Here are some key attributes of the FAIRtax which is a system that allows you to keep your whole paycheck and only pay taxes on what you spend.
- National Sales Tax: Replaces federal income and payroll taxes with a single national sales tax on new goods and services¹.
- Prebate System: Provides a monthly prebate to all legal residents to cover taxes on essential goods and services up to the poverty level¹.
- Eliminates the IRS: Abolishes the Internal Revenue Service (IRS) and simplifies the tax system².
- Fairness and Transparency: Aims to create a fairer and more transparent tax system by taxing consumption rather than income¹.
- Economic Growth: Designed to promote economic growth by allowing individuals to keep their entire paycheck and only pay taxes on what they spend¹.
- Social Security and Medicare: Ensures funding for Social Security and Medicare through the consumption tax rather than payroll taxes¹.
The FairTax is a national sales tax that treats every person equally and allows American businesses to thrive, while generating the same tax revenue as the current four-million-word-plus tax code.
Under the FairTax, every person living in the United States pays a sales tax on purchases of new goods and services, excluding necessities due to the prebate.
The FairTax rate after necessities is 23% compared to combining the 15% income tax bracket with the 7.65% of employee payroll taxes under the current system – both of which will be eliminated!
Important to note: the FairTax is the only tax plan currently being proposed that includes the removal of the payroll tax.
(1) How FAIRtax Works | FAIRtax | fairtax.org. https://fairtax.org/about/how-fairtax-works.
(2) Welcome | FAIRtax | fairtax.org. https://fairtax.org/.
(3) About Americans For Fair Taxation | FAIRtax | fairtax.org. About Americans For Fair Taxation | FAIRtax | fairtax.org.