Fair Tax Facts and Myths
May 15, 2011 1 Comment
When you purchase anything (new or used), currently there are embedded taxes in the price. These taxes are, on average, 22% of the cost. The Fair Tax REPLACES those taxes with a 23% inclusive tax (meaning, the price you will pay will remain unchanged), BUT since you will also have your entire paycheck AND a new monthly prebate check, you will have MORE disposable income than you do under the current tax system.
The Fair Tax is a REPLACEMENT TAX, not an added tax. (23%-23%=0%)
With the Fair Tax, Tax Freedom Day (the day you start earning for yourself instead of the government) will be January 1 instead of the middle of April.
The Fair Tax rate of 23 percent on a total taxable consumption base of $11.244 trillion will generate $2.586 trillion dollars $358 billion more than the taxes it replaces.
The Fair Tax has the broadest base and the lowest rate of any single-rate tax reform plan.
Real wages are 10.3 percent, 9.5 percent, and 9.2 percent higher in years 1, 10, and 25, respectively than would otherwise be the case.
Disposable personal income is higher than if the current tax system remains in place: 1.7 percent in year 1, 8.7 percent in year 5, and 11.8 percent in year 10.
The economy as measured by GDP is 2.4 percent higher in the first year and 11.3 percent higher by the 10th year than it would otherwise be.
Consumption increases by 2.4 percent more in the first year, which grows to 11.7 percent more by the tenth year than it would be if the current system were to remain in place.
The increase in consumption is fueled by the 1.7 percent increase in disposable (after-tax) personal income that accompanies the rise in incomes from capital and labor once the Fair Tax is enacted.
By the 10th year, consumption increases by 11.7 percent over what it would be if the current tax system remained in place, and disposable income is up by 11.8 percent.
Over time, the Fair Tax benefits all income groups. Of 42 household types (classified by income, marital status, age), all have lower average remaining lifetime tax rates under the Fair Tax than they would experience under the current tax system.
Implementing the Fair Tax at a 23 percent rate gives the poorest members of the generation born in 1990 a 13.5 percent improvement in economic well-being; their middle class and rich contemporaries experience a 5 percent and 2 percent improvement, respectively.
Based on standard measures of tax burden, the Fair Tax is more progressive than the individual income tax, payroll tax, and the corporate income tax.
Charitable giving increases by $2.1 billion (about 1 percent) in the first year over what it would be if the current system remained in place, by 2.4 percent in year 10, and by 5 percent in year 20.
On average, states could cut their sales tax rates by more than half, or 3.2 percentage points from 5.4 to 2.2 percent, if they conformed their state sales tax bases to the Fair Tax base.
The Fair Tax provides the equivalent of a supercharged mortgage interest deduction, reducing the true cost of buying a home by 19 percent.
The Fair Tax enables workers to keep their entire paychecks.
The Fair Tax enables retirees to keep their entire pensions.
The Fair Tax refunds in advance the tax on purchases of basic necessities.
The Fair Tax allows American products to compete fairly.
The Fair Tax brings transparency and accountability to tax policy.
The Fair Tax ensures Social Security and Medicare funding.
The Fair Tax closes all loopholes and brings fairness to taxation.
The Fair Tax abolishes the IRS.
The Fair Tax Act of 2011 (H.R.25, S.13, H.J. Res. 16) is a NON-PARTISAN Bill supported by both Liberals and Conservatives.
The Fair Tax Act (H.R.25, S.13) is NON-PARTISAN legislation.
The Fair Tax abolishes all federal personal and corporate income taxes, gift (LOTTERY & other WINNINGS), estate (DEATH), capital gains, alternative minimum, Social Security, Medicare, and self-employment taxes and replaces them with one simple, visible, federal retail sales tax administered primarily by existing state sales tax authorities.
The Fair Tax provides all valid Social Security cardholders who are U.S. residents a monthly prebate equivalent to the Fair Tax paid on essential goods and services, also known as the poverty level expenditures. Learn more right here.
The Fair Tax is a single-rate, federal retail sales tax collected only once, at the final point of purchase of new goods and services for personal consumption.
The Fair Tax DOES NOT TAX USED ITEMS.
The Fair Tax DOES NOT TAX Business-to-business purchases for the production of goods and services.
The Fair Tax is replacement, NOT REFORM. It will replace the current 70,000+ pages of the Internal Revenue Code with a 130+ document.
The Fair Tax does not affect Social Security benefits.
The Fair Tax protects lowand lower-middle-income families and individuals.
“The 23% rate is misleading. It’s actually 30%”. Well, actually… Learn why it ISN’T misleading right here.
“It’s not enforceable and evasion will be rampant”. Well, actually… Learn how it will erradicate tax evasion right here.
“It will not be revenue neutral at 23%”. Well, actually… Learn how $22 Million Dollars in research has proven that 23% IS revenue neutral right here.
“The Fair Tax is not politically viable”. Well, actually… Learn how Fair Tax.org has recently increased its political foundation right here
“The Fair Tax is regressive and shifts the tax burden onto lower and middle income people”. Well, actually… Learn how the Fair Tax broadens the tax base and reimburses ALL US CITIZENS equally right here.
The Fair Tax was cooked up by the Church of Scientology (It seems that this was used as an attempt to actually smear the Fair Tax some years back, but today it’s simply laughable compared to some of the more common criticisms right here.
The Fair Tax does not apply to Chuck Norris. Chuck Norris taxes you with a roundhouse kick to the head.
The Fair Tax will not protect you from Chuck Norris.
The Fair Tax will reduce the amount of tax you pay, but it will not reduce the amount of pain Chuck Norris can inflict.
The Fair Tax is fair to all, Chuck Norris is only fair to Chuck Norris.
The Fair Tax does not have a beard.
The Fair Tax will not require you to file a Federal Income Tax return. Chuck Norris is not required to file his toenails before he executes a roundhouse kick to your ear.
The Fair Tax will regrow hair, end world hunger, cure cancer, end all crime, or fix some other social problem completely unrelated to taxation.
The Fair Tax is your new bicycle.