I am the primary sponsor of the FairTax, legislation that will repeal all corporate and individual income taxes, payroll taxes, self-employment taxes, capital gains taxes, estate taxes and gift taxes - and replace it with a revenue-neutral personal consumption tax. The FairTax is one of the most exciting proposals to ever reach the American people. In order to keep those who are interested up-to-date on all the important FairTax developments, I have created a new FairTax website that will serve as a place where everyone can come to find answers to anything FairTax-related that they have questions about. The new site will always be adding new media stories, new FAQs, and, very importantly, we will always be adding new cosponsors.
I would also encourage everyone to review the FairTax, as it is only 133 pages, which stands in stark contrast to the tens of thousands of pages of tax code laws and regulations currently in effect. There are a number of key principles of fundamental tax reform. The FairTax abides by these principles and achieves the critical objective of simple, fair and growth-oriented tax reform.
I am more enthusiastic than ever about seeing the FairTax become reality, and more and more of my colleagues have expressed interest in the FairTax because they are hearing about it from their constituents. I hope you will read the transcript of a fundamental tax reform debate in the House chamber in which we outlined the benefits of fundamental tax reform and the dangers of ignoring the problems that our nation faces precisely because of our current tax system.
The FairTax offers long-needed tax relief, eliminates the income tax and allows Americans to keep 100 percent of their paycheck. The FairTax will eliminate embedded costs, 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. To be competitive in the next century and to renew the American dream, we must change the way we fund our national government.
This bill is gaining momentum. Articles by George Will and Scott Burns have focused on the possible elimination of our complicated tax code. I also urge you to review additional news and editorials written about the FairTax, read the complete text of H.R. 25, and spread the word about the benefits of the FairTax. The FairTax has attracted more co-sponsors than than any other fundamental tax reform bill introduced in the House of Representatives. There are many questions about how the FairTax will eliminate costs, strengthen the economy and make April 15th just another spring day. If you have questions about the FairTax or want to learn more about how the FairTax will change the world for our children and grandchildren, please review my FairTax Frequently Asked Questions page.
In this country, we spend too much time and money accommodating the growing complexity and oppressiveness of the federal tax structure. The time for fundamental reform is now, and I hope you will review the text of the FairTax (H.R. 25) and also compare the benefits of the FairTax with the current system and other proposals. I think you will agree that the possibility of putting the nation on a simple, fair, and voluntary tax system is building excitement among folks across the country every day. I have summarized this revolutionary legislation below.
- Repeals 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 all new goods and services at the point of final purchase. Business-to-business transactions and used products (which have already been taxed) are not subject to the sales tax.
- Rebates the sales tax on all spending up to the poverty level.
- Allows you to keep 100 percent of your paycheck, pension, and Social Security payments.
- Gross Domestic Product would 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 would increase.
- Increases incentives to work by as much as 20 percent in many households, leading to higher economic growth and efficiency.
- Interest rates would fall 25 to 35 percent.