A: |
It doesn’t. Of all Federal revenues, 43% come from personal income taxes, 39% come from payroll taxes (both employer and employee), 10% come from corporate income taxes, and the remaining 8% come from excise taxes and other sources. The FairTax only impacts those first three categories, totaling 92% of all Federal revenues.
Some people ask why the FairTax doesn’t go ahead and replace/eliminate that last 8% of taxes, as well. It’s a good question with an easy answer: politics. That last 8% includes not only most telephone taxes but also tobacco taxes, alcohol taxes, gun taxes, user fees, and trade tariffs. Each of these categories is a complicated legislative battle all by itself.
When we wrote the FairTax, we realized that it was going to be an enormous battle that required enormous grass-roots support and unprecedented political cooperation. Realizing this, it simply didn’t make any sense to drag guns, cigarettes, alcohol, telephones, and the rest into the debate. Those may all be debates worth having, but let’s pass the FairTax first, and then let’s have those other discussions. |
