FairTax

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Not to be confused with Illinois Fair Tax or Fairtex.
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FairTax is a

Social Security and Medicare taxes), gift taxes, and estate taxes, replacing them with a single consumption tax
on retail sales.

The proposed Fair Tax Act (H.R. 25/S. 18) would apply a tax, once, at the point of purchase on all new

bill; however, it did not move from committee. A campaign in 2005 for the FairTax proposal[4] involved Leo E. Linbeck and the Fairtax.org. Talk radio personality Neal Boortz and Georgia Congressman John Linder published The FairTax Book in 2005 and additional visibility was gained in the 2008 presidential campaign
.

As defined in the proposed legislation, the initial sales tax rate is 30% (i.e. a purchase of $100 would incur a sales tax of $30, resulting in a total price to the consumer of $130). Advocates promote this as a 23% tax inclusive rate based on the total amount paid including the tax, which is the method currently used to calculate income tax liability.[5] In subsequent years the rate could adjust annually based on federal receipts in the previous fiscal year.[6] With the rebate taken into consideration, the FairTax would be progressive on consumption,[3] but would still be regressive on income (since consumption as a percentage of income falls at higher income levels).[7][8] Opponents argue this would accordingly decrease the tax burden on high-income earners and increase it on the lower class earners.[5][9] Supporters contend that the plan would effectively tax wealth, increase purchasing power[10][11] and decrease tax burdens by broadening the tax base.

Advocates expect a consumption tax to increase

budget deficit.[5][16] The proposed Fairtax might cause removal of tax deduction incentives, transition effects on after-tax savings, incentives on credit use and the loss of tax advantages to state and local bonds. It also includes a sunset clause if the 16th Amendment to the US Constitution
is not repealed within seven years of its enactment.

Legislative overview and history

Rep John Linder holding the 133 page Fair Tax Act of 2007 in contrast to the then-current U.S. tax code and IRS regulations

The legislation would remove the Internal Revenue Service (after three years), and establish Excise Tax and Sales Tax bureaus in the Department of the Treasury.[17] The states are granted the primary authority for the collection of sales tax revenues and the remittance of such revenues to the Treasury. The plan was created by Americans For Fair Taxation, an advocacy group formed to change the tax system. The group states that, together with economists, it developed the plan and the name "Fair Tax", based on interviews, polls, and focus groups of the general public.[5] The FairTax legislation has been introduced in the House by Georgia Republicans John Linder (1999–2010) and Rob Woodall (2011–2014),[18] while being introduced in the Senate by Georgia Republican Saxby Chambliss (2003–2014).

Linder first introduced the Fair Tax Act (H.R. 2525) on July 14, 1999, to the

Henry M. Paulson.[30]

To become law, the bill will need to be included in a final version of tax legislation from the

tax brackets
from seven to three.

Tax rate

The sales tax rate, as defined in the legislation for the first year, is 23% of the total payment including the tax ($23 of every $100 spent in total—calculated similar to income taxes). This would be equivalent to a 30% traditional U.S. sales tax ($23 on top of every $77 spent—$100 total, or $30 on top of every $100 spent—$130 total).[5] After the first year of implementation, this rate is automatically adjusted annually using a predefined formula reflecting actual federal receipts in the previous fiscal year.

The

budget deficit, unless government spending were equally reduced.[5]

Sales tax rate

During the first year of implementation, the FairTax legislation would apply a 23% federal

tax-exclusive; this rate is not directly comparable with existing income and employment taxes).[5] After the first year of implementation, this tax rate would be automatically adjusted annually using a formula specified in the legislation that reflects actual federal receipts in the previous fiscal year.[6]

Effective tax rate

Further information: Distribution of the FairTax burden

A household's

effective tax rate on consumption would vary with the annual expenditures on taxable items and the fixed monthly tax rebate. The rebate would have the greatest effect at low spending levels, where they could lower a household's effective rate to zero or below.[10] The lowest effective tax rate under the FairTax could be negative due to the rebate for households with annual spending amounts below poverty level spending for a specified household size. At higher spending levels, the rebate has less impact, and a household's effective tax rate would approach 23% of total spending.[10]
A person spending at the poverty level would have an effective tax rate of 0%, whereas someone spending at four times the poverty level would have an effective tax rate of 17.2%. Buying or otherwise receiving items and services not subject to federal taxation (such as a used home or car) can contribute towards a lower effective tax rate. The total amount of spending and the proportion of spending allocated to taxable items would determine a household's effective tax rate on consumption. If a rate is calculated on income, instead of the tax base, the percentage could exceed the statutory tax rate in a given year.

Monthly tax rebate

Proposed 2015 FairTax Prebate Schedule[35]
One adult household Two adult household
Family
Size 		Annual
Consumption
Allowance 		Annual
Prebate 		Monthly
Prebate 		Family
Size 		Annual
Consumption
Allowance 		Annual
Prebate 		Monthly
Prebate
1 person $11,770 $2,707 $226 couple $23,540 $5,414 $451
and 1 child $15,930 $3,664 $305 and 1 child $27,700 $6,371 $531
and 2 children $20,090 $4,621 $385 and 2 children $31,860 $7,328 $611
and 3 children $24,250 $5,578 $465 and 3 children $36,020 $8,285 $690
and 4 children $28,410 $6,534 $545 and 4 children $40,180 $9,241 $770
and 5 children $32,570 $7,491 $624 and 5 children $44,340 $10,198 $850
and 6 children $36,490 $8,393 $699 and 6 children $48,500 $11,155 $930
and 7 children $40,890 $9,405 $784 and 7 children $52,660 $12,112 $1,009
The annual consumption allowance is based on the 2015 DHHS Poverty Guidelines as published in the Federal Register, January 22, 2015. There is no marriage penalty as the couple amount is twice the amount that a single adult receives. For families/households with more than 8 persons, add $4,160 to the annual consumption allowance for each additional person. The annual consumption allowance is the amount of spending that is "untaxed" under the FairTax.

Under the FairTax,

U.S. Department of Health and Human Services.[2] The FCA is a tax rebate (known as a "prebate" as it would be an advance) paid in twelve monthly installments, adjusted for inflation. The rebate is meant to eliminate the taxation of household necessities and make the plan progressive.[5] Households would register once a year with their sales tax administering authority, providing the names and social security numbers of each household member.[2] The Social Security Administration would disburse the monthly rebate payments in the form of a paper check via U.S. Mail, an electronic funds transfer to a bank account, or a "smartcard" that can be used like a debit card.[2]

Opponents of the plan criticize this tax rebate due to its costs. Economists at the

welfare payment regardless of need.[38]

The

Joint Committee on Taxation.[36] They argue this is $456 billion more than the FairTax "entitlement" (tax refund) would spend to cover each person's tax expenses up to the poverty level. In addition, it was estimated for 2005 that the Internal Revenue Service was already sending out $270 billion in refund checks.[36]

Presentation of tax rate

Mathematically, a 23% tax out of $100 yields approximately the same as a 30% tax on $77.

Sales and income taxes behave differently due to differing definitions of tax base, which can make comparisons between the two confusing. Under the existing individual income plus employment (Social Security; Medicare; Medicaid) tax formula, taxes to be paid are included in the base on which the tax rate is imposed (known as

tax-exclusive
). A good priced at $77 with a 30% sales tax rate yields $23 in taxes owed. To adjust an inclusive rate to an exclusive rate, divide the given rate by one minus that rate (i.e. ).

The FairTax

FactCheck called the presentation misleading, saying that it hides the real truth of the tax rate.[42] Bruce Bartlett stated that polls show tax reform support is extremely sensitive to the proposed rate,[38] and called the presentation confusing and deceptive based on the conventional method of calculating sales taxes.[43]
Proponents believe it is both inaccurate and misleading to say that an income tax is 23% and the FairTax is 30% as it implies that the sales tax burden is higher.

Revenue neutrality

Main article: Revenue neutrality of the FairTax

A key question surrounding the FairTax is whether the tax has the ability to be revenue-neutral; that is, whether the tax would result in an increase or reduction in overall federal tax revenues. Economists, advisory groups, and political advocacy groups disagree about the tax rate required for the FairTax to be truly revenue-neutral. Various analysts use different assumptions, time-frames, and methods resulting in dramatically different

tax rates making direct comparison among the studies difficult. The choice between static or dynamic scoring further complicates any estimate of revenue-neutral rates.[44]

A 2006 study published in

U.S. government debt.[45] Nor did these studies account for any increased economic growth that many economists researching the plan believe would occur.[45][48][49][50]

In contrast to the above studies,

President's Advisory Panel for Federal Tax Reform performed a 2006 analysis to replace the individual and corporate income tax with a retail sales tax and estimated the rate to be 25% (34% tax-exclusive) assuming 15% tax evasion, and 33% (49% tax-exclusive) with 30% tax evasion.[9] The rate would need to be substantially higher to replace the additional taxes replaced by the FairTax (payroll, estate, and gift taxes). Beacon Hill Institute, FairTax.org, and Kotlikoff criticized the President's Advisory Panel's study as having allegedly altered the terms of the FairTax, using unsound methodology, and/or failing to fully explain their calculations.[36][45][53]

Taxable items and exemptions

The tax would be levied once at the final retail sale for personal consumption on new goods and services. Purchases of used items,

education tuition expenses would be exempt as they would be considered an investment (rather than final consumption).[54]

A good would be considered "used" and not taxable if a consumer already owns it before the FairTax takes effect or if the FairTax has been paid previously on the good, which may be different from the item being sold previously. Personal services such as health care, legal services, financial services, and auto repairs would be subject to the FairTax, as would renting apartments and other real property.[5] Food, clothing, prescription drugs, and medical services would be taxed. (State sales taxes generally exempt these types of basic-need items in an effort to reduce the tax burden on low-income families. The FairTax would use a monthly rebate system instead of the common state exclusions.) Internet purchases would be taxed, as would retail international purchases (such as a boat or car) that are imported to the United States (collected by the U.S. Customs and Border Protection).[54]

Distribution of tax burden

Main article: Distribution of the FairTax burden
Working paper by Kotlikoff and Rapson[10] of the FairTax. Lower rates claimed on workers from a larger tax base, replacing regressive taxes, and wealth taxation.
President's Advisory Panel's
analysis of a hybrid National Sales Tax. Higher rates claimed on the middle-class for an income tax replacement (excludes payroll, estate, and gift taxes replaced under the FairTax).

The FairTax's effect on the distribution of taxation or tax incidence (the effect on the distribution of economic welfare) is a point of dispute. The plan's supporters argue that the tax would broaden the tax base, that it would be progressive, and that it would decrease tax burdens and start taxing wealth (reducing the economic gap).[10] Opponents argue that a national sales tax would be inherently regressive and would decrease tax burdens paid by high-income individuals.[5][55] A person earning $2 million a year could live well spending $1 million, and as a result pay a mere 11% of that year's income in taxes.[5] Households at the lower end of the income scale spend almost all their income, while households at the higher end are more likely to devote a portion of income to saving. Therefore, according to economist William G. Gale, the percentage of income taxed is regressive at higher income levels (as consumption falls as a percentage of income).[7]

Income earned and saved would not be taxed until spent under the proposal. Households at the extreme high end of consumption often finance their purchases out of savings, not income.

wages plus taxing wealth.[3] A household of three persons (this example will use two adults plus one child; the rebate does not consider marital status) spending $30,000 a year on taxable items would devote about 3.4% of total spending ([$6,900 tax minus $5,888 rebate]/$30,000 spending) to the FairTax after the rebate. The same household spending $125,000 on taxable items would spend around 18.3% ([$28,750 tax minus $5,888 rebate]/$125,000 spending) on the FairTax. At higher spending levels, the rebate has less impact and the rate approaches 23% of total spending. Thus, according to economist Laurence Kotlikoff, the effective tax rate is progressive on consumption.[3]

An unreviewed paper by Kotlikoff and David Rapson states that the FairTax would significantly reduce marginal taxes on work and saving, lowering overall average remaining lifetime tax burdens on current and future workers.[10][56] A study by Kotlikoff and Sabine Jokisch concluded that the long-term effects of the FairTax would reward low-income households with 26.3% more purchasing power, middle-income households with 12.4% more purchasing power, and high-income households with 5% more purchasing power.[11] The Beacon Hill Institute reported that the FairTax would make the federal tax system more progressive and would benefit the average individual in almost all expenditures deciles.[8] In another study, they state the FairTax would offer the broadest tax base (an increase of over $2 trillion), which allows the FairTax to have a lower tax rate than current tax law.[57]

Gale analyzed a national sales tax (though different from the FairTax in several aspects

payroll tax (a 15.3% total tax not included in the Tax Panel study;[9] payroll taxes include a 12.4% Social Security tax on wages up to $97,500 and a 2.9% Medicare tax, a 15.3% total tax that is often split between employee and employer) greatly changes the tax distribution, and that the FairTax would relieve the tax burden on middle-class workers.[3][53]

Predicted effects

Main article: Predicted effects of the FairTax

The predicted effects of the FairTax are a source of disagreement among economists and other analysts.

home ownership and charitable contributions.[59] There is also concern about the effect on the income tax industry and the difficulty of repealing the Sixteenth Amendment (to prevent Congress from re-introducing an income tax).[60]

Economic

Further information: Predicted effects of the FairTax § Economic effects

Americans For Fair Taxation states the FairTax would boost the United States economy and offers a letter signed by eighty economists, including

macroeconomic improvement in both the short and long-term, but warned of transitional issues.[52]

FairTax proponents argue that the proposal would provide tax burden visibility and reduce compliance and efficiency costs by 90%, returning a large share of money to the productive economy.

House Ways and Means Committee, asked Princeton University Econometrics to survey 500 European and Asian companies regarding the effect on their business decisions if the United States enacted the FairTax. 400 of those companies stated they would build their next plant in the United States, and 100 companies said they would move their corporate headquarters to the United States.[63] Supporters argue that the U.S. has the highest combined statutory corporate income tax rate among OECD countries along with being the only country with no border adjustment element in its tax system.[64] Proponents state that because the FairTax eliminates corporate income taxes and is automatically border adjustable, the competitive tax advantage of foreign producers would be eliminated, immediately boosting U.S. competitiveness overseas and at home.[65]

Opponents point to a study commissioned by the

supply-side effects and would create a powerful disincentive to spend money.[55] John Linder states an estimated $11 trillion is held in foreign accounts (largely for tax purposes), which he states would be repatriated back to U.S. banks if the FairTax were enacted, becoming available to U.S. capital markets, bringing down interest rates, and otherwise promoting economic growth in the United States.[12] Attorney Allen Buckley states that a tremendous amount of wealth was already repatriated under law changes in 2004 and 2005.[67] Buckley also argues that if the tax rate was significantly higher, the FairTax would discourage the consumption of new goods and hurt economic growth.[67]

Transition

Further information: Predicted effects of the FairTax § Transition effects
personal consumption expenditures and adjusted gross income

During the transition, many or most of the employees of the IRS (105,978 in 2005)[68] would face loss of employment.[45] The Beacon Hill Institute estimate is that the federal government would be able to cut $8 billion from the IRS budget of $11.01 billion (in 2007), reducing the size of federal tax administration by 73%.[45] In addition, income tax preparers (many seasonal), tax lawyers, tax compliance staff in medium-to-large businesses, and software companies which sell tax preparation software could face significant drops, changes, or loss of employment. The bill would maintain the IRS for three years after implementation before completely decommissioning the agency, providing employees time to find other employment.[17]

In the period before the FairTax is implemented, there could be a strong incentive for individuals to buy goods without the sales tax using credit. After the FairTax is in effect, the credit could be paid off using untaxed payroll. If credit incentives do not change, opponents of the FairTax worry it could exacerbate an existing consumer debt problem. Proponents of the FairTax state that this effect could also allow individuals to pay off their existing (pre-FairTax) debt more quickly,[12] and studies suggest lower interest rates after FairTax passage.[61]

Individuals under the current system who accumulated savings from ordinary income (by choosing not to spend their money when the income was earned) paid taxes on that income before it was placed in savings (such as a Roth IRA or CD). When individuals spend above the poverty level with money saved under the current system, that spending would be subject to the FairTax. People living through the transition may find both their earnings and their spending taxed.[69] Critics have stated that the FairTax would result in unfair double taxation for savers and suggest it does not address the transition effect on some taxpayers who have accumulated significant savings from after-tax dollars, especially retirees who have finished their careers and switched to spending down their life savings.[39][69] Supporters of the plan argue that the current system is no different, since compliance costs and "hidden taxes" embedded in the prices of goods and services cause savings to be "taxed" a second time already when spent.[69] The rebate would supplement accrued savings, covering taxes up to the poverty level. The income taxes on capital gains, estates, social security and pension benefits would be eliminated under FairTax. In addition, the FairTax legislation adjusts Social Security benefits for changes in the price level, so a percentage increase in prices would result in an equal percentage increase to Social Security income.[17] Supporters suggest these changes would offset paying the FairTax under transition conditions.[12]

Other indirect effects

Further information: Predicted effects of the FairTax § Other indirect effects

The FairTax would be tax free on mortgage interest up to the

burden of proof, and due process.[15]

If the FairTax bill were passed, permanent elimination of income taxation would not be guaranteed; the FairTax bill would repeal much of the existing

unconstitutional.[67]

Changes in the retail economy

See also: Tax § Economics of taxation, and Effect of taxes and subsidies on price

Since the FairTax would not tax used goods, the value would be determined by the supply and demand in relation to new goods.[74] The price differential/margins between used and new goods would stay consistent, as the cost and value of used goods are in direct relationship to the cost and value of the new goods. Because the U.S. tax system has a hidden effect on prices, it is expected that moving to the FairTax would decrease production costs from the removal of business taxes and compliance costs, which is predicted to offset a portion of the FairTax effect on prices.[12]

Value of used goods

Since the FairTax would not tax used goods, some critics have argued that this would create a differential between the price of new and used goods, which may take years to equalize.[38] Such a differential would certainly influence the sale of new goods like vehicles and homes. Similarly, some supporters have claimed that this would create an incentive to buy used goods, creating environmental benefits of re-use and re-sale. Conversely, it is argued that like the income tax system that contains embedded tax cost (see Theories of retail pricing),[75] used goods would contain the embedded FairTax cost.[69] While the FairTax would not be applied to the retail sales of used goods, the inherent value of a used good includes the taxes paid when the good was sold at retail. The value is determined by the supply and demand in relation to new goods.[74] The price differential/margins between used and new goods should stay consistent, as the cost and value of used goods are in direct relationship to the cost and value of the new goods.

Theories of retail pricing

A supply and demand diagram illustrating taxes' effect on prices

Based on a study conducted by

Federal Reserve monetary authorities.[30][38][78] Non-accommodation of the money supply would suggest retail prices and take home pay stay the same—embedded taxes are replaced by the FairTax. Full accommodation would suggest prices and incomes rise by the exclusive rate (i.e., 30%)—embedded taxes become windfall gains. Partial accommodation would suggest a varying degree in-between.[30][78]

If businesses provided employees with gross pay (including income tax withholding and the employee share of payroll taxes),[45] Arduin, Laffer & Moore Econometrics estimated production costs could decrease by a minimum of 11.55% (partial accommodation).[48] This reduction would be from the removal of the remaining embedded costs, including corporate taxes, compliance costs, and the employer share of payroll taxes. This decrease would offset a portion of the FairTax amount reflected in retail prices, which proponents suggest as the most likely scenario.[30] Bruce Bartlett states that it is unlikely that nominal wages would be reduced, which he believes would result in a recession, but that the Federal Reserve would likely increase the money supply to accommodate price increases.[38] David Tuerck states "The monetary authorities would have to consider how the degree of accommodation, varying from none to full, would affect the overall economy and how it would affect the well-being of various groups such as retirees."[78]

Social Security benefits would be adjusted for any price changes due to FairTax implementation.[17] The Beacon Hill Institute states that it would not matter, apart from transition issues, whether prices fall or rise—the relative tax burden and tax rate remains the same.[45] Decreases in production cost would not fully apply to imported products; so according to proponents, it would provide tax advantages for domestic production and increase U.S. competitiveness in global trade (see Border adjustability). To ease the transition, U.S. retailers will receive a tax credit equal to the FairTax on their inventory to allow for quick cost reduction. Retailers would also receive an administrative fee equal to the greater of $200 or 0.25% of the remitted tax as compensation for compliance costs,[79] which amounts to around $5 billion.

Effects on tax code compliance

One avenue for non-compliance is the black market. FairTax supporters state that the

drug dealers would be guilty of failing to submit sales tax), but they would face taxation when they used drug proceeds to buy consumer goods such as food, clothing, and cars. By taxing this previously untaxed money, FairTax supporters argue that non-filers would be paying part of their share of what would otherwise be uncollected income and payroll taxes.[12][83]

Other economists and analysts have argued that the underground economy would continue to bear the same tax burden as before.[14][82][83][84] They state that replacing the current tax system with a consumption tax would not change the tax revenue generated from the underground economy—while illicit income is not taxed directly, spending of income from illicit activity results in business income and wages that are taxed.[14][82][83]

Tax compliance and evasion

"No, No! Not That Way"—political cartoon from 1933 commenting on a general sales tax over an income tax

Proponents state the FairTax would reduce the number of tax filers by about 86% (from 100 million to 14 million) and reduce the filing complexity to a simplified state sales tax form.[53] The Government Accountability Office (GAO), among others, have specifically identified the negative relationship between compliance costs and the number of focal points for collection.[85] Under the FairTax, the federal government would be able to concentrate tax enforcement efforts on a single tax. Retailers would receive an administrative fee equal to the greater of $200 or 0.25% of the remitted tax as compensation for compliance costs.[79] In addition, supporters state that the overwhelming majority of purchases occur in major retail outlets, which are very unlikely to evade the FairTax and risk losing their business licenses.[45] Economic Census figures for 2002 show that 48.5% of merchandise sales are made by just 688 businesses ("Big-Box" retailers). 85.7% of all retail sales are made by 92,334 businesses, which is 3.6% of American companies. In the service sector, approximately 80% of sales are made by 1.2% of U.S. businesses.[30]

The FairTax is a national tax, but can be administered by the states rather than a federal agency,

information sharing, and clear interstate revenue allocation rules.[85][86] A study by the Beacon Hill Institute concluded that, on average, states could more than halve their sales tax rates and that state economies would benefit greatly from adopting a state-level FairTax.[85]

FairTax opponents state that compliance decreases when taxes are not

Organisation for Economic Co-operation and Development (OECD), IMF, and Brookings Institution have suggested that the upper limit for a sales tax is about 10% before incentives for evasion become too great to control.[38] According to the GAO, 80% of state tax officials opposed a national sales tax as an intrusion on their tax base.[38] Opponents also raise concerns of legal tax avoidance by spending and consuming outside of the U.S. (imported goods would be subject to collection by the U.S. Customs and Border Protection).[88]

Economists from the

President's Advisory Panel for Federal Tax Reform reported that if the federal government were to cease taxing income, states might choose to shift their revenue-raising to income.[9] Absent the Internal Revenue Service, it would be more difficult for the states to maintain viable income tax systems.[9][89]

Underground economy

Opponents of the FairTax argue that imposing a national retail sales tax would drive transactions underground and create a vast

underground economy.[5] Under a retail sales tax system, the purchase of intermediate goods and services that are factors of production are not taxed, since those goods would produce a final retail good that would be taxed. Individuals and businesses may be able to manipulate the tax system by claiming that purchases are for intermediate goods, when in fact they are final purchases that should be taxed. Proponents point out that a business is required to have a registered seller's certificate on file, and must keep complete records of all transactions for six years. Businesses must also record all taxable goods bought for seven years. They are required to report these sales every month (see Personal vs. business purchases).[41] The government could also stipulate that all retail sellers provide buyers with a written receipt, regardless of transaction type (cash, credit, etc.), which would create a paper trail for evasion with risk of having the buyer turn them in (the FairTax authorizes a reward for reporting tax cheats).[53]

While many economists and tax experts support a consumption tax, problems could arise with using a retail sales tax rather than a

1099-type forms, their sales to other firms, which would provide the same records that arise under a VAT.[53]
In the United States, a general sales tax is imposed in 45 states plus the District of Columbia (accounting for over 97% of both population and economic output), which proponents argue provides a large infrastructure for taxing sales that many countries do not have.

Personal versus business purchases

Businesses would be required to submit monthly or quarterly reports (depending on sales volume) of taxable sales and sales tax collected on their monthly sales tax return. During

non-profit or religious organization "for business purposes" would not be taxable.[92]

FairTax movement

A FairTax rally in Orlando, Florida on July 28, 2006

The creation of the FairTax began with a group of businessmen from Houston, Texas, who initially financed what has become the political advocacy group Americans For Fair Taxation (AFFT), which has grown into a large tax reform movement.[4][30] This organization, founded in 1994, claims to have spent over $20 million in research, marketing, lobbying, and organizing efforts over a ten-year period and is seeking to raise over $100 million more to promote the plan.[93] AFFT includes a staff in Houston and a large group of volunteers who are working to get the FairTax enacted.

In 2007 Bruce Bartlett said the FairTax was devised by the Church of Scientology in the early 1990s,[43] drawing comparisons between the tax policy and religious doctrine from the faith, whose creation myth holds that an evil alien ruler known as Xenu "used phony tax inspections as a guise for destroying his enemies."[94] Representative John Linder told the Atlanta Journal-Constitution that Bartlett confused the FairTax movement with the Scientology-affiliated Citizens for an Alternative Tax System,[95] which also seeks to abolish the federal income tax and replace it with a national retail sales tax. Leo Linbeck, AFFT Chairman and CEO, stated "As a founder of Americans For Fair Taxation, I can state categorically, however, that Scientology played no role in the founding, research or crafting of the legislation giving expression to the FairTax."[93]

Much support has been achieved by talk radio personality

electronic mailing lists have contributed to promoting, organizing, and gaining support for the FairTax. In the 2012 Republican presidential primary, and his ensuing Libertarian Party presidential run, former Governor of New Mexico and businessman Gary Johnson actively campaigned for the FairTax.[98] Former CEO of Godfather's Pizza Herman Cain had promoted the FairTax as a final step in a multiple-phase tax reform.[99] Outside of the United States, the Christian Heritage Party of Canada adopted a FairTax proposal as part of their 2011 election platform[100]
but has never been close to winning a seat in any election.

See also

Notes

  1. ^ https://fairtax.org/faq FAQ:Is there any provision in the FAIRtax bill to prevent both an income tax and a sales tax?
  2. ^ a b c d e Fair Tax Act, 2009, Chapter 3
  3. ^ a b c d e f g h Kotlikoff, 2005
  4. ^ a b Linbeck statement, 2005
  5. ^ a b c d e f g h i j k l m n o p q Regnier, 2005
  6. ^ a b Fair Tax Act, 2009, Chapter 1
  7. ^ a b c d e Gale, 1998
  8. ^ a b c Tuerk et al., 2007
  9. ^ a b c d e f g h i j k Tax Reform Panel Report, Ch. 9
  10. ^ a b c d e f Kotlikoff and Rapson, 2006
  11. ^ a b c Kotlikoff and Jokisch, 2007
  12. ^ a b c d e f g h i j The FairTax Book
  13. ^ a b c Open Letter to the President
  14. ^ a b c d Auerbach, 2005
  15. ^ a b Sipos, 2007
  16. ^ a b Gale, 2005
  17. ^ a b c d Fair Tax Act, 2009, Title III
  18. ^ "The FairTax | Congressman Rob Woodall". Archived from the original on 2015-02-05. Retrieved 2015-02-04.
  19. ^ a b H.R.25 108th Cosponsors
  20. ^ a b S.1493 108th Cosponsors
  21. ^ a b H.R.25 109th Cosponsors
  22. ^ a b S.25 109th Cosponsors
  23. ^ a b c H.R.25 110th Cosponsors
  24. ^ S.1025 110th Cosponsors
  25. ^ H.R.25 111th Cosponsors
  26. ^ S.296 111th Cosponsors
  27. ^ H.R.25 112th Cosponsors
  28. ^ S.13 112th Cosponsors
  29. ^ Bender, 2005
  30. ^ a b c d e f g Boortz and Linder, 2008
  31. ^ a b Davis, 2007
  32. ^ CBS News, 2007
  33. ^ Rasmussen Reports, 2009
  34. ^ Obama, 2008
  35. ^ 2015 prebate
  36. ^ a b c d e Rebuttal to Tax Panel Report, 2006
  37. ^ Bartlett, 2007
  38. ^ a b c d e f g h i j k Bartlett, 2007, Tax Notes
  39. ^ a b c d Yin, 2006, Fla. L. Rev.
  40. ^ Linder and Boortz, 2007
  41. ^ a b c d e Fair Tax Act, 2009, Chapter 5
  42. ^ a b Miller, 2007
  43. ^ a b c d Bartlett, 2007, Wall Street Journal
  44. ^ Gingrich and Ferrara, 2005
  45. ^ a b c d e f g h i j k Bachman et al., 2006
  46. ^ a b Burton and Mastromarco, 1998
  47. ^ Burton and Mastromarco, 1998a
  48. ^ a b c d Arduin, Laffer & Moore Econometrics, 2006
  49. ^ Altig et al., 2001
  50. ^ a b c Tuerk et al., 2007
  51. ^ Esenwein, 2005
  52. ^ a b c Diamond and Zodrow, 2008
  53. ^ a b c d e f Kotlikoff, 2008
  54. ^ a b Fair Tax Act, 2009
  55. ^ a b c Taranto, 2007
  56. ^ Kotlikoff and Rapson, 2006
  57. ^ Tuerk et al., 2007
  58. ^ Zodrow and McClure, 2006
  59. ^ Giuliani, 2007
  60. ^ a b Vance, 2005
  61. ^ a b Golob, 1995
  62. ^ Tuerk et al., 2007
  63. ^ Gaver, 2006
  64. ^ Linbeck, 2006a
  65. ^ Linbeck, 2007
  66. ^ Vargas, 2005
  67. ^ a b c Buckley, 2008
  68. ^ IRS Labor Force, 2005
  69. ^ a b c d Taranto, 2007a
  70. ^ Fair Tax Act, 2009, Chapter 8
  71. ^ Tuerck et al., 2007
  72. ^ Types of Bonds
  73. ^ Fair Tax Act, 2009, Title IV
  74. ^ a b Landsburg, 1998
  75. ^ Forbes, 2007
  76. ^ Jorgenson, 1998
  77. ^ Boortz, 2005
  78. ^ a b c Tuerck, 2008
  79. ^ a b Fair Tax Act, 2009, Chapter 2
  80. ^ McTague, 2005
  81. ^ Schlosser, 2004
  82. ^ a b c Taranto, 2007
  83. ^ a b c d American Enterprise Institute, 2007
  84. ^ Moffatt, 2006
  85. ^ a b c Tuerck at el, 2007
  86. ^ a b Fair Tax Act, 2009, Chapter 4
  87. ^ California Legislative Analyst's Office
  88. ^ Karvounis, 2007
  89. ^ a b Fox and Murray, 2005
  90. ^ Slemrod, 2005
  91. ^ a b Worstall, 2015
  92. ^ Fair Tax Act, 2009, Chapter 7
  93. ^ a b Linbeck, 2007
  94. ^ Bartlett, Bruce (7 September 2007). "Scientology's Fair Tax Plot". CBS News. Archived from the original on 13 December 2014. Retrieved 17 June 2015.
  95. ^ Galloway, 2007
  96. ^ a b Boortz, 2005
  97. ^ Boortz, 2006
  98. ^ Gary Johnson 2012 Campaign Site, 2011
  99. ^ RedState, 2011
  100. ^ Christian Heritage, 2011

References

Further reading

External links

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