What Is The FairTax Plan?
The FairTax is a bill before the U.S. Congress—called H.R. 25 in the House and S. 25 in the
Senate—that replaces the federal income tax with a national retail sales tax of 23% on new
goods and services for personal use, eliminating the following taxes:
- Personal Income Tax (Federal Tax)
- Social Security (FICA) Tax
- Medicare Tax
- Estate Tax
- Gift Tax
- Capital Gains Tax
- The Alternative Minimum Tax
- Self-Employment Tax
- Corporate Tax
Additional Note:
The FairTax was a plan born from the efforts of Americans for Fair Taxation (FairTax.org),
which first began as a research effort. AFFT was committed to seeking possible remedies to the
current convoluted and unfair tax system. Concerned citizens came together and commissioned various
studies that looked at a replacement, or a restructuring, of the current system. A diverse sampling
of Americans became part of extensive focus group studies to find out what Americans wanted
from their tax system. Through these exhaustive studies, it was determined that the
only fair way to tax Americans was via a consumption tax. The FairTax
plan evolved as a way of meeting all Americans needs.
An impressive sampling of the founding research participants include:
- Harvard
- The Heritage Foundation
- MIT
- National Bureau of Economic Research
- Stanford
- Boston University
- The Cato Institute
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