Issue Position: The FairTax
I am the primary sponsor of The FairTax. The FairTax is one of the most exciting proposals to ever reach the American people. It offers long-needed tax relief - in the form of lower prices, nearly nonexistent compliance costs, and the ability to choose how much to spend in taxes - to all Americans, while eliminating the income tax and allowing Americans to keep 100 percent of their paycheck. The FairTax will dramatically reduce prices, protect and ensure funding of Social Security and Medicare, empower the low-income earners, and put choice and control back into the hands of every American. All the crucial elements are in place: a public that is eager and ready for a fairer tax system, and a Congress willing to seriously consider genuine tax reform. To be competitive in the next century and to renew the American dream, we must change the way we fund our national government.
The FairTax Act:
Repeals the all corporate and individual income taxes, payroll taxes, self-employment taxes, capital gains taxes, estate taxes and gift taxes.
Imposes a revenue-neutral personal consumption tax on the purchase of all new goods and services at the point of final purchase for consumption. Business-to-business transactions and used products (which have already been taxed) are not subject to the FairTax.
Rebates the FairTax on all spending up to the poverty level.
Results of the FairTax:
Dramatically reduce the costs of goods and services by 20 to 30 percent.
Allow you to keep 100 percent of your paycheck, pension, and Social Security payments.
Gross Domestic Product will increase by almost 10.5 percent in the first year after enactment.
Compliance costs would decrease by 90 percent.
Real investment would initially increase by 76 percent relative to the investment that would be made under present law. While this increase would gradually decline, it remains 15 percent higher than under the existing tax structure.
Exports would increase by 26 percent initially and would remain more than 13 percent above the level under the current tax system.
Real wages will increase.
Increases incentives to work by as much as 20 percent in many households, leading to higher economic growth and efficiency.
Interest rates will fall 25 to 35 percent.
If you would like review the significant benefits of the FairTax in greater detail, please take some time to visit the "FairTax" section of my website located in the "Resource Headquarters."