my Fair Tax proposal today reform, and look forward to the Congress creating a fairer, simpler tax system that advances our core goals of lower taxes and more freedom for our citizens."<ref> “Linder Reintroduces FairTax Legislation”, http://www.johnlinder.com/News_Details.asp?NewsID=128</ref>.”

In 2007 support for the FairTax bill grew to include 60 co-sponsors<ref>FairTax Gains Support, http://www.fairtaxblog.com/20070508/record-sixty-co-sponsors-for-fairtax-bill-hr-25/</ref>.

One of the most outspoken supporters of the Fair Tax is Republican presidential candidate, [[Mike Huckabee]]. Huckabee has said that the Fair Tax would "put the IRS out of business, but put Americans in business<ref> Massachusetts For Mike Huckabee, http://massachusettsforhuckabee.blogspot.com/search/label/Tax%20Plan</ref>." 

== Supporters and Opponents==

[[Image:Fairtaxb.jpg|right|thumb|200px| A FairTax bus during a rally at the 2007 [[Republican]] [[Iowa Straw Poll]].]]
Most of the support for the FairTax comes from the [[Republican Party]] and the [[Libertarian]]s. A significant number of [[Conservative]]s want Republican presidential candidates to support the FairTax, including one Indiana group called ‘Hoosiers for Fair Taxation’<ref>”FairTax Supporters Vent Frustration”, June 2007, http://www.theindychannel.com/news/13651607/detail.html</ref>. <ref>”FairTaxer's continue to “flex their muscles”, July 2007, http://www.fairtax.org/site/PageServer?pagename=news_feature</ref>. Nevertheless, while the number of the members of Congress who have signed on to the proposal has been growing, it still lacks popular support to be close to passage. Former Arkansas governor and presidential candidate [[Mike Huckabee]] made passage of a national sales tax a part of his platform during his recent bid for office. Former Federal Reserve chief [[Alan Greenspan]] also exhibited support for the FairTax in a recent interview.<ref>Greenspan: Consumption Tax could Help Economy, Fox News, March 2005, http://www.foxnews.com/story/0,2933,149298,00.html</ref>

[[Rudy Giuliania]], a one time candidate for President on the Republican side, was also hesitant and did not support it.<ref> “Giuliani Jeered For Opposing Flat Tax”, Associated Press, July 2007, http://www.forbes.com/feeds/ap/2007/07/07/ap3891710.html</ref>: "I don't think a Fair Tax is realistic change for America. Our economy is dependent upon the way our tax system operates<ref> “Giuliani Jeered For Opposing Flat Tax”, Associated Press, July 2007, http://www.forbes.com/feeds/ap/2007/07/07/ap3891710.html</ref>

==Criticism==

*Critics contend that the FairTax would have Constitutional issues. Supporters have painted the tax as an "[[excise]]", but opponents question this view believeing that an excise is a tax that is strictly limited to privileged or luxury goods and activities. They believe this view is confimed in other court rulings.<ref>http://www.conservapedia.com/Excise</ref> and the FairTax, including necessities, would therefore make it a [[Direct tax]], and not allowed under law. In ''Brushaber v. Union Pacific Railroad Co.'' (1916), the Supreme Court ruled that whenever any "[[excise]]" morphs into a tax on items of common right (such as anything necessary to preserve and carry out a normal life) "the duty would arise to disregard form and consider substance alone, and hence subject the tax to the regulation as to apportionment which otherwise as an excise would not apply to it."

*The FairTax would fail to close all loopholes. Purchases made overseas, although subject to the tax, would be difficult to track and therefore cheating might occur, much as it does now under the current system.

*A greater dependence on second-hand goods might occur, since they are exempt, and therefore alter the spending habits of the U.S. consumer.

*There is no cap on the rate that might be imposed by Congress. Just as current income tax rates change, the initial rate of 23% may be changed over time as Congress desires.

*It is argued that the FairTax would benefit the wealthy at the expense of the middle class. "It's these precious few people who control so much of this country's wealth that this tax is intended to benefit the most, since they actual(ly) spend a very small part of their personal wealth."<ref>http://www.cogitamusblog.com/2008/01/national-sales.html</ref>

==External Links==

*[http://www.fairtax.org/site/PageServer Americans for Fair Taxation]
*[http://www.factcheck.org/taxes/unspinning_the_fairtax.htm FactCheck.org]
 

==References==
<references/>

[[Category: Taxation]]
[[Category: Economics]]

FairTax

2009-06-24T03:16:15Z

Jeffg2: /* Proposal */ and business...

[[Image:FairTaxRally.jpg|thumb|350px|A pro FairTax rally in Florida]]
The '''FairTax''' is a tax proposal that would replace all federal [[income tax]]es — including corporate, gift, estate, capital gains, alternative minimum, [[Social Security]], [[Medicare]], and self employment taxes — with a federal national retail [[sales tax]]. The tax would be paid on the purchase of all new goods and services, and would be collected at the final point of sale.<ref> Americans For Fair Taxation, “About the FairTax,” http://www.fairtax.org/site/PageServer?pagename=about_main</ref> Thus, instead of taxing "income", the FairTax would tax spending. This is known as a [[consumption tax]] — a method for taxing income on the back end, when the money is spent, rather than when it is earned.

In theory this would also allow the government to secure revenue from those who avoid paying taxes such as drug pushers of prostitutes, but who would still need goods and therefore pay under a FairTax system. The rate for the FairTax as proposed under current legislation is 23 percent of the total payment including the tax ($23 of every $100 spent in total—calculated similar to income taxes).<ref> "Embedded Taxes Change Fair Tax Analysis",http://www.roanoke.com/editorials/commentary/wb/wb/xp-51569</ref> This would be equivalent to a 30 percent traditional sales tax ($23 on top of every $77 spent—$100 total). Although some critics say it would be higher to be revenue neutral (take in the same amount as the current system).<ref> http://www.factcheck.org/taxes/unspinning_the_fairtax.html</ref> The effective tax rate for a family household would be variable due to the fixed monthly tax rebates.

The proposal includes monthly payments to all family households of lawful U.S. residents as an advance rebate, or 'prebate', of tax on purchases up to the poverty level. The rebate is meant to eliminate the taxation of household necessities and make the plan progressive. Used goods, exports, and intermediate business transactions would not be taxed, nor would savings, investments, or education tuition expenses as they would be considered an investment (rather than final consumption). The tax is voluntary to the extent that individual consumers can choose when to increase or decrease their product buying, unlike now, when income taxes are withheld from the paychecks of most workers.

==Proposal==
If passed, the Fair Tax would accomplish the following<ref> American For Fair Taxation, http://www.fairtax.org/site/PageServer?pagename=about_main</ref>:

* Abolish the [[Internal Revenue Service]] (IRS).
* Abolish personal and business [[income tax]]es.
* Calls for the repeal of the [[16th Amendment]].
* Provide each worker a monthly prebate, equal to the tax on "poverty level" income. <ref> Just how fair is the ‘Fair Tax’ CNN Money, September 2005, http://money.cnn.com/2005/09/06/pf/taxes/consumptiontax_0510/</ref>
* Close many loopholes under the current system.
* Enable retirees to receive their full pension, untaxed, until they spend it.
* Enable workers to keep their entire paycheck, untaxed, until they spend it. 
* Proponents believe the removal of the above will save 265 billion dollars a year in compliance costs under the current tax system,<ref>http://www.fairtax.org/site/PageServer?pagename=about_fairtax_four#neutral</ref> and be more practical than the current system, which includes over 60,000 pages of tax code.<ref> 67,204-Page Code Confounds Taxpayers, Yet Congress Sits By, USA Today, http://www.usatoday.com/news/opinion/2007-04-03-edit_N.htm?csp=34 </ref>

==History==

===1986-2005===
[[Image:FairTax vs. Tax Code 2.jpg‎ |thumb|300px|Congressman [[John Linder]], one of the strongest proponents for the FairTax, illustrates the size of the current tax system vs the FairTax method]]
The modern Fair Tax idea was originally the brain-child of the [[Scientologist]]s, as part of their ongoing battle with the IRS. The most popular of initial plans for the Fair Tax was designed by [[Americans for Fair Taxation]] (AFFT), which is led by businessman Leo Linbeck<ref> Just how fair is the ‘FairTax’ CNN Money, September 2005, http://money.cnn.com/2005/09/06/pf/taxes/consumptiontax_0510/</ref>. Linbeck stated that Americans have to pressure the government to come up with a better way of taxation, he said, “It is painfully obvious that [[Washington, D.C.]] insiders so closely linked with the status quo cannot be trusted to overturn the corrupt system of federal taxation. This effort will have to be driven by the American people<ref>Americans For Fair Taxation http://boortz.com/nuze/200510/10132005.html</ref>." The organization hired experts to look into an idea for a better tax system, they spent 23 million dollars in coming up with the idea of the Fair Tax. Their findings were combined into a book, “The FairTax Book: Saying Goodbye to the Income Tax and the IRS,” which Linbeck co-authored with Republican Congressman John Linder<ref> “The Fair Tax Book”,2005, http://www.amazon.com/Fair-Tax-Book-Saying-Goodbye/dp/0060875496/ref=sr_1_1/102-3275846-3467353?ie=UTF8&s=books&qid=1184106196&sr=1-1</ref>.

The FairTax became popular among free market [[conservative]]s, [[libertarian]]s, and some economists in recent years. The complication and wasted bureaucracy of the [[Internal Revenue Service]], government pressure on citizens to reveal information and records, and the loopholes in the current tax system created the incentive to look for a new way of taxation in the United States. Some [[Democrats]] also sought a tax system that would rid them current income tax, which they claim to be discriminate.

In the last 20 years the [[United States]] tax system has been changed over 14,000 times, this has led to an abundance of complexities which lead to its being an inefficient system. In 2003, United States Senator [[Saxby Chambliss]], a [[Republican]], and Senator [[Zell Miller]] a Democrat; introduced a by-partisan version of the Fair Tax. Although the bill had some support in the [[Senate]], it eventually lost in a 50-50. Senator [[Sam Brownback]] later stated the challenges of tax reform, “When you take (the tax code) on straight on, you take on every lobbyist,"

===2005-2007===

Former Federal Reserve Chairman, [[Alan Greenspan]], called for a federal sales tax to replace the broken income tax in 2005. "Since the exemplary 1986 reform, the tax code has drifted back to be overly complicated and burdened by higher marginal rates and by many special provisions that have undesirably narrowed the tax base," Greenspan stated at a Presidential Advisory counsel<ref>Greenspan: "Consumption Tax COuld Help Economy",http://www.foxnews.com/story/0,2933,149298,00.html</ref>.

In 2005 congress created a bill to enact the FairTax (H.R. 25; Senate Bill 1943), it had the support of more then 54 co-sponsors, and both Senate and House minority leaders [[Dennis Hassert]] and [[Tom DeLay]]<ref>“The FairTax: A Trogan Horse For America,” Jews For Preservation of Firearms Ownership, http://www.jpfo.org/fairtax.htm#fn1</ref>. Although the bill received the most support ever for any fundamental tax reform bill, it failed to pass. After the elections of 2004, Georgia Republican Congressman, [[John Linder]], reintroduced the FairTax on the first day of the 109th congress<ref> “Linder Reintroduces FairTax Legislation”, http://www.johnlinder.com/News_Details.asp?NewsID=128</ref>. Congressman Linder stated before congress, “The time is ripe for fundamental tax and a completely new Federal tax regime. I am pleased to reintroduce my Fair Tax proposal today reform, and look forward to the Congress creating a fairer, simpler tax system that advances our core goals of lower taxes and more freedom for our citizens."<ref> “Linder Reintroduces FairTax Legislation”, http://www.johnlinder.com/News_Details.asp?NewsID=128</ref>.”

In 2007 support for the FairTax bill grew to include 60 co-sponsors<ref>FairTax Gains Support, http://www.fairtaxblog.com/20070508/record-sixty-co-sponsors-for-fairtax-bill-hr-25/</ref>.

One of the most outspoken supporters of the Fair Tax is Republican presidential candidate, [[Mike Huckabee]]. Huckabee has said that the Fair Tax would "put the IRS out of business, but put Americans in business<ref> Massachusetts For Mike Huckabee, http://massachusettsforhuckabee.blogspot.com/search/label/Tax%20Plan</ref>." 

== Supporters and Opponents==

[[Image:Fairtaxb.jpg|right|thumb|200px| A FairTax bus during a rally at the 2007 [[Republican]] [[Iowa Straw Poll]].]]
Most of the support for the FairTax comes from the [[Republican Party]] and the [[Libertarian]]s. A significant number of [[Conservative]]s want Republican presidential candidates to support the FairTax, including one Indiana group called ‘Hoosiers for Fair Taxation’<ref>”FairTax Supporters Vent Frustration”, June 2007, http://www.theindychannel.com/news/13651607/detail.html</ref>. <ref>”FairTaxer's continue to “flex their muscles”, July 2007, http://www.fairtax.org/site/PageServer?pagename=news_feature</ref>. Nevertheless, while the number of the members of Congress who have signed on to the proposal has been growing, it still lacks popular support to be close to passage. Former Arkansas governor and presidential candidate [[Mike Huckabee]] made passage of a national sales tax a part of his platform during his recent bid for office. Former Federal Reserve chief [[Alan Greenspan]] also exhibited support for the FairTax in a recent interview.<ref>Greenspan: Consumption Tax could Help Economy, Fox News, March 2005, http://www.foxnews.com/story/0,2933,149298,00.html</ref>

[[Rudy Giuliania]], a one time candidate for President on the Republican side, was also hesitant and did not support it.<ref> “Giuliani Jeered For Opposing Flat Tax”, Associated Press, July 2007, http://www.forbes.com/feeds/ap/2007/07/07/ap3891710.html</ref>: "I don't think a Fair Tax is realistic change for America. Our economy is dependent upon the way our tax system operates<ref> “Giuliani Jeered For Opposing Flat Tax”, Associated Press, July 2007, http://www.forbes.com/feeds/ap/2007/07/07/ap3891710.html</ref>

==Criticism==

*Critics contend that the FairTax would have Constitutional issues. Supporters have painted the tax as an "[[excise]]", but opponents question this view believeing that an excise is a tax that is strictly limited to privileged or luxury goods and activities. They believe this view is confimed in other court rulings.<ref>http://www.conservapedia.com/Excise</ref> and the FairTax, including necessities, would therefore make it a [[Direct tax]], and not allowed under law. In ''Brushaber v. Union Pacific Railroad Co.'' (1916), the Supreme Court ruled that whenever any "[[excise]]" morphs into a tax on items of common right (such as anything necessary to preserve and carry out a normal life) "the duty would arise to disregard form and consider substance alone, and hence subject the tax to the regulation as to apportionment which otherwise as an excise would not apply to it."

*The FairTax would fail to close all loopholes. Purchases made overseas, although subject to the tax, would be difficult to track and therefore cheating might occur, much as it does now under the current system.

*A greater dependence on second-hand goods might occur, since they are exempt, and therefore alter the spending habits of the U.S. consumer.

*There is no cap on the rate that might be imposed by Congress. Just as current income tax rates change, the initial rate of 23% may be changed over time as Congress desires.

*It is argued that the FairTax would benefit the wealthy at the expense of the middle class. "It's these precious few people who control so much of this country's wealth that this tax is intended to benefit the most, since they actual(ly) spend a very small part of their personal wealth."<ref>http://www.cogitamusblog.com/2008/01/national-sales.html</ref>

==External Links==

*[http://www.fairtax.org/site/PageServer Americans for Fair Taxation]
*[http://www.factcheck.org/taxes/unspinning_the_fairtax.htm FactCheck.org]
 

==References==
<references/>

[[Category: Taxation]]
[[Category: Economics]]

FairTax

2009-06-24T03:14:52Z

Jeffg2: /* Proposal */ copyedit

[[Image:FairTaxRally.jpg|thumb|350px|A pro FairTax rally in Florida]]
The '''FairTax''' is a tax proposal that would replace all federal [[income tax]]es — including corporate, gift, estate, capital gains, alternative minimum, [[Social Security]], [[Medicare]], and self employment taxes — with a federal national retail [[sales tax]]. The tax would be paid on the purchase of all new goods and services, and would be collected at the final point of sale.<ref> Americans For Fair Taxation, “About the FairTax,” http://www.fairtax.org/site/PageServer?pagename=about_main</ref> Thus, instead of taxing "income", the FairTax would tax spending. This is known as a [[consumption tax]] — a method for taxing income on the back end, when the money is spent, rather than when it is earned.

In theory this would also allow the government to secure revenue from those who avoid paying taxes such as drug pushers of prostitutes, but who would still need goods and therefore pay under a FairTax system. The rate for the FairTax as proposed under current legislation is 23 percent of the total payment including the tax ($23 of every $100 spent in total—calculated similar to income taxes).<ref> "Embedded Taxes Change Fair Tax Analysis",http://www.roanoke.com/editorials/commentary/wb/wb/xp-51569</ref> This would be equivalent to a 30 percent traditional sales tax ($23 on top of every $77 spent—$100 total). Although some critics say it would be higher to be revenue neutral (take in the same amount as the current system).<ref> http://www.factcheck.org/taxes/unspinning_the_fairtax.html</ref> The effective tax rate for a family household would be variable due to the fixed monthly tax rebates.

The proposal includes monthly payments to all family households of lawful U.S. residents as an advance rebate, or 'prebate', of tax on purchases up to the poverty level. The rebate is meant to eliminate the taxation of household necessities and make the plan progressive. Used goods, exports, and intermediate business transactions would not be taxed, nor would savings, investments, or education tuition expenses as they would be considered an investment (rather than final consumption). The tax is voluntary to the extent that individual consumers can choose when to increase or decrease their product buying, unlike now, when income taxes are withheld from the paychecks of most workers.

==Proposal==
If passed, the Fair Tax would accomplish the following<ref> American For Fair Taxation, http://www.fairtax.org/site/PageServer?pagename=about_main</ref>:

* Abolish the [[Internal Revenue Service]] (IRS).
* Abolish personal [[income tax]]es.
* Calls for the repeal of the [[16th Amendment]].
* Provide each worker a monthly prebate, equal to the tax on "poverty level" income. <ref> Just how fair is the ‘Fair Tax’ CNN Money, September 2005, http://money.cnn.com/2005/09/06/pf/taxes/consumptiontax_0510/</ref>
* Close many loopholes under the current system.
* Enable retirees to receive their full pension, untaxed, until they spend it.
* Enable workers to keep their entire paycheck, untaxed, until they spend it. 
* Proponents believe the removal of the above will save 265 billion dollars a year in compliance costs under the current tax system,<ref>http://www.fairtax.org/site/PageServer?pagename=about_fairtax_four#neutral</ref> and be more practical than the current system, which includes over 60,000 pages of tax code.<ref> 67,204-Page Code Confounds Taxpayers, Yet Congress Sits By, USA Today, http://www.usatoday.com/news/opinion/2007-04-03-edit_N.htm?csp=34 </ref>

==History==

===1986-2005===
[[Image:FairTax vs. Tax Code 2.jpg‎ |thumb|300px|Congressman [[John Linder]], one of the strongest proponents for the FairTax, illustrates the size of the current tax system vs the FairTax method]]
The modern Fair Tax idea was originally the brain-child of the [[Scientologist]]s, as part of their ongoing battle with the IRS. The most popular of initial plans for the Fair Tax was designed by [[Americans for Fair Taxation]] (AFFT), which is led by businessman Leo Linbeck<ref> Just how fair is the ‘FairTax’ CNN Money, September 2005, http://money.cnn.com/2005/09/06/pf/taxes/consumptiontax_0510/</ref>. Linbeck stated that Americans have to pressure the government to come up with a better way of taxation, he said, “It is painfully obvious that [[Washington, D.C.]] insiders so closely linked with the status quo cannot be trusted to overturn the corrupt system of federal taxation. This effort will have to be driven by the American people<ref>Americans For Fair Taxation http://boortz.com/nuze/200510/10132005.html</ref>." The organization hired experts to look into an idea for a better tax system, they spent 23 million dollars in coming up with the idea of the Fair Tax. Their findings were combined into a book, “The FairTax Book: Saying Goodbye to the Income Tax and the IRS,” which Linbeck co-authored with Republican Congressman John Linder<ref> “The Fair Tax Book”,2005, http://www.amazon.com/Fair-Tax-Book-Saying-Goodbye/dp/0060875496/ref=sr_1_1/102-3275846-3467353?ie=UTF8&s=books&qid=1184106196&sr=1-1</ref>.

The FairTax became popular among free market [[conservative]]s, [[libertarian]]s, and some economists in recent years. The complication and wasted bureaucracy of the [[Internal Revenue Service]], government pressure on citizens to reveal information and records, and the loopholes in the current tax system created the incentive to look for a new way of taxation in the United States. Some [[Democrats]] also sought a tax system that would rid them current income tax, which they claim to be discriminate.

In the last 20 years the [[United States]] tax system has been changed over 14,000 times, this has led to an abundance of complexities which lead to its being an inefficient system. In 2003, United States Senator [[Saxby Chambliss]], a [[Republican]], and Senator [[Zell Miller]] a Democrat; introduced a by-partisan version of the Fair Tax. Although the bill had some support in the [[Senate]], it eventually lost in a 50-50. Senator [[Sam Brownback]] later stated the challenges of tax reform, “When you take (the tax code) on straight on, you take on every lobbyist,"

===2005-2007===

Former Federal Reserve Chairman, [[Alan Greenspan]], called for a federal sales tax to replace the broken income tax in 2005. "Since the exemplary 1986 reform, the tax code has drifted back to be overly complicated and burdened by higher marginal rates and by many special provisions that have undesirably narrowed the tax base," Greenspan stated at a Presidential Advisory counsel<ref>Greenspan: "Consumption Tax COuld Help Economy",http://www.foxnews.com/story/0,2933,149298,00.html</ref>.

In 2005 congress created a bill to enact the FairTax (H.R. 25; Senate Bill 1943), it had the support of more then 54 co-sponsors, and both Senate and House minority leaders [[Dennis Hassert]] and [[Tom DeLay]]<ref>“The FairTax: A Trogan Horse For America,” Jews For Preservation of Firearms Ownership, http://www.jpfo.org/fairtax.htm#fn1</ref>. Although the bill received the most support ever for any fundamental tax reform bill, it failed to pass. After the elections of 2004, Georgia Republican Congressman, [[John Linder]], reintroduced the FairTax on the first day of the 109th congress<ref> “Linder Reintroduces FairTax Legislation”, http://www.johnlinder.com/News_Details.asp?NewsID=128</ref>. Congressman Linder stated before congress, “The time is ripe for fundamental tax and a completely new Federal tax regime. I am pleased to reintroduce my Fair Tax proposal today reform, and look forward to the Congress creating a fairer, simpler tax system that advances our core goals of lower taxes and more freedom for our citizens."<ref> “Linder Reintroduces FairTax Legislation”, http://www.johnlinder.com/News_Details.asp?NewsID=128</ref>.”

In 2007 support for the FairTax bill grew to include 60 co-sponsors<ref>FairTax Gains Support, http://www.fairtaxblog.com/20070508/record-sixty-co-sponsors-for-fairtax-bill-hr-25/</ref>.

One of the most outspoken supporters of the Fair Tax is Republican presidential candidate, [[Mike Huckabee]]. Huckabee has said that the Fair Tax would "put the IRS out of business, but put Americans in business<ref> Massachusetts For Mike Huckabee, http://massachusettsforhuckabee.blogspot.com/search/label/Tax%20Plan</ref>." 

== Supporters and Opponents==

[[Image:Fairtaxb.jpg|right|thumb|200px| A FairTax bus during a rally at the 2007 [[Republican]] [[Iowa Straw Poll]].]]
Most of the support for the FairTax comes from the [[Republican Party]] and the [[Libertarian]]s. A significant number of [[Conservative]]s want Republican presidential candidates to support the FairTax, including one Indiana group called ‘Hoosiers for Fair Taxation’<ref>”FairTax Supporters Vent Frustration”, June 2007, http://www.theindychannel.com/news/13651607/detail.html</ref>. <ref>”FairTaxer's continue to “flex their muscles”, July 2007, http://www.fairtax.org/site/PageServer?pagename=news_feature</ref>. Nevertheless, while the number of the members of Congress who have signed on to the proposal has been growing, it still lacks popular support to be close to passage. Former Arkansas governor and presidential candidate [[Mike Huckabee]] made passage of a national sales tax a part of his platform during his recent bid for office. Former Federal Reserve chief [[Alan Greenspan]] also exhibited support for the FairTax in a recent interview.<ref>Greenspan: Consumption Tax could Help Economy, Fox News, March 2005, http://www.foxnews.com/story/0,2933,149298,00.html</ref>

[[Rudy Giuliania]], a one time candidate for President on the Republican side, was also hesitant and did not support it.<ref> “Giuliani Jeered For Opposing Flat Tax”, Associated Press, July 2007, http://www.forbes.com/feeds/ap/2007/07/07/ap3891710.html</ref>: "I don't think a Fair Tax is realistic change for America. Our economy is dependent upon the way our tax system operates<ref> “Giuliani Jeered For Opposing Flat Tax”, Associated Press, July 2007, http://www.forbes.com/feeds/ap/2007/07/07/ap3891710.html</ref>

==Criticism==

*Critics contend that the FairTax would have Constitutional issues. Supporters have painted the tax as an "[[excise]]", but opponents question this view believeing that an excise is a tax that is strictly limited to privileged or luxury goods and activities. They believe this view is confimed in other court rulings.<ref>http://www.conservapedia.com/Excise</ref> and the FairTax, including necessities, would therefore make it a [[Direct tax]], and not allowed under law. In ''Brushaber v. Union Pacific Railroad Co.'' (1916), the Supreme Court ruled that whenever any "[[excise]]" morphs into a tax on items of common right (such as anything necessary to preserve and carry out a normal life) "the duty would arise to disregard form and consider substance alone, and hence subject the tax to the regulation as to apportionment which otherwise as an excise would not apply to it."

*The FairTax would fail to close all loopholes. Purchases made overseas, although subject to the tax, would be difficult to track and therefore cheating might occur, much as it does now under the current system.

*A greater dependence on second-hand goods might occur, since they are exempt, and therefore alter the spending habits of the U.S. consumer.

*There is no cap on the rate that might be imposed by Congress. Just as current income tax rates change, the initial rate of 23% may be changed over time as Congress desires.

*It is argued that the FairTax would benefit the wealthy at the expense of the middle class. "It's these precious few people who control so much of this country's wealth that this tax is intended to benefit the most, since they actual(ly) spend a very small part of their personal wealth."<ref>http://www.cogitamusblog.com/2008/01/national-sales.html</ref>

==External Links==

*[http://www.fairtax.org/site/PageServer Americans for Fair Taxation]
*[http://www.factcheck.org/taxes/unspinning_the_fairtax.htm FactCheck.org]
 

==References==
<references/>

[[Category: Taxation]]
[[Category: Economics]]

FairTax

2009-06-24T03:13:48Z

Jeffg2: /* Proposal */ copyedit

[[Image:FairTaxRally.jpg|thumb|350px|A pro FairTax rally in Florida]]
The '''FairTax''' is a tax proposal that would replace all federal [[income tax]]es — including corporate, gift, estate, capital gains, alternative minimum, [[Social Security]], [[Medicare]], and self employment taxes — with a federal national retail [[sales tax]]. The tax would be paid on the purchase of all new goods and services, and would be collected at the final point of sale.<ref> Americans For Fair Taxation, “About the FairTax,” http://www.fairtax.org/site/PageServer?pagename=about_main</ref> Thus, instead of taxing "income", the FairTax would tax spending. This is known as a [[consumption tax]] — a method for taxing income on the back end, when the money is spent, rather than when it is earned.

In theory this would also allow the government to secure revenue from those who avoid paying taxes such as drug pushers of prostitutes, but who would still need goods and therefore pay under a FairTax system. The rate for the FairTax as proposed under current legislation is 23 percent of the total payment including the tax ($23 of every $100 spent in total—calculated similar to income taxes).<ref> "Embedded Taxes Change Fair Tax Analysis",http://www.roanoke.com/editorials/commentary/wb/wb/xp-51569</ref> This would be equivalent to a 30 percent traditional sales tax ($23 on top of every $77 spent—$100 total). Although some critics say it would be higher to be revenue neutral (take in the same amount as the current system).<ref> http://www.factcheck.org/taxes/unspinning_the_fairtax.html</ref> The effective tax rate for a family household would be variable due to the fixed monthly tax rebates.

The proposal includes monthly payments to all family households of lawful U.S. residents as an advance rebate, or 'prebate', of tax on purchases up to the poverty level. The rebate is meant to eliminate the taxation of household necessities and make the plan progressive. Used goods, exports, and intermediate business transactions would not be taxed, nor would savings, investments, or education tuition expenses as they would be considered an investment (rather than final consumption). The tax is voluntary to the extent that individual consumers can choose when to increase or decrease their product buying, unlike now, when income taxes are withheld from the paychecks of most workers.

==Proposal==
If passed, the Fair Tax would accomplish the following<ref> American For Fair Taxation, http://www.fairtax.org/site/PageServer?pagename=about_main</ref>:

* Abolish the [[Internal Revenue Service]] (IRS).
* Abolish personal [[income tax]]es.
* Calls for the repeal of the [[16th Amendment]].
* Provide each worker a monthly prebate, equal to the tax on "poverty level" income. <ref> Just how fair is the ‘Fair Tax’ CNN Money, September 2005, http://money.cnn.com/2005/09/06/pf/taxes/consumptiontax_0510/</ref>
* Close many loopholes under the current system.
* Enable retirees to receive their full pension, untaxed, until they spend it.
* Enable workers to keep their entire paycheck, untaxed, until they spend it. 
* Proponents believe the removal of the above will save 265 billion dollars a year in compliance costs under the current tax system.<ref>http://www.fairtax.org/site/PageServer?pagename=about_fairtax_four#neutral</ref> and be more practical than the current system, which includes over 60,000 pages of tax code.<ref> 67,204-Page Code Confounds Taxpayers, Yet Congress Sits By, USA Today, http://www.usatoday.com/news/opinion/2007-04-03-edit_N.htm?csp=34 </ref>

==History==

===1986-2005===
[[Image:FairTax vs. Tax Code 2.jpg‎ |thumb|300px|Congressman [[John Linder]], one of the strongest proponents for the FairTax, illustrates the size of the current tax system vs the FairTax method]]
The modern Fair Tax idea was originally the brain-child of the [[Scientologist]]s, as part of their ongoing battle with the IRS. The most popular of initial plans for the Fair Tax was designed by [[Americans for Fair Taxation]] (AFFT), which is led by businessman Leo Linbeck<ref> Just how fair is the ‘FairTax’ CNN Money, September 2005, http://money.cnn.com/2005/09/06/pf/taxes/consumptiontax_0510/</ref>. Linbeck stated that Americans have to pressure the government to come up with a better way of taxation, he said, “It is painfully obvious that [[Washington, D.C.]] insiders so closely linked with the status quo cannot be trusted to overturn the corrupt system of federal taxation. This effort will have to be driven by the American people<ref>Americans For Fair Taxation http://boortz.com/nuze/200510/10132005.html</ref>." The organization hired experts to look into an idea for a better tax system, they spent 23 million dollars in coming up with the idea of the Fair Tax. Their findings were combined into a book, “The FairTax Book: Saying Goodbye to the Income Tax and the IRS,” which Linbeck co-authored with Republican Congressman John Linder<ref> “The Fair Tax Book”,2005, http://www.amazon.com/Fair-Tax-Book-Saying-Goodbye/dp/0060875496/ref=sr_1_1/102-3275846-3467353?ie=UTF8&s=books&qid=1184106196&sr=1-1</ref>.

The FairTax became popular among free market [[conservative]]s, [[libertarian]]s, and some economists in recent years. The complication and wasted bureaucracy of the [[Internal Revenue Service]], government pressure on citizens to reveal information and records, and the loopholes in the current tax system created the incentive to look for a new way of taxation in the United States. Some [[Democrats]] also sought a tax system that would rid them current income tax, which they claim to be discriminate.

In the last 20 years the [[United States]] tax system has been changed over 14,000 times, this has led to an abundance of complexities which lead to its being an inefficient system. In 2003, United States Senator [[Saxby Chambliss]], a [[Republican]], and Senator [[Zell Miller]] a Democrat; introduced a by-partisan version of the Fair Tax. Although the bill had some support in the [[Senate]], it eventually lost in a 50-50. Senator [[Sam Brownback]] later stated the challenges of tax reform, “When you take (the tax code) on straight on, you take on every lobbyist,"

===2005-2007===

Former Federal Reserve Chairman, [[Alan Greenspan]], called for a federal sales tax to replace the broken income tax in 2005. "Since the exemplary 1986 reform, the tax code has drifted back to be overly complicated and burdened by higher marginal rates and by many special provisions that have undesirably narrowed the tax base," Greenspan stated at a Presidential Advisory counsel<ref>Greenspan: "Consumption Tax COuld Help Economy",http://www.foxnews.com/story/0,2933,149298,00.html</ref>.

In 2005 congress created a bill to enact the FairTax (H.R. 25; Senate Bill 1943), it had the support of more then 54 co-sponsors, and both Senate and House minority leaders [[Dennis Hassert]] and [[Tom DeLay]]<ref>“The FairTax: A Trogan Horse For America,” Jews For Preservation of Firearms Ownership, http://www.jpfo.org/fairtax.htm#fn1</ref>. Although the bill received the most support ever for any fundamental tax reform bill, it failed to pass. After the elections of 2004, Georgia Republican Congressman, [[John Linder]], reintroduced the FairTax on the first day of the 109th congress<ref> “Linder Reintroduces FairTax Legislation”, http://www.johnlinder.com/News_Details.asp?NewsID=128</ref>. Congressman Linder stated before congress, “The time is ripe for fundamental tax and a completely new Federal tax regime. I am pleased to reintroduce my Fair Tax proposal today reform, and look forward to the Congress creating a fairer, simpler tax system that advances our core goals of lower taxes and more freedom for our citizens."<ref> “Linder Reintroduces FairTax Legislation”, http://www.johnlinder.com/News_Details.asp?NewsID=128</ref>.”

In 2007 support for the FairTax bill grew to include 60 co-sponsors<ref>FairTax Gains Support, http://www.fairtaxblog.com/20070508/record-sixty-co-sponsors-for-fairtax-bill-hr-25/</ref>.

One of the most outspoken supporters of the Fair Tax is Republican presidential candidate, [[Mike Huckabee]]. Huckabee has said that the Fair Tax would "put the IRS out of business, but put Americans in business<ref> Massachusetts For Mike Huckabee, http://massachusettsforhuckabee.blogspot.com/search/label/Tax%20Plan</ref>." 

== Supporters and Opponents==

[[Image:Fairtaxb.jpg|right|thumb|200px| A FairTax bus during a rally at the 2007 [[Republican]] [[Iowa Straw Poll]].]]
Most of the support for the FairTax comes from the [[Republican Party]] and the [[Libertarian]]s. A significant number of [[Conservative]]s want Republican presidential candidates to support the FairTax, including one Indiana group called ‘Hoosiers for Fair Taxation’<ref>”FairTax Supporters Vent Frustration”, June 2007, http://www.theindychannel.com/news/13651607/detail.html</ref>. <ref>”FairTaxer's continue to “flex their muscles”, July 2007, http://www.fairtax.org/site/PageServer?pagename=news_feature</ref>. Nevertheless, while the number of the members of Congress who have signed on to the proposal has been growing, it still lacks popular support to be close to passage. Former Arkansas governor and presidential candidate [[Mike Huckabee]] made passage of a national sales tax a part of his platform during his recent bid for office. Former Federal Reserve chief [[Alan Greenspan]] also exhibited support for the FairTax in a recent interview.<ref>Greenspan: Consumption Tax could Help Economy, Fox News, March 2005, http://www.foxnews.com/story/0,2933,149298,00.html</ref>

[[Rudy Giuliania]], a one time candidate for President on the Republican side, was also hesitant and did not support it.<ref> “Giuliani Jeered For Opposing Flat Tax”, Associated Press, July 2007, http://www.forbes.com/feeds/ap/2007/07/07/ap3891710.html</ref>: "I don't think a Fair Tax is realistic change for America. Our economy is dependent upon the way our tax system operates<ref> “Giuliani Jeered For Opposing Flat Tax”, Associated Press, July 2007, http://www.forbes.com/feeds/ap/2007/07/07/ap3891710.html</ref>

==Criticism==

*Critics contend that the FairTax would have Constitutional issues. Supporters have painted the tax as an "[[excise]]", but opponents question this view believeing that an excise is a tax that is strictly limited to privileged or luxury goods and activities. They believe this view is confimed in other court rulings.<ref>http://www.conservapedia.com/Excise</ref> and the FairTax, including necessities, would therefore make it a [[Direct tax]], and not allowed under law. In ''Brushaber v. Union Pacific Railroad Co.'' (1916), the Supreme Court ruled that whenever any "[[excise]]" morphs into a tax on items of common right (such as anything necessary to preserve and carry out a normal life) "the duty would arise to disregard form and consider substance alone, and hence subject the tax to the regulation as to apportionment which otherwise as an excise would not apply to it."

*The FairTax would fail to close all loopholes. Purchases made overseas, although subject to the tax, would be difficult to track and therefore cheating might occur, much as it does now under the current system.

*A greater dependence on second-hand goods might occur, since they are exempt, and therefore alter the spending habits of the U.S. consumer.

*There is no cap on the rate that might be imposed by Congress. Just as current income tax rates change, the initial rate of 23% may be changed over time as Congress desires.

*It is argued that the FairTax would benefit the wealthy at the expense of the middle class. "It's these precious few people who control so much of this country's wealth that this tax is intended to benefit the most, since they actual(ly) spend a very small part of their personal wealth."<ref>http://www.cogitamusblog.com/2008/01/national-sales.html</ref>

==External Links==

*[http://www.fairtax.org/site/PageServer Americans for Fair Taxation]
*[http://www.factcheck.org/taxes/unspinning_the_fairtax.htm FactCheck.org]
 

==References==
<references/>

[[Category: Taxation]]
[[Category: Economics]]

FairTax

2009-06-24T03:13:24Z

Jeffg2: /* Proposal */ A bill can not repeal the 16th Amendment, only another Amendment can

[[Image:FairTaxRally.jpg|thumb|350px|A pro FairTax rally in Florida]]
The '''FairTax''' is a tax proposal that would replace all federal [[income tax]]es — including corporate, gift, estate, capital gains, alternative minimum, [[Social Security]], [[Medicare]], and self employment taxes — with a federal national retail [[sales tax]]. The tax would be paid on the purchase of all new goods and services, and would be collected at the final point of sale.<ref> Americans For Fair Taxation, “About the FairTax,” http://www.fairtax.org/site/PageServer?pagename=about_main</ref> Thus, instead of taxing "income", the FairTax would tax spending. This is known as a [[consumption tax]] — a method for taxing income on the back end, when the money is spent, rather than when it is earned.

In theory this would also allow the government to secure revenue from those who avoid paying taxes such as drug pushers of prostitutes, but who would still need goods and therefore pay under a FairTax system. The rate for the FairTax as proposed under current legislation is 23 percent of the total payment including the tax ($23 of every $100 spent in total—calculated similar to income taxes).<ref> "Embedded Taxes Change Fair Tax Analysis",http://www.roanoke.com/editorials/commentary/wb/wb/xp-51569</ref> This would be equivalent to a 30 percent traditional sales tax ($23 on top of every $77 spent—$100 total). Although some critics say it would be higher to be revenue neutral (take in the same amount as the current system).<ref> http://www.factcheck.org/taxes/unspinning_the_fairtax.html</ref> The effective tax rate for a family household would be variable due to the fixed monthly tax rebates.

The proposal includes monthly payments to all family households of lawful U.S. residents as an advance rebate, or 'prebate', of tax on purchases up to the poverty level. The rebate is meant to eliminate the taxation of household necessities and make the plan progressive. Used goods, exports, and intermediate business transactions would not be taxed, nor would savings, investments, or education tuition expenses as they would be considered an investment (rather than final consumption). The tax is voluntary to the extent that individual consumers can choose when to increase or decrease their product buying, unlike now, when income taxes are withheld from the paychecks of most workers.

==Proposal==
If passed, the Fair Tax would accomplish the following<ref> American For Fair Taxation, http://www.fairtax.org/site/PageServer?pagename=about_main</ref>:

* Abolish the [[Internal Revenue Service]] (IRS).
* Abolish personal [[income tax]]es.
* Calls for the repeal the [[16th Amendment]].
* Provide each worker a monthly prebate, equal to the tax on "poverty level" income. <ref> Just how fair is the ‘Fair Tax’ CNN Money, September 2005, http://money.cnn.com/2005/09/06/pf/taxes/consumptiontax_0510/</ref>
* Close many loopholes under the current system.
* Enable retirees to receive their full pension, untaxed, until they spend it.
* Enable workers to keep their entire paycheck, untaxed, until they spend it. 
* Proponents believe the removal of the above will save 265 billion dollars a year in compliance costs under the current tax system.<ref>http://www.fairtax.org/site/PageServer?pagename=about_fairtax_four#neutral</ref> and be more practical than the current system, which includes over 60,000 pages of tax code.<ref> 67,204-Page Code Confounds Taxpayers, Yet Congress Sits By, USA Today, http://www.usatoday.com/news/opinion/2007-04-03-edit_N.htm?csp=34 </ref>

==History==

===1986-2005===
[[Image:FairTax vs. Tax Code 2.jpg‎ |thumb|300px|Congressman [[John Linder]], one of the strongest proponents for the FairTax, illustrates the size of the current tax system vs the FairTax method]]
The modern Fair Tax idea was originally the brain-child of the [[Scientologist]]s, as part of their ongoing battle with the IRS. The most popular of initial plans for the Fair Tax was designed by [[Americans for Fair Taxation]] (AFFT), which is led by businessman Leo Linbeck<ref> Just how fair is the ‘FairTax’ CNN Money, September 2005, http://money.cnn.com/2005/09/06/pf/taxes/consumptiontax_0510/</ref>. Linbeck stated that Americans have to pressure the government to come up with a better way of taxation, he said, “It is painfully obvious that [[Washington, D.C.]] insiders so closely linked with the status quo cannot be trusted to overturn the corrupt system of federal taxation. This effort will have to be driven by the American people<ref>Americans For Fair Taxation http://boortz.com/nuze/200510/10132005.html</ref>." The organization hired experts to look into an idea for a better tax system, they spent 23 million dollars in coming up with the idea of the Fair Tax. Their findings were combined into a book, “The FairTax Book: Saying Goodbye to the Income Tax and the IRS,” which Linbeck co-authored with Republican Congressman John Linder<ref> “The Fair Tax Book”,2005, http://www.amazon.com/Fair-Tax-Book-Saying-Goodbye/dp/0060875496/ref=sr_1_1/102-3275846-3467353?ie=UTF8&s=books&qid=1184106196&sr=1-1</ref>.

The FairTax became popular among free market [[conservative]]s, [[libertarian]]s, and some economists in recent years. The complication and wasted bureaucracy of the [[Internal Revenue Service]], government pressure on citizens to reveal information and records, and the loopholes in the current tax system created the incentive to look for a new way of taxation in the United States. Some [[Democrats]] also sought a tax system that would rid them current income tax, which they claim to be discriminate.

In the last 20 years the [[United States]] tax system has been changed over 14,000 times, this has led to an abundance of complexities which lead to its being an inefficient system. In 2003, United States Senator [[Saxby Chambliss]], a [[Republican]], and Senator [[Zell Miller]] a Democrat; introduced a by-partisan version of the Fair Tax. Although the bill had some support in the [[Senate]], it eventually lost in a 50-50. Senator [[Sam Brownback]] later stated the challenges of tax reform, “When you take (the tax code) on straight on, you take on every lobbyist,"

===2005-2007===

Former Federal Reserve Chairman, [[Alan Greenspan]], called for a federal sales tax to replace the broken income tax in 2005. "Since the exemplary 1986 reform, the tax code has drifted back to be overly complicated and burdened by higher marginal rates and by many special provisions that have undesirably narrowed the tax base," Greenspan stated at a Presidential Advisory counsel<ref>Greenspan: "Consumption Tax COuld Help Economy",http://www.foxnews.com/story/0,2933,149298,00.html</ref>.

In 2005 congress created a bill to enact the FairTax (H.R. 25; Senate Bill 1943), it had the support of more then 54 co-sponsors, and both Senate and House minority leaders [[Dennis Hassert]] and [[Tom DeLay]]<ref>“The FairTax: A Trogan Horse For America,” Jews For Preservation of Firearms Ownership, http://www.jpfo.org/fairtax.htm#fn1</ref>. Although the bill received the most support ever for any fundamental tax reform bill, it failed to pass. After the elections of 2004, Georgia Republican Congressman, [[John Linder]], reintroduced the FairTax on the first day of the 109th congress<ref> “Linder Reintroduces FairTax Legislation”, http://www.johnlinder.com/News_Details.asp?NewsID=128</ref>. Congressman Linder stated before congress, “The time is ripe for fundamental tax and a completely new Federal tax regime. I am pleased to reintroduce my Fair Tax proposal today reform, and look forward to the Congress creating a fairer, simpler tax system that advances our core goals of lower taxes and more freedom for our citizens."<ref> “Linder Reintroduces FairTax Legislation”, http://www.johnlinder.com/News_Details.asp?NewsID=128</ref>.”

In 2007 support for the FairTax bill grew to include 60 co-sponsors<ref>FairTax Gains Support, http://www.fairtaxblog.com/20070508/record-sixty-co-sponsors-for-fairtax-bill-hr-25/</ref>.

One of the most outspoken supporters of the Fair Tax is Republican presidential candidate, [[Mike Huckabee]]. Huckabee has said that the Fair Tax would "put the IRS out of business, but put Americans in business<ref> Massachusetts For Mike Huckabee, http://massachusettsforhuckabee.blogspot.com/search/label/Tax%20Plan</ref>." 

== Supporters and Opponents==

[[Image:Fairtaxb.jpg|right|thumb|200px| A FairTax bus during a rally at the 2007 [[Republican]] [[Iowa Straw Poll]].]]
Most of the support for the FairTax comes from the [[Republican Party]] and the [[Libertarian]]s. A significant number of [[Conservative]]s want Republican presidential candidates to support the FairTax, including one Indiana group called ‘Hoosiers for Fair Taxation’<ref>”FairTax Supporters Vent Frustration”, June 2007, http://www.theindychannel.com/news/13651607/detail.html</ref>. <ref>”FairTaxer's continue to “flex their muscles”, July 2007, http://www.fairtax.org/site/PageServer?pagename=news_feature</ref>. Nevertheless, while the number of the members of Congress who have signed on to the proposal has been growing, it still lacks popular support to be close to passage. Former Arkansas governor and presidential candidate [[Mike Huckabee]] made passage of a national sales tax a part of his platform during his recent bid for office. Former Federal Reserve chief [[Alan Greenspan]] also exhibited support for the FairTax in a recent interview.<ref>Greenspan: Consumption Tax could Help Economy, Fox News, March 2005, http://www.foxnews.com/story/0,2933,149298,00.html</ref>

[[Rudy Giuliania]], a one time candidate for President on the Republican side, was also hesitant and did not support it.<ref> “Giuliani Jeered For Opposing Flat Tax”, Associated Press, July 2007, http://www.forbes.com/feeds/ap/2007/07/07/ap3891710.html</ref>: "I don't think a Fair Tax is realistic change for America. Our economy is dependent upon the way our tax system operates<ref> “Giuliani Jeered For Opposing Flat Tax”, Associated Press, July 2007, http://www.forbes.com/feeds/ap/2007/07/07/ap3891710.html</ref>

==Criticism==

*Critics contend that the FairTax would have Constitutional issues. Supporters have painted the tax as an "[[excise]]", but opponents question this view believeing that an excise is a tax that is strictly limited to privileged or luxury goods and activities. They believe this view is confimed in other court rulings.<ref>http://www.conservapedia.com/Excise</ref> and the FairTax, including necessities, would therefore make it a [[Direct tax]], and not allowed under law. In ''Brushaber v. Union Pacific Railroad Co.'' (1916), the Supreme Court ruled that whenever any "[[excise]]" morphs into a tax on items of common right (such as anything necessary to preserve and carry out a normal life) "the duty would arise to disregard form and consider substance alone, and hence subject the tax to the regulation as to apportionment which otherwise as an excise would not apply to it."

*The FairTax would fail to close all loopholes. Purchases made overseas, although subject to the tax, would be difficult to track and therefore cheating might occur, much as it does now under the current system.

*A greater dependence on second-hand goods might occur, since they are exempt, and therefore alter the spending habits of the U.S. consumer.

*There is no cap on the rate that might be imposed by Congress. Just as current income tax rates change, the initial rate of 23% may be changed over time as Congress desires.

*It is argued that the FairTax would benefit the wealthy at the expense of the middle class. "It's these precious few people who control so much of this country's wealth that this tax is intended to benefit the most, since they actual(ly) spend a very small part of their personal wealth."<ref>http://www.cogitamusblog.com/2008/01/national-sales.html</ref>

==External Links==

*[http://www.fairtax.org/site/PageServer Americans for Fair Taxation]
*[http://www.factcheck.org/taxes/unspinning_the_fairtax.htm FactCheck.org]
 

==References==
<references/>

[[Category: Taxation]]
[[Category: Economics]]

FairTax

2009-06-24T03:10:10Z

Jeffg2: /* Supporters and Opponents */ This is untrue, Gravel openly made it part of his platform: http://www.mikegravel.us/?q=fair_tax

[[Image:FairTaxRally.jpg|thumb|350px|A pro FairTax rally in Florida]]
The '''FairTax''' is a tax proposal that would replace all federal [[income tax]]es — including corporate, gift, estate, capital gains, alternative minimum, [[Social Security]], [[Medicare]], and self employment taxes — with a federal national retail [[sales tax]]. The tax would be paid on the purchase of all new goods and services, and would be collected at the final point of sale.<ref> Americans For Fair Taxation, “About the FairTax,” http://www.fairtax.org/site/PageServer?pagename=about_main</ref> Thus, instead of taxing "income", the FairTax would tax spending. This is known as a [[consumption tax]] — a method for taxing income on the back end, when the money is spent, rather than when it is earned.

In theory this would also allow the government to secure revenue from those who avoid paying taxes such as drug pushers of prostitutes, but who would still need goods and therefore pay under a FairTax system. The rate for the FairTax as proposed under current legislation is 23 percent of the total payment including the tax ($23 of every $100 spent in total—calculated similar to income taxes).<ref> "Embedded Taxes Change Fair Tax Analysis",http://www.roanoke.com/editorials/commentary/wb/wb/xp-51569</ref> This would be equivalent to a 30 percent traditional sales tax ($23 on top of every $77 spent—$100 total). Although some critics say it would be higher to be revenue neutral (take in the same amount as the current system).<ref> http://www.factcheck.org/taxes/unspinning_the_fairtax.html</ref> The effective tax rate for a family household would be variable due to the fixed monthly tax rebates.

The proposal includes monthly payments to all family households of lawful U.S. residents as an advance rebate, or 'prebate', of tax on purchases up to the poverty level. The rebate is meant to eliminate the taxation of household necessities and make the plan progressive. Used goods, exports, and intermediate business transactions would not be taxed, nor would savings, investments, or education tuition expenses as they would be considered an investment (rather than final consumption). The tax is voluntary to the extent that individual consumers can choose when to increase or decrease their product buying, unlike now, when income taxes are withheld from the paychecks of most workers.

==Proposal==
If passed, the Fair Tax would accomplish the following<ref> American For Fair Taxation, http://www.fairtax.org/site/PageServer?pagename=about_main</ref>:

* Abolish the [[Internal Revenue Service]] (IRS).
* Abolish personal [[income tax]]es.
* Repeal the [[16th Amendment]].
* Provide each worker a monthly prebate, equal to the tax on "poverty level" income. <ref> Just how fair is the ‘Fair Tax’ CNN Money, September 2005, http://money.cnn.com/2005/09/06/pf/taxes/consumptiontax_0510/</ref>
* Close many loopholes under the current system.
* Enable retirees to receive their full pension, untaxed, until they spend it.
* Enable workers to keep their entire paycheck, untaxed, until they spend it. 
* Proponents believe the removal of the above will save 265 billion dollars a year in compliance costs under the current tax system.<ref>http://www.fairtax.org/site/PageServer?pagename=about_fairtax_four#neutral</ref> and be more practical than the current system, which includes over 60,000 pages of tax code.<ref> 67,204-Page Code Confounds Taxpayers, Yet Congress Sits By, USA Today, http://www.usatoday.com/news/opinion/2007-04-03-edit_N.htm?csp=34 </ref>

==History==

===1986-2005===
[[Image:FairTax vs. Tax Code 2.jpg‎ |thumb|300px|Congressman [[John Linder]], one of the strongest proponents for the FairTax, illustrates the size of the current tax system vs the FairTax method]]
The modern Fair Tax idea was originally the brain-child of the [[Scientologist]]s, as part of their ongoing battle with the IRS. The most popular of initial plans for the Fair Tax was designed by [[Americans for Fair Taxation]] (AFFT), which is led by businessman Leo Linbeck<ref> Just how fair is the ‘FairTax’ CNN Money, September 2005, http://money.cnn.com/2005/09/06/pf/taxes/consumptiontax_0510/</ref>. Linbeck stated that Americans have to pressure the government to come up with a better way of taxation, he said, “It is painfully obvious that [[Washington, D.C.]] insiders so closely linked with the status quo cannot be trusted to overturn the corrupt system of federal taxation. This effort will have to be driven by the American people<ref>Americans For Fair Taxation http://boortz.com/nuze/200510/10132005.html</ref>." The organization hired experts to look into an idea for a better tax system, they spent 23 million dollars in coming up with the idea of the Fair Tax. Their findings were combined into a book, “The FairTax Book: Saying Goodbye to the Income Tax and the IRS,” which Linbeck co-authored with Republican Congressman John Linder<ref> “The Fair Tax Book”,2005, http://www.amazon.com/Fair-Tax-Book-Saying-Goodbye/dp/0060875496/ref=sr_1_1/102-3275846-3467353?ie=UTF8&s=books&qid=1184106196&sr=1-1</ref>.

The FairTax became popular among free market [[conservative]]s, [[libertarian]]s, and some economists in recent years. The complication and wasted bureaucracy of the [[Internal Revenue Service]], government pressure on citizens to reveal information and records, and the loopholes in the current tax system created the incentive to look for a new way of taxation in the United States. Some [[Democrats]] also sought a tax system that would rid them current income tax, which they claim to be discriminate.

In the last 20 years the [[United States]] tax system has been changed over 14,000 times, this has led to an abundance of complexities which lead to its being an inefficient system. In 2003, United States Senator [[Saxby Chambliss]], a [[Republican]], and Senator [[Zell Miller]] a Democrat; introduced a by-partisan version of the Fair Tax. Although the bill had some support in the [[Senate]], it eventually lost in a 50-50. Senator [[Sam Brownback]] later stated the challenges of tax reform, “When you take (the tax code) on straight on, you take on every lobbyist,"

===2005-2007===

Former Federal Reserve Chairman, [[Alan Greenspan]], called for a federal sales tax to replace the broken income tax in 2005. "Since the exemplary 1986 reform, the tax code has drifted back to be overly complicated and burdened by higher marginal rates and by many special provisions that have undesirably narrowed the tax base," Greenspan stated at a Presidential Advisory counsel<ref>Greenspan: "Consumption Tax COuld Help Economy",http://www.foxnews.com/story/0,2933,149298,00.html</ref>.

In 2005 congress created a bill to enact the FairTax (H.R. 25; Senate Bill 1943), it had the support of more then 54 co-sponsors, and both Senate and House minority leaders [[Dennis Hassert]] and [[Tom DeLay]]<ref>“The FairTax: A Trogan Horse For America,” Jews For Preservation of Firearms Ownership, http://www.jpfo.org/fairtax.htm#fn1</ref>. Although the bill received the most support ever for any fundamental tax reform bill, it failed to pass. After the elections of 2004, Georgia Republican Congressman, [[John Linder]], reintroduced the FairTax on the first day of the 109th congress<ref> “Linder Reintroduces FairTax Legislation”, http://www.johnlinder.com/News_Details.asp?NewsID=128</ref>. Congressman Linder stated before congress, “The time is ripe for fundamental tax and a completely new Federal tax regime. I am pleased to reintroduce my Fair Tax proposal today reform, and look forward to the Congress creating a fairer, simpler tax system that advances our core goals of lower taxes and more freedom for our citizens."<ref> “Linder Reintroduces FairTax Legislation”, http://www.johnlinder.com/News_Details.asp?NewsID=128</ref>.”

In 2007 support for the FairTax bill grew to include 60 co-sponsors<ref>FairTax Gains Support, http://www.fairtaxblog.com/20070508/record-sixty-co-sponsors-for-fairtax-bill-hr-25/</ref>.

One of the most outspoken supporters of the Fair Tax is Republican presidential candidate, [[Mike Huckabee]]. Huckabee has said that the Fair Tax would "put the IRS out of business, but put Americans in business<ref> Massachusetts For Mike Huckabee, http://massachusettsforhuckabee.blogspot.com/search/label/Tax%20Plan</ref>." 

== Supporters and Opponents==

[[Image:Fairtaxb.jpg|right|thumb|200px| A FairTax bus during a rally at the 2007 [[Republican]] [[Iowa Straw Poll]].]]
Most of the support for the FairTax comes from the [[Republican Party]] and the [[Libertarian]]s. A significant number of [[Conservative]]s want Republican presidential candidates to support the FairTax, including one Indiana group called ‘Hoosiers for Fair Taxation’<ref>”FairTax Supporters Vent Frustration”, June 2007, http://www.theindychannel.com/news/13651607/detail.html</ref>. <ref>”FairTaxer's continue to “flex their muscles”, July 2007, http://www.fairtax.org/site/PageServer?pagename=news_feature</ref>. Nevertheless, while the number of the members of Congress who have signed on to the proposal has been growing, it still lacks popular support to be close to passage. Former Arkansas governor and presidential candidate [[Mike Huckabee]] made passage of a national sales tax a part of his platform during his recent bid for office. Former Federal Reserve chief [[Alan Greenspan]] also exhibited support for the FairTax in a recent interview.<ref>Greenspan: Consumption Tax could Help Economy, Fox News, March 2005, http://www.foxnews.com/story/0,2933,149298,00.html</ref>

[[Rudy Giuliania]], a one time candidate for President on the Republican side, was also hesitant and did not support it.<ref> “Giuliani Jeered For Opposing Flat Tax”, Associated Press, July 2007, http://www.forbes.com/feeds/ap/2007/07/07/ap3891710.html</ref>: "I don't think a Fair Tax is realistic change for America. Our economy is dependent upon the way our tax system operates<ref> “Giuliani Jeered For Opposing Flat Tax”, Associated Press, July 2007, http://www.forbes.com/feeds/ap/2007/07/07/ap3891710.html</ref>

==Criticism==

*Critics contend that the FairTax would have Constitutional issues. Supporters have painted the tax as an "[[excise]]", but opponents question this view believeing that an excise is a tax that is strictly limited to privileged or luxury goods and activities. They believe this view is confimed in other court rulings.<ref>http://www.conservapedia.com/Excise</ref> and the FairTax, including necessities, would therefore make it a [[Direct tax]], and not allowed under law. In ''Brushaber v. Union Pacific Railroad Co.'' (1916), the Supreme Court ruled that whenever any "[[excise]]" morphs into a tax on items of common right (such as anything necessary to preserve and carry out a normal life) "the duty would arise to disregard form and consider substance alone, and hence subject the tax to the regulation as to apportionment which otherwise as an excise would not apply to it."

*The FairTax would fail to close all loopholes. Purchases made overseas, although subject to the tax, would be difficult to track and therefore cheating might occur, much as it does now under the current system.

*A greater dependence on second-hand goods might occur, since they are exempt, and therefore alter the spending habits of the U.S. consumer.

*There is no cap on the rate that might be imposed by Congress. Just as current income tax rates change, the initial rate of 23% may be changed over time as Congress desires.

*It is argued that the FairTax would benefit the wealthy at the expense of the middle class. "It's these precious few people who control so much of this country's wealth that this tax is intended to benefit the most, since they actual(ly) spend a very small part of their personal wealth."<ref>http://www.cogitamusblog.com/2008/01/national-sales.html</ref>

==External Links==

*[http://www.fairtax.org/site/PageServer Americans for Fair Taxation]
*[http://www.factcheck.org/taxes/unspinning_the_fairtax.htm FactCheck.org]
 

==References==
<references/>

[[Category: Taxation]]
[[Category: Economics]]

FairTax

2009-06-24T03:06:37Z

Jeffg2: Rewrote section that was just inaccurate

[[Image:FairTaxRally.jpg|thumb|350px|A pro FairTax rally in Florida]]
The '''FairTax''' is a tax proposal that would replace all federal [[income tax]]es — including corporate, gift, estate, capital gains, alternative minimum, [[Social Security]], [[Medicare]], and self employment taxes — with a federal national retail [[sales tax]]. The tax would be paid on the purchase of all new goods and services, and would be collected at the final point of sale.<ref> Americans For Fair Taxation, “About the FairTax,” http://www.fairtax.org/site/PageServer?pagename=about_main</ref> Thus, instead of taxing "income", the FairTax would tax spending. This is known as a [[consumption tax]] — a method for taxing income on the back end, when the money is spent, rather than when it is earned.

In theory this would also allow the government to secure revenue from those who avoid paying taxes such as drug pushers of prostitutes, but who would still need goods and therefore pay under a FairTax system. The rate for the FairTax as proposed under current legislation is 23 percent of the total payment including the tax ($23 of every $100 spent in total—calculated similar to income taxes).<ref> "Embedded Taxes Change Fair Tax Analysis",http://www.roanoke.com/editorials/commentary/wb/wb/xp-51569</ref> This would be equivalent to a 30 percent traditional sales tax ($23 on top of every $77 spent—$100 total). Although some critics say it would be higher to be revenue neutral (take in the same amount as the current system).<ref> http://www.factcheck.org/taxes/unspinning_the_fairtax.html</ref> The effective tax rate for a family household would be variable due to the fixed monthly tax rebates.

The proposal includes monthly payments to all family households of lawful U.S. residents as an advance rebate, or 'prebate', of tax on purchases up to the poverty level. The rebate is meant to eliminate the taxation of household necessities and make the plan progressive. Used goods, exports, and intermediate business transactions would not be taxed, nor would savings, investments, or education tuition expenses as they would be considered an investment (rather than final consumption). The tax is voluntary to the extent that individual consumers can choose when to increase or decrease their product buying, unlike now, when income taxes are withheld from the paychecks of most workers.

==Proposal==
If passed, the Fair Tax would accomplish the following<ref> American For Fair Taxation, http://www.fairtax.org/site/PageServer?pagename=about_main</ref>:

* Abolish the [[Internal Revenue Service]] (IRS).
* Abolish personal [[income tax]]es.
* Repeal the [[16th Amendment]].
* Provide each worker a monthly prebate, equal to the tax on "poverty level" income. <ref> Just how fair is the ‘Fair Tax’ CNN Money, September 2005, http://money.cnn.com/2005/09/06/pf/taxes/consumptiontax_0510/</ref>
* Close many loopholes under the current system.
* Enable retirees to receive their full pension, untaxed, until they spend it.
* Enable workers to keep their entire paycheck, untaxed, until they spend it. 
* Proponents believe the removal of the above will save 265 billion dollars a year in compliance costs under the current tax system.<ref>http://www.fairtax.org/site/PageServer?pagename=about_fairtax_four#neutral</ref> and be more practical than the current system, which includes over 60,000 pages of tax code.<ref> 67,204-Page Code Confounds Taxpayers, Yet Congress Sits By, USA Today, http://www.usatoday.com/news/opinion/2007-04-03-edit_N.htm?csp=34 </ref>

==History==

===1986-2005===
[[Image:FairTax vs. Tax Code 2.jpg‎ |thumb|300px|Congressman [[John Linder]], one of the strongest proponents for the FairTax, illustrates the size of the current tax system vs the FairTax method]]
The modern Fair Tax idea was originally the brain-child of the [[Scientologist]]s, as part of their ongoing battle with the IRS. The most popular of initial plans for the Fair Tax was designed by [[Americans for Fair Taxation]] (AFFT), which is led by businessman Leo Linbeck<ref> Just how fair is the ‘FairTax’ CNN Money, September 2005, http://money.cnn.com/2005/09/06/pf/taxes/consumptiontax_0510/</ref>. Linbeck stated that Americans have to pressure the government to come up with a better way of taxation, he said, “It is painfully obvious that [[Washington, D.C.]] insiders so closely linked with the status quo cannot be trusted to overturn the corrupt system of federal taxation. This effort will have to be driven by the American people<ref>Americans For Fair Taxation http://boortz.com/nuze/200510/10132005.html</ref>." The organization hired experts to look into an idea for a better tax system, they spent 23 million dollars in coming up with the idea of the Fair Tax. Their findings were combined into a book, “The FairTax Book: Saying Goodbye to the Income Tax and the IRS,” which Linbeck co-authored with Republican Congressman John Linder<ref> “The Fair Tax Book”,2005, http://www.amazon.com/Fair-Tax-Book-Saying-Goodbye/dp/0060875496/ref=sr_1_1/102-3275846-3467353?ie=UTF8&s=books&qid=1184106196&sr=1-1</ref>.

The FairTax became popular among free market [[conservative]]s, [[libertarian]]s, and some economists in recent years. The complication and wasted bureaucracy of the [[Internal Revenue Service]], government pressure on citizens to reveal information and records, and the loopholes in the current tax system created the incentive to look for a new way of taxation in the United States. Some [[Democrats]] also sought a tax system that would rid them current income tax, which they claim to be discriminate.

In the last 20 years the [[United States]] tax system has been changed over 14,000 times, this has led to an abundance of complexities which lead to its being an inefficient system. In 2003, United States Senator [[Saxby Chambliss]], a [[Republican]], and Senator [[Zell Miller]] a Democrat; introduced a by-partisan version of the Fair Tax. Although the bill had some support in the [[Senate]], it eventually lost in a 50-50. Senator [[Sam Brownback]] later stated the challenges of tax reform, “When you take (the tax code) on straight on, you take on every lobbyist,"

===2005-2007===

Former Federal Reserve Chairman, [[Alan Greenspan]], called for a federal sales tax to replace the broken income tax in 2005. "Since the exemplary 1986 reform, the tax code has drifted back to be overly complicated and burdened by higher marginal rates and by many special provisions that have undesirably narrowed the tax base," Greenspan stated at a Presidential Advisory counsel<ref>Greenspan: "Consumption Tax COuld Help Economy",http://www.foxnews.com/story/0,2933,149298,00.html</ref>.

In 2005 congress created a bill to enact the FairTax (H.R. 25; Senate Bill 1943), it had the support of more then 54 co-sponsors, and both Senate and House minority leaders [[Dennis Hassert]] and [[Tom DeLay]]<ref>“The FairTax: A Trogan Horse For America,” Jews For Preservation of Firearms Ownership, http://www.jpfo.org/fairtax.htm#fn1</ref>. Although the bill received the most support ever for any fundamental tax reform bill, it failed to pass. After the elections of 2004, Georgia Republican Congressman, [[John Linder]], reintroduced the FairTax on the first day of the 109th congress<ref> “Linder Reintroduces FairTax Legislation”, http://www.johnlinder.com/News_Details.asp?NewsID=128</ref>. Congressman Linder stated before congress, “The time is ripe for fundamental tax and a completely new Federal tax regime. I am pleased to reintroduce my Fair Tax proposal today reform, and look forward to the Congress creating a fairer, simpler tax system that advances our core goals of lower taxes and more freedom for our citizens."<ref> “Linder Reintroduces FairTax Legislation”, http://www.johnlinder.com/News_Details.asp?NewsID=128</ref>.”

In 2007 support for the FairTax bill grew to include 60 co-sponsors<ref>FairTax Gains Support, http://www.fairtaxblog.com/20070508/record-sixty-co-sponsors-for-fairtax-bill-hr-25/</ref>.

One of the most outspoken supporters of the Fair Tax is Republican presidential candidate, [[Mike Huckabee]]. Huckabee has said that the Fair Tax would "put the IRS out of business, but put Americans in business<ref> Massachusetts For Mike Huckabee, http://massachusettsforhuckabee.blogspot.com/search/label/Tax%20Plan</ref>." 

== Supporters and Opponents==

[[Image:Fairtaxb.jpg|right|thumb|200px| A FairTax bus during a rally at the 2007 [[Republican]] [[Iowa Straw Poll]].]]
Most of the support for the FairTax comes from the [[Republican Party]] and the [[Libertarian]]s. A significant number of [[Conservative]]s want Republican presidential candidates to support the FairTax, including one Indiana group called ‘Hoosiers for Fair Taxation’<ref>”FairTax Supporters Vent Frustration”, June 2007, http://www.theindychannel.com/news/13651607/detail.html</ref>. <ref>”FairTaxer's continue to “flex their muscles”, July 2007, http://www.fairtax.org/site/PageServer?pagename=news_feature</ref>. Nevertheless, while the number of the members of Congress who have signed on to the proposal has been growing, it still lacks popular support to be close to passage. Former Arkansas governor and presidential candidate [[Mike Huckabee]] made passage of a national sales tax a part of his platform during his recent bid for office. Former Federal Reserve chief [[Alan Greenspan]] also exhibited support for the FairTax in a recent interview.<ref>Greenspan: Consumption Tax could Help Economy, Fox News, March 2005, http://www.foxnews.com/story/0,2933,149298,00.html</ref>

None of the 2008 Democratic Presidential candidates support the tax, in line with the general view of their party, although [[Mike Gravell]] indicated he could support a new kind of system based on consumption rather than income. [[Rudy Giuliania]], a one time candidate for President on the Republican side, was also hesitant and did not support it.<ref> “Giuliani Jeered For Opposing Flat Tax”, Associated Press, July 2007, http://www.forbes.com/feeds/ap/2007/07/07/ap3891710.html</ref>: "I don't think a Fair Tax is realistic change for America. Our economy is dependent upon the way our tax system operates<ref> “Giuliani Jeered For Opposing Flat Tax”, Associated Press, July 2007, http://www.forbes.com/feeds/ap/2007/07/07/ap3891710.html</ref>

==Criticism==

*Critics contend that the FairTax would have Constitutional issues. Supporters have painted the tax as an "[[excise]]", but opponents question this view believeing that an excise is a tax that is strictly limited to privileged or luxury goods and activities. They believe this view is confimed in other court rulings.<ref>http://www.conservapedia.com/Excise</ref> and the FairTax, including necessities, would therefore make it a [[Direct tax]], and not allowed under law. In ''Brushaber v. Union Pacific Railroad Co.'' (1916), the Supreme Court ruled that whenever any "[[excise]]" morphs into a tax on items of common right (such as anything necessary to preserve and carry out a normal life) "the duty would arise to disregard form and consider substance alone, and hence subject the tax to the regulation as to apportionment which otherwise as an excise would not apply to it."

*The FairTax would fail to close all loopholes. Purchases made overseas, although subject to the tax, would be difficult to track and therefore cheating might occur, much as it does now under the current system.

*A greater dependence on second-hand goods might occur, since they are exempt, and therefore alter the spending habits of the U.S. consumer.

*There is no cap on the rate that might be imposed by Congress. Just as current income tax rates change, the initial rate of 23% may be changed over time as Congress desires.

*It is argued that the FairTax would benefit the wealthy at the expense of the middle class. "It's these precious few people who control so much of this country's wealth that this tax is intended to benefit the most, since they actual(ly) spend a very small part of their personal wealth."<ref>http://www.cogitamusblog.com/2008/01/national-sales.html</ref>

==External Links==

*[http://www.fairtax.org/site/PageServer Americans for Fair Taxation]
*[http://www.factcheck.org/taxes/unspinning_the_fairtax.htm FactCheck.org]
 

==References==
<references/>

[[Category: Taxation]]
[[Category: Economics]]

FairTax

2009-06-24T02:53:56Z

Jeffg2: Corrected and copyedited

[[Image:FairTaxRally.jpg|thumb|350px|A pro FairTax rally in Florida]]
The '''FairTax''' is a tax proposal that would replace all federal [[income tax]]es — including corporate, gift, estate, capital gains, alternative minimum, [[Social Security]], [[Medicare]], and self employment taxes — with a federal national retail [[sales tax]]. The tax would be paid on the purchase of all new goods and services, and would be collected at the point of sale.<ref> Americans For Fair Taxation, “About the FairTax,” http://www.fairtax.org/site/PageServer?pagename=about_main</ref>

Thus, instead of taxing "income", the FairTax would tax spending. This is known as a [[consumption tax]] — a method for taxing income on the back end, when the money is spent, rather than when it is earned. In theory this would also allow the government to secure revenue from those who avoid paying taxes such as drug pushers of prostitutes, but who would still need goods and therefore pay under a FairTax system. The rate for the FairTax as proposed under current legislation is 23 percent of the total payment including the tax ($23 of every $100 spent in total—calculated similar to income taxes).<ref> "Embedded Taxes Change Fair Tax Analysis",http://www.roanoke.com/editorials/commentary/wb/wb/xp-51569</ref> This would be equivalent to a 30 percent traditional sales tax ($23 on top of every $77 spent—$100 total). Although some critics say it would be higher to be revenue neutral (take in the same amount as the current system).<ref> http://www.factcheck.org/taxes/unspinning_the_fairtax.html</ref>

The tax is voluntary to the extent that individual consumers can choose when to increase or decrease their product buying, unlike now, when income taxes are withheld from the paychecks of most workers. Second-hand goods are not taxed under the current proposal and consumption of necessities, such as food, are offset for the poor based on prebate checks sent from the government to U.S. citizens. It is estimated that 90% of U.S. households would pay some tax on these necessity items.<ref>http://pubdb3.census.gov/macro/032007/pov/new04_100_01.htm</ref>

==Proposal==
If passed, the Fair Tax would accomplish the following<ref> American For Fair Taxation, http://www.fairtax.org/site/PageServer?pagename=about_main</ref>:

* Abolish the [[Internal Revenue Service]] (IRS).
* Abolish personal [[income tax]]es.
* Repeal the [[16th Amendment]].
* Provide each worker a monthly prebate, equal to the tax on "poverty level" income. <ref> Just how fair is the ‘Fair Tax’ CNN Money, September 2005, http://money.cnn.com/2005/09/06/pf/taxes/consumptiontax_0510/</ref>
* Close many loopholes under the current system.
* Enable retirees to receive their full pension, untaxed, until they spend it.
* Enable workers to keep their entire paycheck, untaxed, until they spend it. 
* Proponents believe the removal of the above will save 265 billion dollars a year in compliance costs under the current tax system.<ref>http://www.fairtax.org/site/PageServer?pagename=about_fairtax_four#neutral</ref> and be more practical than the current system, which includes over 60,000 pages of tax code.<ref> 67,204-Page Code Confounds Taxpayers, Yet Congress Sits By, USA Today, http://www.usatoday.com/news/opinion/2007-04-03-edit_N.htm?csp=34 </ref>

==History==

===1986-2005===
[[Image:FairTax vs. Tax Code 2.jpg‎ |thumb|300px|Congressman [[John Linder]], one of the strongest proponents for the FairTax, illustrates the size of the current tax system vs the FairTax method]]
The modern Fair Tax idea was originally the brain-child of the [[Scientologist]]s, as part of their ongoing battle with the IRS. The most popular of initial plans for the Fair Tax was designed by [[Americans for Fair Taxation]] (AFFT), which is led by businessman Leo Linbeck<ref> Just how fair is the ‘FairTax’ CNN Money, September 2005, http://money.cnn.com/2005/09/06/pf/taxes/consumptiontax_0510/</ref>. Linbeck stated that Americans have to pressure the government to come up with a better way of taxation, he said, “It is painfully obvious that [[Washington, D.C.]] insiders so closely linked with the status quo cannot be trusted to overturn the corrupt system of federal taxation. This effort will have to be driven by the American people<ref>Americans For Fair Taxation http://boortz.com/nuze/200510/10132005.html</ref>." The organization hired experts to look into an idea for a better tax system, they spent 23 million dollars in coming up with the idea of the Fair Tax. Their findings were combined into a book, “The FairTax Book: Saying Goodbye to the Income Tax and the IRS,” which Linbeck co-authored with Republican Congressman John Linder<ref> “The Fair Tax Book”,2005, http://www.amazon.com/Fair-Tax-Book-Saying-Goodbye/dp/0060875496/ref=sr_1_1/102-3275846-3467353?ie=UTF8&s=books&qid=1184106196&sr=1-1</ref>.

The FairTax became popular among free market [[conservative]]s, [[libertarian]]s, and some economists in recent years. The complication and wasted bureaucracy of the [[Internal Revenue Service]], government pressure on citizens to reveal information and records, and the loopholes in the current tax system created the incentive to look for a new way of taxation in the United States. Some [[Democrats]] also sought a tax system that would rid them current income tax, which they claim to be discriminate.

In the last 20 years the [[United States]] tax system has been changed over 14,000 times, this has led to an abundance of complexities which lead to its being an inefficient system. In 2003, United States Senator [[Saxby Chambliss]], a [[Republican]], and Senator [[Zell Miller]] a Democrat; introduced a by-partisan version of the Fair Tax. Although the bill had some support in the [[Senate]], it eventually lost in a 50-50. Senator [[Sam Brownback]] later stated the challenges of tax reform, “When you take (the tax code) on straight on, you take on every lobbyist,"

===2005-2007===

Former Federal Reserve Chairman, [[Alan Greenspan]], called for a federal sales tax to replace the broken income tax in 2005. "Since the exemplary 1986 reform, the tax code has drifted back to be overly complicated and burdened by higher marginal rates and by many special provisions that have undesirably narrowed the tax base," Greenspan stated at a Presidential Advisory counsel<ref>Greenspan: "Consumption Tax COuld Help Economy",http://www.foxnews.com/story/0,2933,149298,00.html</ref>.

In 2005 congress created a bill to enact the FairTax (H.R. 25; Senate Bill 1943), it had the support of more then 54 co-sponsors, and both Senate and House minority leaders [[Dennis Hassert]] and [[Tom DeLay]]<ref>“The FairTax: A Trogan Horse For America,” Jews For Preservation of Firearms Ownership, http://www.jpfo.org/fairtax.htm#fn1</ref>. Although the bill received the most support ever for any fundamental tax reform bill, it failed to pass. After the elections of 2004, Georgia Republican Congressman, [[John Linder]], reintroduced the FairTax on the first day of the 109th congress<ref> “Linder Reintroduces FairTax Legislation”, http://www.johnlinder.com/News_Details.asp?NewsID=128</ref>. Congressman Linder stated before congress, “The time is ripe for fundamental tax and a completely new Federal tax regime. I am pleased to reintroduce my Fair Tax proposal today reform, and look forward to the Congress creating a fairer, simpler tax system that advances our core goals of lower taxes and more freedom for our citizens."<ref> “Linder Reintroduces FairTax Legislation”, http://www.johnlinder.com/News_Details.asp?NewsID=128</ref>.”

In 2007 support for the FairTax bill grew to include 60 co-sponsors<ref>FairTax Gains Support, http://www.fairtaxblog.com/20070508/record-sixty-co-sponsors-for-fairtax-bill-hr-25/</ref>.

One of the most outspoken supporters of the Fair Tax is Republican presidential candidate, [[Mike Huckabee]]. Huckabee has said that the Fair Tax would "put the IRS out of business, but put Americans in business<ref> Massachusetts For Mike Huckabee, http://massachusettsforhuckabee.blogspot.com/search/label/Tax%20Plan</ref>." 

== Supporters and Opponents==

[[Image:Fairtaxb.jpg|right|thumb|200px| A FairTax bus during a rally at the 2007 [[Republican]] [[Iowa Straw Poll]].]]
Most of the support for the FairTax comes from the [[Republican Party]] and the [[Libertarian]]s. A significant number of [[Conservative]]s want Republican presidential candidates to support the FairTax, including one Indiana group called ‘Hoosiers for Fair Taxation’<ref>”FairTax Supporters Vent Frustration”, June 2007, http://www.theindychannel.com/news/13651607/detail.html</ref>. <ref>”FairTaxer's continue to “flex their muscles”, July 2007, http://www.fairtax.org/site/PageServer?pagename=news_feature</ref>. Nevertheless, while the number of the members of Congress who have signed on to the proposal has been growing, it still lacks popular support to be close to passage. Former Arkansas governor and presidential candidate [[Mike Huckabee]] made passage of a national sales tax a part of his platform during his recent bid for office. Former Federal Reserve chief [[Alan Greenspan]] also exhibited support for the FairTax in a recent interview.<ref>Greenspan: Consumption Tax could Help Economy, Fox News, March 2005, http://www.foxnews.com/story/0,2933,149298,00.html</ref>

None of the 2008 Democratic Presidential candidates support the tax, in line with the general view of their party, although [[Mike Gravell]] indicated he could support a new kind of system based on consumption rather than income. [[Rudy Giuliania]], a one time candidate for President on the Republican side, was also hesitant and did not support it.<ref> “Giuliani Jeered For Opposing Flat Tax”, Associated Press, July 2007, http://www.forbes.com/feeds/ap/2007/07/07/ap3891710.html</ref>: "I don't think a Fair Tax is realistic change for America. Our economy is dependent upon the way our tax system operates<ref> “Giuliani Jeered For Opposing Flat Tax”, Associated Press, July 2007, http://www.forbes.com/feeds/ap/2007/07/07/ap3891710.html</ref>

==Criticism==

*Critics contend that the FairTax would have Constitutional issues. Supporters have painted the tax as an "[[excise]]", but opponents question this view believeing that an excise is a tax that is strictly limited to privileged or luxury goods and activities. They believe this view is confimed in other court rulings.<ref>http://www.conservapedia.com/Excise</ref> and the FairTax, including necessities, would therefore make it a [[Direct tax]], and not allowed under law. In ''Brushaber v. Union Pacific Railroad Co.'' (1916), the Supreme Court ruled that whenever any "[[excise]]" morphs into a tax on items of common right (such as anything necessary to preserve and carry out a normal life) "the duty would arise to disregard form and consider substance alone, and hence subject the tax to the regulation as to apportionment which otherwise as an excise would not apply to it."

*The FairTax would fail to close all loopholes. Purchases made overseas, although subject to the tax, would be difficult to track and therefore cheating might occur, much as it does now under the current system.

*A greater dependence on second-hand goods might occur, since they are exempt, and therefore alter the spending habits of the U.S. consumer.

*There is no cap on the rate that might be imposed by Congress. Just as current income tax rates change, the initial rate of 23% may be changed over time as Congress desires.

*It is argued that the FairTax would benefit the wealthy at the expense of the middle class. "It's these precious few people who control so much of this country's wealth that this tax is intended to benefit the most, since they actual(ly) spend a very small part of their personal wealth."<ref>http://www.cogitamusblog.com/2008/01/national-sales.html</ref>

==External Links==

*[http://www.fairtax.org/site/PageServer Americans for Fair Taxation]
*[http://www.factcheck.org/taxes/unspinning_the_fairtax.htm FactCheck.org]
 

==References==
<references/>

[[Category: Taxation]]
[[Category: Economics]]

Talk:FairTax

2009-06-24T02:41:22Z

Jeffg2: quick reply to Learn together

Who says the rebates would be monthly? And, if a sales tax is legal, why do you believe a FairTax, which really is a sales tax, would not be? I have also heard the idea of not taxing necessities such as groceries, much as is currently done with the sales tax. Don't you think this would occur during the negotiation aspect as the bill would pick up support and become close to being a reality? There is certainly precedence for this occurring in Congressional discussions is there not? [[User:Learn together|Learn together]] 10:55, 21 April 2008 (EDT)

:The legislation says the rebates would be monthly. The plan uses the rebates to untax poverty level spending, this is done to prevent decreasing the tax base by creating exemptions (as then the special interests would line up to exempt their goods). It allows them to define a level of untaxing necessity, without defining what those necessities are for any particular family. I believe language has been put in the bill in the 111th Congress that would require a supermajority vote of Congress to exempt any industry from the tax. Glancing through the article, there are tons of factual errors that I'll try to correct. [[User:Jeffg2|Jeffg2]] 22:41, 23 June 2009 (EDT)

User talk:Jeffg2

2009-06-24T02:39:37Z

Jeffg2: Reply to Jpatt

{{Welcome|sig=--[[User:Jpatt|Jpatt]] 22:30, 23 June 2009 (EDT)}}

Morphh is that you?

:Yes, finally got on. Not sure if you prefer a reply here or on your talk page. Sorry, I misunderstood what you were trying to tell me. I thought you wanted me to recreate the account and put my firstname lastinit in the field for my name. Not recreate my account with that name. So I was looking for a way to delete my account and recreate it. I also couldn't post to your talk to ask questions. [[User:Jeffg2|Jeffg2]]