NTU's FairTax Information HubWhy NTU Supports the FairTax:
The Fair Tax Act would promote freedom,
fairness, and economic opportunity by repealing the income tax and other
taxes, abolishing the Internal Revenue Service, and enacting a national sales
tax to be administered primarily by the States.
Legislative Status:
The FairTax has been reintroduced for the 111th Congress. It is H.R. 25
in the House and S. 296 in the Senate. NTU has endorsed the FairTax since
1998 and continues to work for its adoption.
Benefits of the FairTax:
The
FairTax plan brings fairness, transparency, and efficiency to our unfair,
complex, and confusing Tax Code.
The
FairTax rewards job creation, hard work, and individual responsibility.
By doing away with payroll taxes, companies can afford to hire more employees
and outsourcing looks less attractive. By taxing consumption instead of
income, individuals are provided with a strong incentive to work hard because
they keep more of what they earn. By taxing spending, the FairTax allows
us to control how much tax we pay depending on our individual lifestyle
choices.
The
FairTax ensures that all Americans pay their fair share of taxes. The IRS
currently admits to a 25 percent non-compliance rate with the Tax Code,
often done unintentionally. By placing the tax at the point of sale, no
individual or special interest group could evade taxes with the help of
an expensive tax attorney or well-heeled lobbyist. Furthermore, we could
stop making criminals out of ordinary Americans who prepare their tax returns
incorrectly by mistake.
How the Plan Works:
The FairTax proposal
is a comprehensive revenue plan that would eliminate most major federal
income and payroll taxes, including personal, gift, estate, capital gains,
alternative minimum, Social Security, Medicare, self-employment, and corporate
taxes. On payday, every American would receive 100 percent of his or her
paycheck, minus any state income taxes.
These federal taxes
would be replaced by a national retail sales tax. Under the
FairTax, the national sales tax rate initially would be 23 percent,
with adjustments made to the rate in subsequent years.
The FairTax is progressive.
To make this system fair for low-income Americans, all taxpayers would
receive a monthly "prebate," so no one would pay taxes for consumption
up to the poverty line.
The national retail
tax would only be collected on new purchases, making "used" purchases tax-free.
Additionally, business purchases would be exempt from the tax, thereby
eradicating corporate tax compliance costs currently hidden in retail prices.
What You Can Do:
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