NationMaster - Encyclopedia: The FairTax Book

The FairTax (H.R.25/S.25) is a proposal for changing United States tax laws to replace the Internal Revenue Service (IRS) and all federal income taxes (including AMT), payroll taxes (including Social Security and Medicare taxes), corporate taxes, capital gains taxes, gift taxes and inheritance taxes with a national retail sales tax, to be levied once at the point of purchase on all new goods and services. Apart from funding, the legislation would not change government programs such as Social Security, Medicare, and Medicaid.^[1] The proposal also calls for a monthly tax rebate to households of citizens and legal resident aliens, to "untax" purchases up to the poverty level.^[2] The sales tax rate would be 23% of the total register price (calculated the same way as income taxes), which is the same as a 30% traditional sales tax.^[3] Due to the rebate, the effective tax rate is progressive on consumption and could result in a tax burden of zero or less.^[2] Opponents assert that the tax would be regressive on income, and (based on modified sales tax studies) would shift the tax burden from those with a higher income to those with a lower income and primarily benefit wealthy individuals,^[3]^[4] while the plan's supporters argue that it would broaden the tax base, increase purchasing power,^[5] decrease tax burdens,^[6] and tax wealth.^[2] Image File history File links FairTaxBook. ... Image File history File links FairTaxBook. ... Neal Boortz (born April 6, 1945), is a U.S. talk radio host based in Atlanta, Georgia and nationally syndicated by Cox Radio and the Jones Radio Networks. ... John Elmer Linder (born December 9, 1942), American politician, has been a Republican member of the United States House of Representatives since 1993, representing the 7th District of Georgia (map). ... August 2 is the 214th day of the year in the Gregorian Calendar (215th in leap years), with 151 days remaining. ... 2005 (MMV) was a common year starting on Saturday of the Gregorian calendar. ... The Internal Revenue Service (IRS) is the United States government agency that collects taxes and enforces the internal revenue laws. ... Obverse of the Great Seal of the United States. ... The United States imposes an income tax on the taxable income of individuals, corporations, trusts, decedents estates and certain bankruptcy estates. ... The Alternative Minimum Tax (AMT) system is part of the federal income tax system in the United States. ... In the United States, payroll tax is tax that pays for two social insurance systems: Medicare and Social Security. ... Federal Insurance Contributions Act (FICA) tax, a kind of payroll tax, is a United States employment tax imposed in an equal amount on employees and employers to fund federal programs for retirees, the disabled, and children of deceased workers. ... Corporate tax refers to a direct tax levied by various jurisdictions on the profits made by companies or associations. ... A capital gains tax (abbreviated: CGT) is a tax charged on capital gains, the profit realized on the sale of an asset that was purchased at a lower price. ... Inheritance tax, also known in some countries outside the United States as a death duty and referred to as an estate tax within the U.S, is a form of tax levied upon the bequest that a person may make in their will to a living person or organisation. ... Estate tax is a form of tax imposed in the United States upon the transfer of the property of the estate of a deceased person that is left to a living person or organization. ... A sales tax is a state or locality imposed percentage tax on the selling or renting of certain property or services. ... A good in economics is any physical object (natural or man-made) or service that, upon consumption, increases utility, and therefore can be sold at a price in a market. ... In economics and marketing, a service is the non-material equivalent of a good. ... Social Security, in the United States, refers to the Federal Old-Age, Survivors, and Disability Insurance (OASDI) program. ... President Johnson signing the Medicare amendment. ... Medicaid is the US health insurance program for individuals and families with low incomes and resources. ... The household is the basic unit of analysis in many microeconomic and government models. ... The effective tax rate is the amount of income tax an individual or firm pays divided by the individual or firms total taxable income. ... A progressive tax is a tax imposed so that the tax rate increases as the amount to which the rate is applied increases. ... A regressive tax is a tax imposed so that the tax rate decreases as the amount to which the rate is applied increases. ...

Because the income tax structure of the United States embeds multiple taxes in the costs of goods and services, the FairTax is expected to decrease production costs after business taxes and compliance costs are removed. This is predicted to offset a portion of the FairTax amount.^[7] Proponents expect the FairTax to have positive ramifications for savings and investment (not taxed), transparency (taxes are visible on each receipt), ease of compliance (no tax planning), economic growth, international business locality (businesses will be more inclined to produce in the U.S.), and U.S. international competitiveness (decreased U.S. production costs).^[7] However, critics argue that it could be difficult to collect, having challenges with an underground economy (avoiding the tax),^[4]^[3] and that it may not yield enough money for the government, resulting in cuts to governmental programs, increased deficit, or a higher tax rate.^[3] Additionally, it may be difficult to permanently eliminate income taxation, as it would require a constitutional amendment to aggressively repeal the Sixteenth Amendment to the United States Constitution. Taxes and subsidies have the effect of shifting the quantity and price of goods. ... This box: The underground economy or shadow economy consists of all commerce that is not taxed. ... A budget deficit occurs when an entity (often a government) spends more money than it takes in. ... A constitutional amendment is an alteration to the constitution of a nation or a state. ... The Sixteenth Amendment may refer to the: Sixteenth Amendment to the United States Constitution - authorizes income tax without apportionment Sixteenth Amendment of the Constitution of Ireland - provided that a court could refuse bail to a suspect where it feared that while at liberty they would commit a criminal offence. ...

Legislative history

The FairTax plan was created by Americans For Fair Taxation, an advocacy group formed for this purpose. The group developed the plan and the name Fair Tax with economists based on interviews, polls and focus groups of the general public.^[8]^[3] Americans For Fair Taxation (AFFT) is the nations largest, single-issue grassroots organization dedicated to fundamental tax code replacement. ... An advocacy group, interest group or lobbying group is a group, however loosely or tightly organized, doing advocacy: those determined to encourage or prevent changes in public policy without trying to be elected. ... interview An interview is a conversation between two or more people where questions are asked to obtain information about the interviewee. ... Opinion polls are surveys of opinion using sampling. ... A focus group is a form of qualitative research in which a group of people are asked about their attitude towards a product, service, concept, advertisement, idea, or packaging. ...

Georgia Republican John Linder first introduced the FairTax Bill in July 1999 to the 106th United States Congress. He has reintroduced substantially the same bill in each subsequent session of Congress. While the bill attracted a total of 56 House and Senate cosponsors in 2004 and 61 in 2006, it has not been voted on by any committee in either the House or Senate.^[9]^[10]^[11]^[12] In order to become law, the bill will need to be included in a final version of tax legislation from either the U.S. House Committee on Ways and Means or U.S. Senate Finance Committee, then obtain support from the Joint Committee on Taxation, and finally pass both the House and the Senate. GOP redirects here. ... John Elmer Linder (born December 9, 1942), American politician, has been a Republican member of the United States House of Representatives since 1993, representing the 7th District of Georgia (map). ... // Leadership Senate House of Representatives States Members of the 106th United States Congress: Alabama Senators Richard C. Shelby (R) Jefferson B. Sessions III (R) Representatives 1. ... The Committee on Ways and Means is a committee of the United States House of Representatives. ... The U.S. Senate Committee on Finance (or, less formally, Senate Finance Committee) is a standing committee of the United States Senate. ... The Joint Committee on Taxation is a Committee of the U.S. Congress established under the Internal Revenue Code. ...

The current FairTax legislation was introduced by Linder in the House and by Georgia Republican Senator Saxby Chambliss in the Senate. Its formal name is the Fair Tax Act of 2005. The bill is supported by Speaker of the House Dennis Hastert but has not received support from the Democratic leadership.^[11]^[12]^[13] Democratic Representative Collin Peterson of Minnesota and Democratic Senator Zell Miller of Georgia cosponsored and introduced the bill in the 108th Congress, but Peterson is no longer cosponsoring the bill and Miller has left the Senate.^[9]^[10] In the 109th Congress, Democratic Representative Dan Boren has cosponsored the bill.^[11] Clarence Saxby Chambliss (born November 10, 1943) is the senior United States Senator from Georgia. ... The term Speaker is usually the title given to the presiding officer of a countrys lower house of parliament or congress (ie: the House of Commons or House of Representatives). ... John Dennis Hastert (born January 2, 1942) is an American politician, and outgoing Speaker of the United States House of Representatives. ... The Democratic Party is one of two major political parties in the United States, the other being the Republican Party. ... Collin Clark Peterson (born June 29, 1944), is an American politician. ... Capital Saint Paul Largest city Minneapolis Area Ranked 12th - Total 87,014 sq mi (225,365 kmÂ²) - Width 250 miles (400 km) - Length 400 miles (645 km) - % water 8. ... Zell Bryan Miller (born February 24, 1932) is an American politician from the U.S. state of Georgia. ... David Daniel Dan Boren (born August 2, 1973) is a Democratic U.S. politician from the state of Oklahoma, representing Oklahomas 2nd congressional district in the U.S. House of Representatives (map). ...

Other current attempts to replace the U.S. tax system have attracted fewer cosponsors. The Flat tax sponsored by Texas Republican Michael C. Burgess in the House has 6 cosponsors, and no other proposal has as many.^[14] A flat tax, also called a proportional tax, is a system that taxes all entities in a class (typically either citizens or corporations) at the same rate (as a proportion on income), as opposed to a graduated, or progressive, scheme. ... Texas is the gayest motherfucking state out there they can suck my big black balls. ... (Another Michael Burgess is a coroner investigating the death of Diana, Princess of Wales) Michael C. Burgess (born December 23, 1950) is a physician and politician from the state of Texas, currently representing the states 26th Congressional district (map) in the United States House of Representatives. ...

Tax rate

Sales tax rate

The FairTax legislation would apply a 23% federal retail sales tax on the total transaction value of new retail goods and services purchases; in other words, consumers pay to the government 23 cents of every dollar spent (sometimes called tax-inclusive — as income taxes are calculated). The assessed tax rate is 30% if the FairTax is added to the pre-tax price of a good like traditional U.S. sales taxes (sometimes called tax-exclusive).^[3] The FairTax legislation uses total transaction value (tax-inclusive) in presenting the rate; with an item purchased for $100, the retailer receives $77 and the remaining is collected for the federal government. However, American sales taxes have historically been expressed as a percentage of the original sale price (tax-exclusive); items priced at $100 pre-tax cost $130 with the tax added.^[15] The use of the tax-inclusive number in presenting the rate has been criticized as deceptive by the plan's opponents. Proponents argue that the 23% number represents a better comparison to income tax rates, which are presented as inclusive rates (see Presentation of tax rate).^[7] Critics also argue that the sales tax rate would need to be higher in order to be revenue neutral (see Revenue neutrality).^[16] A good in economics is any physical object (natural or man-made) or service that, upon consumption, increases utility, and therefore can be sold at a price in a market. ... In economics and marketing, a service is the non-material equivalent of a good. ... The FairTax Book, co-authored by Neal Boortz and John Linder, was published on August 2, 2005, as a tool to increase public support for the FairTax Plan. ... The FairTax Book, co-authored by Neal Boortz and John Linder, was published on August 2, 2005, as a tool to increase public support for the FairTax Plan. ...

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 already been paid on the good. The FairTax would tax all services provided at the retail level.^[8] Personal services such as health care, legal services, haircuts and auto repairs would be subject to the FairTax, as would renting apartments and other real property.^[3] State sales taxes do not generally tax such services. Education, training, saving and financial investing would be considered an investment (rather than final consumption) and therefore would not be taxed.^[1] Health care or healthcare is the prevention, treatment, and management of illness and the preservation of mental and physical well-being through the services offered by the medical, nursing, and allied health professions. ... English barrister 16th century painting of a civil law notary, by Flemish painter Quentin Massys. ... A boy visiting a barber A barber (from the Latin barba, beard) is someone whose occupation is to cut any type of hair, give shaves, and trim beards. ... A mechanic works on the rear end of a car An auto mechanic is a mechanic who specializes in automobile maintenance, repair, and sometimes modification and design. ... It has been suggested that this article or section be merged with rental agreement. ... Real property is a legal term encompassing real estate and ownership interests in real estate (immovable property). ... In common usage, saving generally means putting money aside, for example, by putting money in the bank or investing in a pension plan. ... Invest redirects here. ...

Effective tax rate

The effective tax rate for any household would be variable due to the fixed monthly tax rebates. The rebates would have the greatest impact at low spending levels, where they could lower a household's effective rate to zero or a negative rate. At higher spending levels, the rebate has less impact, and a household's effective tax rate would approach 23% of total spending.^[17]^[18] For example, a household of three spending $30,000 a year on taxable items would devote about 6% of total spending to the FairTax after the rebate. A household spending $125,000 on taxable items would spend around 19% on the FairTax.^[3] The total amount of spending and the proportion of spending allocated to taxable items would determine a household's effective tax rate.^[19] Image File history File links Effectiverate. ... Image File history File links Effectiverate. ... The effective tax rate is the amount of income tax an individual or firm pays divided by the individual or firms total taxable income. ...

The lowest effective tax rate under the FairTax could be negative due to the rebate. This could occur when a household spends less and pays less in taxes than the average poverty level spending for a similar household size. Buying or otherwise receiving used items can also contribute towards a negative rate. Here, the household's rebate would exceed actual taxes paid by that household. To determine the effective tax rate for consuming all income on new goods and services: ((income * tax rate) – rebate) / income = effective tax rate.

Monthly tax rebate

Under the FairTax, households would receive a monthly tax rebate (known as a "prebate" as it would be paid in advance) equal to the estimated total FairTax paid on poverty level spending according to the poverty guidelines published by the U.S. Department of Health and Human Services.^[1] The poverty level guidelines vary by family size and represent the cost to purchase household necessities. The rebate would be paid in twelve monthly installments equal to 23% of poverty level spending for each household size and is meant to eliminate the taxation of necessities and make the plan progressive.^[3] The formula used to calculate rebate amounts would be adjusted for inflation. To become eligible for the rebate, households would register once a year with their sales tax administering authority, providing the names and social security numbers of each household member. 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 much like a bank debit card.^[1] The National Taxpayers Union estimated that the annual cost of mailing monthly rebate checks via the U.S. Post Office would be approximately $225 million. Image File history File links Prebatechart. ... Image File history File links Prebatechart. ... Percent below each countrys official poverty line, according to the CIA factbook. ... The United States Department of Health and Human Services, often abbreviated HHS, is a Cabinet department of the United States government with the goal of protecting the health of all Americans and providing essential human services. ... A progressive tax is a tax imposed so that the tax rate increases as the amount to which the rate is applied increases. ... Electronic funds transfer or EFT refers to the computer-based systems used to perform financial transactions electronically. ... A smart card, or integrated circuit(s) card (ICC), is defined as any integrated circuitry embedded into a flat, plastic body. ... National Taxpayers Union (NTU) is an pro-taxpayers advocacy organization in the United States, founded in 1969 by James Dale Davidson. ...

The President's Advisory Panel on Federal Tax Reform cited the rebate as one of their chief concerns with the FairTax, calling it "the largest (entitlement program) in American history," and contending that it would "make most American families dependent on monthly checks from the federal government for a substantial portion of their incomes."^[16] However, if "substantial" was defined as a rebate that increased family income by 23% or more, according to the U.S. Census Bureau income statistics for 2005, "most American families" (claimed by the Tax Panel) would only equate to 12.6%.^[20] Based on the advisory panel's tax rate and base (which differs from the FairTax legislation by creating exemptions not defined in the proposal),^[21] "the Prebate program would cost more than all budgeted spending in 2006 on the Departments of Agriculture, Commerce, Defense, Education, Energy, Homeland Security, Housing and Urban Development, and Interior combined."^[16] The Beacon Hill Institute estimated the rebate cost to be $489 billion (assuming 100 percent participation). Proponents point out that income tax deductions, tax preferences, loopholes, credits, etc. under the current system was estimated at $945 billion by the Joint Committee on Taxation and that the IRS itself sent out $270 billion in refund checks for 2005.^[21] This is $456 billion more than the FairTax "entitlement" would spend to enable taxpayers to buy the necessities of life free from government tax.

Revenue neutrality

A key component of the FairTax rate is the ability to be revenue-neutral — that is, it would not result in an increase or reduction in overall federal tax revenues.^[8] However, this is a matter of dispute, as economists, advisory groups and political advocacy groups disagree about the tax rate required for the FairTax to be truly revenue-neutral. Different researchers use different time frames and methodologies that make direct comparison among estimates difficult. The choice between static or dynamic scoring further complicates any estimate of revenue-neutral rates.^[22] The rates presented below are based on a static scoring analysis and adhere to the legislative framework of the FairTax bill in rate presentation, which is calculated as a percentage of total spending, sometimes called a tax-inclusive rate. To adjust any rate below to that of a traditional sales tax, divide the rate by 1 minus the rate (refer to Presentation of tax rate for calculations). Static code analysis is a set of methods for analysing software source code or object code in an effort to gain understanding of what the software does and establish certain correctness criteria. ... Dynamic scoring predicts the impact of fiscal policy changes by forcasting the effects of economic agents reactions to policy. ... The FairTax Book, co-authored by Neal Boortz and John Linder, was published on August 2, 2005, as a tool to increase public support for the FairTax Plan. ...

Americans For Fair Taxation (AFFT) claim that Dale Jorgenson, a professor of economics at Harvard University and past President of the American Economics Association, helped develop the FairTax and estimated the revenue-neutral rate to be 22.9%.^[8] However, Dr. Jorgenson, in his 2002 book, indicated that he believes the revenue-neutral rate would need to be much higher (it is unknown what assumptions, changes, or tax base he was considering when he made this statement).^[23] Jim Poterba of the Massachusetts Institute of Technology estimated a rate of 23.1% using assumptions provided to him by AFFT. Laurence Kotlikoff of Boston University purportedly found a rate of around 24%. AFFT states that researchers at Stanford University, The Heritage Foundation, The Cato Institute, and Fiscal Associates have calculated revenue-neutral rates between 22.3% and 24%.^[8] However, AFFT funded this research and has not made these studies public. The studies are also not published by the economists that conducted those studies. Economist William Gale of the Brookings Institution published a detailed analysis that estimated a ten-year revenue-neutral rate of around 31% (on a tax-inclusive basis) assuming full taxpayer compliance.^[3]^[24] The Argus Group and Arduin, Laffer & Moore Econometrics both published analyses that defended the 23% rate.^[25]^[26]^[27] A detailed study published in 2006 by Beacon Hill Institute found the FairTax rate to be 23.82%.^[28] Americans For Fair Taxation (AFFT) is the nations largest, single-issue grassroots organization dedicated to fundamental tax code replacement. ... Harvard University (incorporated as The President and Fellows of Harvard College) is a private university in Cambridge, Massachusetts. ... The Massachusetts Institute of Technology, or MIT, is a private coeducational research university located in Cambridge, Massachusetts, USA. MIT has five schools and one college, containing 32 academic departments,[2] with a strong emphasis on theoretical, applied, and interdisciplinary scientific and technological research. ... Laurence J. Kotlikoff (January 30, 1951-) is a american professor of economics at Boston University who believes that the USA is going toward an economic catastrophe in the near future. ... For the unrelated Jesuit university in Chestnut Hill, see Boston College. ... Stanford redirects here. ... The Heritage Foundation is an influential public policy research institute based in Washington, D.C., in the United States. ... The Cato Institute is a libertarian think tank headquartered in Washington, D.C. The Institutes stated mission is to broaden the parameters of public policy debate to allow consideration of the traditional American principles of limited government, individual liberty, free markets, and peace by seeking greater involvement of the... The Brookings Institution is one of the oldest and best known think tanks in the United States. ...

Additional studies have been performed on National Retail Sales Tax plans that do not necessarily conform to the tax base as defined in the FairTax legislation but are often considered when discussing FairTax rates. These studies often claim the tax base or rate calculation methods used in the FairTax legislation is flawed or likely to be modified by Congress before passage.^[3]^[16] The President's Advisory Panel for Federal Tax Reform found the rate would need to be 25% in order to replace the income tax alone (i.e., it would need by be substantially higher to replace payroll taxes and the estate tax).^[16] However, the Chairman of the President's Advisory Panel, former U.S. Senator Connie Mack, stated that "the panel did not score H.R. 25” (the FairTax).^[29] The panel was not allowed to consider reforming regressive payroll taxes and they reduced the tax base by adding large exclusions.^[21]^[30] The panel explained that the tax base change and the higher rate was required due to several flaws it found in the FairTax proposal - including the counting of taxes government would pay to itself as revenues without similarly increasing the amount of government expenditures to pay these taxes, and an assumption of zero tax-evasion - which it considered unrealistic.^[16] FairTax proponents, including the Beacon Hill Institute, disagree with those conclusions.^[28] On January 7, 2005, President George W. Bush announced the establishment of the Presidents Advisory Panel for Tax Reform, a bipartisan panel to advise on options to reform the United States income tax code to make it simpler, fairer, and more pro-growth to benefit all Americans. ... Connie Mack III Cornelius Alexander McGillicuddy III (born October 29, 1940 in Philadelphia, Pennsylvania), known as Connie Mack for short, is a former Republican member of the United States House of Representatives from 1983 to 1989 and of the United States Senate from 1989 to 2001, all from Florida. ...

The tax panel reported "For example, if a retail sales tax imposed a 30 percent tax on a good required for national defense, either the government would be required to pay that tax, thereby increasing the cost of maintaining current levels of national defense under the retail sales tax, or, if the government was exempt from retail sales tax, the estimate for the amount of revenue raised by the retail sales tax could not include tax on the government’s purchases. Failure to properly account for this effect is the most significant factor contributing to the FairTax proponents’ relatively low revenue-neutral tax rate. Second, FairTax proponents’ rate estimates also appear to assume that there would be absolutely no tax evasion in a retail sales tax. The Panel found the assumption that all taxpayers would be fully compliant with a full replacement retail sales tax to be unreasonable. The Panel instead made assumptions about evasion that it believes to be conservative and analyzed the tax rate using these evasion assumptions."^[16]

The Treasury Department estimates excluded government consumption from the base, which is about 18% of consumption. This significantly alters the tax base and therefore the tax rate.^[16] Other studies point out that the current system is also counting taxes the government would pay to itself by including matched payroll taxes of government employees, in addition to covering the corporate and payroll tax expenses of its contractors and their suppliers.^[21]^[26]^[28] The tax panel included large expenditures to local and state governments for the FairTax burden, however, the Beacon Hill Institute suggested a flaw in this logic and showed that the FairTax imposes no additional real fiscal burdens on state and local government.^[28] A similar level of taxation is required when shifting from taxing income to consumption in order to maintain the tax burden on government. Proponents assert that government needs to be taxed to keep a level playing field between government enterprises and private enterprises.^[21]^[26]^[28]^[31] Dr. Karen Walby, Director of Research for the Americans For Fair Taxation, discussed a recent study by Young & Associates on evasion and enforcement that identifies certain key variables which influence the level of compliance (marginal tax rates, likelihood of audit, severity of penalties, etc) and concludes the FairTax is superior on most/all of these and would therefore have lower rates of evasion than alternatives.^[32] While the FairTax studies did not consider tax evasion, neither did they ignore it. The studies have implicitly incorporated a significant degree of tax evasion in calculations simply by using National Income and Product Account based figures that understate total household consumption.^[28] In addition, the studies did not consider the increased economic growth that economists and FairTax supporters believe would occur.^[33] National Income and Product Accounts (NIPA) use double entry accounting to report the monetary value and sources of output produced in a country and the distribution of incomes that production generates. ...

Congress’s bipartisan Joint Committee on Taxation evaluated a proposal similar to FairTax that included additional exemptions and estimated a revenue-neutral rate of around 36%.^[34]^[26] In a 2004 study, the Institute on Taxation and Economic Policy examined the FairTax proposal and contends that by excluding certain levels of taxation it calls "phantom" (sales to the government, church and nonprofit transactions, etc.), a national sales tax rate would have to be upwards of 36% to be revenue-neutral.^[35] Proponents charge that the Presidential Tax Panel, the JCT, and ITEP are motivated to maintain the "status quo" and thus modify the tax base from the proposed legislation to achieve higher rates.^[36] Proponents claim that it is circular logic for critics of the FairTax to modify the tax base to create a higher rate and to then justify greater evasion, making an even higher rate, which also makes the rebate much more expensive. Proponents further state that since opponents could not kill the FairTax proposal based on merits or lack thereof; they create their own plan with an exaggerated rate to make it politically not feasible.^[21]^[37] In a two-party system (such as in the United States), bipartisan refers to any bill, act, resolution, or any other action of a political body in which both of the major political parties are in agreement. ... The Joint Committee on Taxation is a Committee of the U.S. Congress established under the Internal Revenue Code. ...

Presentation of tax rate

The current tax system imposes taxes primarily on income. The tax base is a household's pre-tax income. The appropriate income tax rate is applied to the tax base to calculate taxes owed. Under this formula, taxes to be paid are included in the base on which the tax rate is imposed. If an individual's gross income is $100 and income tax rate is 23%, taxes owed equals $23. The tax base of $100 can be treated as two parts—$77 of after-tax spending money and $23 of income taxes owed. The income tax is taken "off the top", so the individual is left with $77 in after-tax money.^[8] Income, generally defined, is the money that is received as a result of the normal business activities of an individual or a business. ...

Traditional sales tax laws impose taxes on a tax base equal to the pre-tax portion of a good's price. Unlike income taxes, U.S. sales taxes do not include actual taxes owed as part of the base. A good priced at $77 with a 30% sales tax rate yields $23 in taxes owed. Since the sales tax is added "on the top", the individual pays $23 of tax on $77 of pre-tax goods.^[8]

Since sales and income taxes behave differently due to differing definitions of tax base, direct rate comparisons between the two can be confusing. For direct rate comparisons between sales and income taxes, one rate must be manipulated to look like the other. However, this can cause some confusion when not explained properly. A 30% sales tax rate approximates a 23% income tax rate after adjustment. From the example above, an individual pays $23 of tax on $77 of goods. Total spending (pre-tax price and taxes owed) for that transaction equals $100. The $23 of taxes on $100 of total spending yields a 23% rate. By including taxes owed in the tax base, a sales tax rate can be directly compared to an income tax rate.

The FairTax rate, unlike most U.S. state-level sales taxes, would be calculated on a tax base that includes the amount of FairTax paid. In this manner, the FairTax, like European sales taxes, more closely resembles an income tax calculation. A final price of $100 includes $23 of taxes. Like the income tax example above, the taxes to be paid would be included in the base on which the FairTax is imposed. The FairTax is presented as a 23% tax rate for easy comparison to income tax rates. If you are in a 25% income tax bracket, you will pay $25 in federal income taxes out every $100 you earn. With the 23% FairTax, you would pay $23 in taxes out of every $100 you spend.^[7] World map showing Europe A satellite composite image of Europe Europe is one of the seven traditional continents of the Earth. ...

The plan's opponents call this deceptive - Laurence Vance, writing for the Ludwig von Mises Institute, goes so far as to call it a "lie". According to Vance, "Boortz's 'mathematical equivalent of a game of semantics' still results in a FairTax rate of 30 percent. This is why Boortz prefers the national sales tax to be included in the price of each item—so the consumer doesn't realize that he is really paying an extra 30 percent in sales tax, not Boortz's new math amount of 23 percent."^[15] When looking at other rate studies that report a 36% rate, the equivalent traditional sales tax rate would be 56%. Ludwig von Mises Institute for Austrian Economics, Auburn, Alabama The Ludwig von Mises Institute (LvMI), based in Auburn, Alabama, is a libertarian academic organisation engaged in research and scholarship in the fields of economics, philosophy and political economy. ...

This means that to adjust any rate below to that of a traditional sales tax, one can divide the given rate by 1 minus that rate.

Distribution of tax burden

The FairTax's impact on the distribution of taxation is a point of significant dispute. The plan's supporters argue that it would broaden the tax base, be progressive and start taxing wealth, while opponents argue that a national sales tax would be inherently regressive and would decrease tax burdens paid by high-income individuals.^[3] Sales taxes are normally considered regressive, however, the FairTax provides a rebate that supporters argue would create a progressive effective rate on consumption. Under the FairTax, a low-income family may spend $25,000 on goods and services consuming 100% of their income. A higher income family making $100,000 may spend $80,000 on goods and services and save $20,000. The higher income family is consuming only 80% of their income on taxable goods and services. According to Economist William G. Gale, the percentage of income taxed is regressive.^[4] However, when presented with an estimated effective tax rate, the low-income family above would pay a tax rate of 0% on the 100% of consumption and the higher income family would pay a tax rate of 15% on the 80% of consumption. The effective tax rate is progressive on consumption. This article describes the distribution of the FairTax burden. ... Image File history File links Fairtax-dollars. ... Image File history File links Fairtax-dollars. ... A progressive tax is a tax imposed so that the tax rate increases as the amount to which the rate is applied increases. ... A regressive tax is a tax imposed so that the tax rate decreases as the amount to which the rate is applied increases. ...

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; households at the extreme high end of consumption often finance their purchases out of savings, not income.^[4] This savings would be taxed when it becomes a purchase. Income earned and saved would not be taxed immediately under the proposal. In other words, savings would be spent at some point in the future and taxed according to that consumption. FairTax advocates state that this would improve taxing of wealth. Economist Laurence Kotlikoff stated that the FairTax could make the tax system much more progressive and generationally equitable.^[2] "Their view that taxing sales is regressive is just plain wrong. Taxing consumption is effectively the same as taxing wages plus taxing wealth."^[2] The payroll tax system is regressive on income with no standard deduction or personal exemptions taxing only the first $94,200 from gross wages, and none earned from capital investments or interest. The Center on Budget and Policy Priorities states that three-fourths of taxpayers pay more in payroll taxes than they do in income taxes.^[38] Under the FairTax, it would be eliminated. Kotlikoff finds that the FairTax significantly reduces marginal taxes on work and saving, substantially lowers overall average remaining lifetime tax burdens on current and future workers at all income levels.^[6] In the United States, payroll tax is tax that pays for two social insurance systems: Medicare and Social Security. ...

The President's Advisory Panel for Federal Tax Reform and Economist William Gale analyzed a National Sales Tax similar to the FairTax (though also different in several aspects) and reported that the overall tax burden on middle-income Americans would increase while the tax burden on the very rich would drop.^[16]^[4] FairTax supporters argue that the tax burden would shift to those who do not pay taxes under the current system.^[2] The FairTax would dramatically broaden the tax base to include all 300 million Americans and an estimated 30 million to 40 million foreign tourists and visitors. This would more than double the federal government's tax base.^[39] A study on marginal and average tax rates found that the FairTax would reduce most households’ average lifetime tax rates and, often, by a lot.^[40] Economists at Boston University found that the FairTax rewards low-income households with 26.7 percent more purchasing power, middle-income households with 10.9 percent more purchasing power, and high-income households with 4.7 percent more purchasing power.^[5] On January 7, 2005, President George W. Bush announced the establishment of the Presidents Advisory Panel for Tax Reform, a bipartisan panel to advise on options to reform the United States income tax code to make it simpler, fairer, and more pro-growth to benefit all Americans. ...

Predicted effects

The FairTax proposal would have effects in many areas that influence the United States. FairTax proponents assert that the proposal would provide tax burden visibility and reduce compliance costs. The cost of federal government would be highly visible as consumers would see most of this cost in a single tax paid every time they purchase a good or service.^[2] Under the current tax system, the federal government collects revenue through a wide variety of taxes on individuals and businesses, which may not be fully visible to individual citizens.^[41] The efficiency cost of the current tax system — the output that is lost over and above the tax itself — is between $240 billion and $600 billion every year according to a 2005 report from the U.S. Government Accountability Office.^[42]^[43] Supporters argue that the FairTax system would reduce these compliance and efficiency costs by 90% and return a larger share of that money to the productive economy.^[2]^[44] The FairTax Book, co-authored by Neal Boortz and John Linder, was published on August 2, 2005, as a tool to increase public support for the FairTax Plan. ... Image File history File linksMetadata TaxCode. ... Image File history File linksMetadata TaxCode. ... John Elmer Linder (born December 9, 1942), American politician, has been a Republican member of the United States House of Representatives since 1993, representing the 7th District of Georgia (map). ... GAO headquarters The Government Accountability Office (GAO) is the non-partisan audit, evaluation, and investigative arm of Congress, and an agency in the Legislative Branch of the United States Government. ...

In an open letter to the President, the Congress, and the American people, seventy-five economists, including Nobel Laureate Vernon L. Smith, stated that the FairTax would boost the United States economy.^[33] According to the National Bureau of Economic Research and Americans For Fair Taxation, GDP would increase almost 10.5% in the year after the FairTax goes into effect.^[44] In addition, the incentive to work would increase by as much as 20%, the economy’s capital stock would increase by 42%, labor supply by 4%, output by 12%, and real wage rate by 8%.^[45] Further, studies of the FairTax at Boston University and Rice University suggest the FairTax will bring long-term interest rates down by as much as one third.^[45] As falling tax compliance costs lower production costs, exports would increase by 26% initially and remain more than 13% above present levels.^[44] According to Professor Dale Jorgenson of Harvard University’s Economics Department, revenues to Social Security and Medicare would double as the size of the economy doubles within 15 years after passage of the FairTax.^[19] Opponents offer a study commissioned by the National Retail Federation in 2000 that found a national sales tax would bring a 3 year decline in the economy, a 4 year decline in employment and an 8 year decline in consumer spending.^[46] The National Bureau of Economic Research (NBER) is a private, nonprofit, nonpartisan research organization dedicated to studying the science and empirics of economics, especially the American economy. ... Americans For Fair Taxation (AFFT) is the nations largest, single-issue grassroots organization dedicated to fundamental tax code replacement. ... the economys total quantity of capital goods is called the capital stock This page is a candidate for speedy deletion. ... Welfare economics is a branch of economics that uses microeconomic techniques to simultaneously determine the allocational efficiency of a macroeconomy and the income distribution consequences associated with it. ... The term real wages refer to wages that have been adjusted for inflation. ... For the unrelated Jesuit university in Chestnut Hill, see Boston College. ... Lovett Hall William Marsh Rice University, commonly called Rice University and opened in 1912 as The William Marsh Rice Institute for the Advancement of Letters, Science and Art, is a private, comprehensive research university located in Houston, Texas near the Museum District and adjacent to the Texas Medical Center. ... An interest rate is the price a borrower pays for the use of money he does not own, and the return a lender receives for deferring his consumption, by lending to the borrower. ... Harvard University (incorporated as The President and Fellows of Harvard College) is a private university in Cambridge, Massachusetts. ... Social Security, in the United States, refers to the Federal Old-Age, Survivors, and Disability Insurance (OASDI) program. ... President Johnson signing the Medicare amendment. ... The National Retail Federation is the worlds largest retail trade association, with membership that comprises all retail formats and channels of distribution including department, specialty, discount, catalog, Internet, independent stores, chain restaurants and grocery stores as well as the industrys key trading partners of retail goods and services. ...

Global corporations consider local tax structures when making planning and capital investment decisions. Lower corporate tax rates and favorable transfer pricing regulations can induce higher corporate investment in a given locality. The United States currently has the highest combined statutory corporate income tax rate among OECD countries.^[47] Bill Archer, former head of the House Ways and Means Committee, asked Princeton University econometricists to survey 500 European and Asian companies regarding the impact 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.^[48] In addition, the U.S. is currently the only one of the 30 OECD countries with no border adjustment element in its tax system.^[49] Proponents state that because the FairTax is automatically border adjustable, the 17% competitive advantage, on average, of foreign producers would be eliminated, immediately boosting U.S. competitiveness overseas and at home.^[19] In The FairTax Book, Boortz and Linder assert that an estimated ten trillion dollars are held in foreign accounts, largely for tax purposes and predict a large portion of those funds would become available to U.S. capital markets, bringing down interest rates, and otherwise promoting economic growth in the United States.^[7] The Organization for Economic Co-operation and Development (OECD) is an international organization of those developed countries that accept the principles of representative democracy and a free market economy. ... There are a number of people named Bill Archer: Bill Archer, a politician in the United States Bill Archer, a politician in Manitoba, Canada This is a disambiguation page — a navigational aid which lists other pages that might otherwise share the same title. ... The Committee on Ways and Means is a committee of the United States House of Representatives. ... Princeton University is a coeducational private university located in Princeton, New Jersey in the United States of America. ... Econometrics literally means economic measurement. It is a combination of mathematical economics and statistics. ... The capital market (securities markets)is the market for securities, where companies and the government can raise long-term funds. ... An interest rate is the price a borrower pays for the use of money he does not own, and the return a lender receives for deferring his consumption, by lending to the borrower. ...

The current federal tax law allows individuals to deduct the home mortgage interest costs, and donations to certain charities, from taxable income. Someone paying a 25% income tax rate would pay $250 in taxes on a $1,000 donation or mortgage interest payment, and then receive $250 back from the government as the $1000 deduction is removed from taxable income.^[50] The FairTax is tax free on mortgage interest up to the basic interest rate as determined by the Federal Reserve and donations are not taxed.^[1] The FairTax may also affect State and local government debt as the federal income tax system provides tax advantages to state and local municipal bonds.^[51] Other areas affected may be law enforcement as avoidance of income tax is sometimes used to prosecute members of organized crime syndicates to convict on charges of tax avoidance and tax evasion when insufficient direct evidence exists for other crimes. Under the FairTax proposal, this avenue of law enforcement would disappear as there would be no income tax and, therefore, no income tax evasion. However, individuals such as illegal immigrants may benefit as there would also be no federal tax savings to companies that hire illegal immigrants.^[1] Advocates claim the FairTax would provide incentive for illegal immigrants to legalize as they would otherwise not receive the FairTax rebate, paying the maximum effective tax rate.^[7] Tax law is the codified system of laws that describes government levies on economic transactions, commonly called taxes. ... Donation is a gift to a fund or cause, typically for charitable reasons. ... An interest rate is the price a borrower pays for the use of money he does not own, and the return a lender receives for deferring his consumption, by lending to the borrower. ... The Federal Reserve System is headquartered in the Eccles Building on Constitution Avenue in Washington, DC. The Federal Reserve System (also the Federal Reserve; informally The Fed) is the central banking system of the United States. ... In the United States, a municipal bond or muni is a bond issued by a state, city or other local government, or their agencies. ... Organized crime is crime carried out systematically by formal criminal organizations. ... To meet Wikipedias quality standards, this article or section may require cleanup. ... This article or section does not cite its references or sources. ... â€¹ The template below has been proposed for deletion. ...

Changes in the retail economy

Implementation

Like other firms, retailers would enjoy a zero corporate tax rate. Under the FairTax, retailers would be required to collect tax on all sales occurring within the United States. Retailers would receive a collection fee of .25% on federal funds collected.^[1] States that choose to conform to the federal base would have the added advantage of information sharing and clear interstate revenue allocation rules.

Value of used goods

Since the FairTax would not tax used goods, there is a common misunderstanding that this would create a differential, equal to the FairTax, between the price of new and used goods. Such a differential would certainly impact the sale of new goods like vehicles and homes. However, like the income tax system that contains embedded tax cost (see Supporting theories of effect), used goods would contain the embedded FairTax cost. 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.^[52] 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. The FairTax Book, co-authored by Neal Boortz and John Linder, was published on August 2, 2005, as a tool to increase public support for the FairTax Plan. ... The supply and demand model describes how prices vary as a result of a balance between product availability at each price (supply) and the desires of those with purchasing power at each price (demand). ...

Supporting theories of effect

Retail prices are inflated due to embedded taxes and compliance costs passed to the consumer by producers and suppliers. John Linder states the FairTax would eliminate almost all federal taxation costs from the supply chain, which could lower production costs by up to 30%.^[44] Americans For Fair Taxation has claimed that the production cost of domestic goods and services could decrease by approximately 22% on average after embedded taxes and compliance costs were removed, leaving the sale nearly the same after taxes.^[19] This is based on a study conducted by Dr. Dale Jorgensen, who found that producer prices would drop between 15% and 26% (depending on the type of good/service) after the switch to a consumption based tax.^[7] However, Jorgenson's research included all income and payroll taxes regardless of whether they were paid by employees or employers in the 22% embedded tax estimation. (It is also important to note that the Jorgenson model did not capture any reduction in the cost of compliance associated with changing from a complex income tax system to a simpler consumption tax.) This means that Jorgenson assumed that businesses would pass on all the cost savings from the repeal of payroll taxes and income tax withholding to consumers in the form of lower prices. Mathematically, this would have to result in employee take-home pay (net income) remaining unchanged from pre-FairTax levels.^[3]^[53] A diagram showing the effect of a per unit tax on the standard supply and demand diagram. ... A diagram showing the effect of a per unit tax on the standard supply and demand diagram. ... Taxes and subsidies have the effect of shifting the quantity and price of goods. ... Net income is equal to the income that a firm has after subtracting costs and expenses from the total revenue. ...

If businesses instead provided employees with their gross pay as expected (including income tax withholding and the employee share of payroll taxes),^[28] Arduin, Laffer & Moore Econometrics estimated production costs would decrease by a minimum of 11.55%.^[27] This decrease would offset a portion of the FairTax amount reflected in retail prices. These embedded costs include corporate taxes, compliance costs, and the employer share of payroll taxes (see Effect on tax compliance costs). The Beacon Hill Institute shows that it wouldn't matter whether prices fall or rise – the relative tax burden remains the same because if prices increased with the addition of the FairTax, wages would also rise accordingly; or if the federal reserve did not decide to accommodate (does not increase the money supply), then prices would fall and wages would remain at their net rates. Purchasing power for buying consumer goods and services in either situation would remain essentially the same, and the FairTax rate would be the same.^[28] == Is the amount of a companys revenue after deducting cost of goods sold. ... The FairTax Book, co-authored by Neal Boortz and John Linder, was published on August 2, 2005, as a tool to increase public support for the FairTax Plan. ...

The decrease in production cost would only slightly 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). Such logic is endorsed by a recent letter to the commission on tax reform by dozens of economists, including Nobel Laureate Vernon L. Smith.^[33] A study prepared by Nathan Associates for the National Retail Institute, which made many adverse assumptions, represents supporters' worst-case scenario for a consumption tax. The study predicts that the economy will grow only three percent more in ten years than it would have under the income tax and that the increase in consumption will be 1.15% less in the first year relative to what it would have been under the income tax. This study concludes that consumption will be higher in the fourth year and every year thereafter than it would have been under the income tax.^[54] The FairTax Book, co-authored by Neal Boortz and John Linder, was published on August 2, 2005, as a tool to increase public support for the FairTax Plan. ...

Effects on tax code compliance

FairTax supporters state that black market or illegal economic activity is largely untaxed under the current tax system. Economists estimate the underground economy in the United States at approximately $1 trillion annually.^[55] By imposing a sales tax, black market activity would be significantly taxed when proceeds from such activity are spent on legal consumption. For example, the sale of illegal narcotics would remain untaxed (instead of being guilty of income tax evasion, dealers would be guilty of failing to submit sales tax), but drug dealers 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 state the black market would be paying part of their share of what would otherwise be uncollected income and payroll taxes.^[7] The black market or underground market is the part of economic activity involving illegal dealings, typically the buying and selling of merchandise or services illegally. ... This box: The underground economy or shadow economy consists of all commerce that is not taxed. ... These lollipops, above, were found to contain heroin when inspected by the US Drug Enforcement Administration In jurisdictions where legislation restricts or prohibits the sale of certain popular drugs, it is common for an illegal drugs trade to develop. ...

It has been argued that if there were no net change in retail prices or tax burdens, the licit consumption of goods and services by the underground economy would continue to bear the same tax burden as before. Legal purchases under the current tax regime carry the hidden cost of implicit taxes. When an explicit tax replaces those taxes, the consumption purchases would still bear the same tax burden.^[56] However, the cost paid by the underground economy through embedded taxes is the cost associated with those paying into the income tax base. If black market activity was taxed today, the tax burden on the rest of the population would decrease from the larger base. Likewise, the large base of consumption would have illegal activity paying into the FairTax base.

Tax compliance

The current income tax system fails to collect on a significant percentage of taxes owed. The IRS estimates there are twenty additional cents of taxes owed on unreported income for every tax dollar collected. In 2001, the IRS estimated this shortfall to be over $312 billion.^[57] These figures do not include taxes lost on illegal sources of income, such as drug dealing.

Proponents assert that the transparency and simplicity of the FairTax would subject much of this unreported income to taxation. The number of tax collection points would significantly reduce as only retailers would file a tax return compared to every income earner. Research supports the claim that simplified tax systems lead to greater compliance. The IMF found that Russia's transition to a flat tax increased income reporting from 52% to 68% in one year. Similar results have occurred in Slovenia.^[57] The FairTax would reduce the number of tax filers by 80% and reduce the filing complexity to a simplified state sales tax form.^[58]^[44] The federal government would also be able to concentrate its entire tax enforcement efforts on a single tax – the FairTax. In addition, the overwhelming majority of purchases of goods and services occur in major retail outlets that would comply with the FairTax.^[28] Retailers would receive 1/4 of 1% as compensation for compliance costs.^[1]

FairTax opponents believe that tax compliance rates decrease when taxes are not automatically withheld or collected as tax liability is incurred. Compliance rates also fall when taxed entities, rather than a third party, self-report their tax liability. For example, ordinary personal income taxes can be automatically withheld and are reported to the government by a third party. Taxes without withholding and with self-reporting, such as the FairTax, can see evasion rates of 30% or more. William Gale has estimated that an evasion rate of 20% would require a FairTax rate of 39% to replace revenue lost through evasion.^[24]^[25] This would be a 65% rate when presented as a traditional sales tax.

The FairTax is a national retail sales tax, but can be administered by the states rather than a federal agency.^[1] This has a bearing on compliance, as the states' own agencies could monitor and audit businesses within that state. The .25% paid to the states amounts to 5 billion dollars the states would have available for enforcement. For example, California should receive over $500 million for enforcement. According to the California 2004-05 budget analysis, this is more than the $327 million California is spending to enforce the state's more complex sales and excise taxes.^[59] The FairTax is simpler, but extends to cover services which are not currently subject to the California sales tax. Because the federal money paid to the states for enforcement would be a percentage of the total revenue collected, the states would have an incentive to maximize collections.^[7]

University of Michigan economist Joel Slemrod argues, however, that states would face significant issues in enforcing the tax. "Even at an average rate of around 5 percent, state sales taxes are difficult to administer. Apparently the authors (of the FairTax) have not talked much to administrators who have to deal with, among other things, ineligible people declaring themselves to be businesses to qualify for the business exemption."^[60] This statement, however, is based on the understanding of state sales taxes, which differs from what would be allowed for personal and business purchases under the FairTax (see Personal vs. business purchases). UM also has campuses in Dearborn and Flint. ... The FairTax Book, co-authored by Neal Boortz and John Linder, was published on August 2, 2005, as a tool to increase public support for the FairTax Plan. ...

Underground economy

Opponents of FairTax argue that imposing a national retail sales tax would drive transactions underground and create a vast underground economy.^[3]^[61] Under a retail sales tax system, the purchase of intermediate goods would not always be taxed, since those goods would produce a retail good that will 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 6 years. Businesses must also record all taxable goods bought for 7 years. They are required to report these sales every month (see Personal vs. business purchases).^[1]^[62] This box: The underground economy or shadow economy consists of all commerce that is not taxed. ... The FairTax Book, co-authored by Neal Boortz and John Linder, was published on August 2, 2005, as a tool to increase public support for the FairTax Plan. ...

While the superiority of consumption taxes is evident to many economists and tax experts, problems could arise with using a retail sales tax rather than a value added tax (VAT).^[3] A VAT imposes a tax at every intermediate step of production, so the goods reach the final consumer with much of the tax already in the price, along with some extra overhead. The retail seller has little incentive to conceal retail sales, since he has already paid much of the good's tax. Retailers are unlikely to subsidize the consumer's tax evasion by concealing sales. In contrast, a retailer has paid no tax on goods under a sales tax system. This provides an incentive for retailers to conceal sales and engage in "tax arbitrage" by sharing some of the illicit tax savings with the final consumer.^[63] Value added tax (VAT) is tax on exchanges. ... Drawing of a self-service store. ... In economics, arbitrage is the practice of taking advantage of a price differential between two or more markets: a combination of matching deals are struck that capitalize upon the imbalance, the profit being the difference between the market prices. ...

In the United States, a general sales tax is imposed in 45 states plus the District of Columbia (accounting for over 97 percent of both population and economic output). Most states also collect a variety of local sales taxes including county, city, and transit taxes.^[64] The United States has a large infrastructure for taxing sales that many countries do not have. Proponents respond to the underground economy argument by pointing out that, whereas tax evasion under the current income tax system requires only one person (the payer) to lie on their tax forms, tax evasion under the FairTax requires collusion of both the payer (the retail purchaser) and the payee (the retail seller). Furthermore, the number of individuals required to file taxes drops from approximately 135 million to 25 million. This 84% drop in the number of collection points will allow the tax administration to view tax fraud with greater scrutiny.^[58] Proponents of the FairTax see a substantial amount of additional tax revenue from those engaging in the black market, as a sales tax would require all who consume to be taxed (see Effects on tax code compliance). The FairTax Book, co-authored by Neal Boortz and John Linder, was published on August 2, 2005, as a tool to increase public support for the FairTax Plan. ...

Personal vs. business purchases

In order for an individual to purchase items tax-free for business purposes, the business would be required to be a registered seller with the state sales tax authority, who could collect the FairTax along with the state sales tax. The state would issue the business a registered seller's certificate. This would enable the business to purchase tax free from wholesale vendors, but they must give a copy of their registration certificate to the vendor to leave an audit trail.^[1] When an item is purchased for business use from a retail vendor, the business would have to pay the tax on the purchase and take a credit against the tax due on their sales tax return. Taxable property and services purchased by a qualified non-profit or religious organization 'for business purposes' would not be taxable.^[65] Wholesaling consists of the sale of goods/merchandise to retailers, to industrial, commercial, institutional, or other professional business users or to other wholesalers and related subordinated services. ... A vendor is one who sells something. ... An audit is an evaluation of an organization, system, process, project or product. ... Drawing of a self-service store. ...

Businesses would be required to submit monthly or quarterly reports (depending on sales volume) of taxable sales and sales tax collected on their retail sales to the tax authority.^[8]^[62] During audits, the business would have to produce invoices for the "business purchases" that they did not pay sales tax on, and would have to be able to show that they were genuine business expenses.^[62] Since 130 million individuals would no longer be filing tax returns, there would only be about 25 million businesses that could be audited.^[58] Advocates claim that this would greatly increase the likelihood of business audits, making tax evasion behavior much more risky.^[62] Additionally, the FairTax legislation has several fines and penalties for non-compliance and authorizes a mechanism for reporting tax cheats and obtaining a reward.^[1] An invoice is a commercial document issued by a seller to a buyer, indicating the products, quantities and agreed prices for products or services with which the Seller has already provided the Buyer. ...

To prevent businesses from purchasing everything for their employees, in a family business for example, goods and services bought by the business for the employees that are not strictly for business use would be taxable.^[1] Health insurance or medical expenses would be an example where the business would have to pay the FairTax on these purchases. This Is not a good source Health insurance is a type of insurance whereby the insurer pays the medical costs of the insured if the insured becomes sick due to covered causes, or due to accidents. ... See drugs, medication, and pharmacology for substances that are used to treat patients. ...

Transition effects

Because the FairTax proposal would replace various taxes with a single sales tax, several areas may experience unique effects through the transition. Image File history File links Download high resolution version (828x372, 90 KB) Summary I Morphh 02:26, 5 April 2006 (UTC) created this image based on a similar graph by the Americans for Fair Taxation. ... Image File history File links Download high resolution version (828x372, 90 KB) Summary I Morphh 02:26, 5 April 2006 (UTC) created this image based on a similar graph by the Americans for Fair Taxation. ... The American Farm Bureau Federation calls itself the Voice of Agriculture, and was founded in 1919 in Chicago, Illinois at a meeting attended by a number of state representatives. ...

Repeal of Sixteenth Amendment

If the FairTax bill were passed, permanent elimination of income taxation would not be guaranteed; the FairTax bill would repeal much of the existing tax code, but the Sixteenth Amendment would remain in place. Cases decided by the United States Supreme Court after the ratification of the Sixteenth Amendment have established that Congress has the power to enact an income tax even if the amendment did not exist.^[66] The elimination of the possibility that income taxation would return (through a separate Congressional bill), requires a repeal of the Sixteenth Amendment to the United States Constitution along with expressly prohibiting an income tax.^[19] This is referred to as an "aggressive repeal". The Constitution, however, does not require an income tax, it only allows one. Separate income taxes enforced by the State would be unaffected by the federal repeal. The Internal Revenue Code (or IRC) (more formally, the Internal Revenue Code of 1986, as amended) is the main body of domestic statutory tax law of the United States organized topically, including laws covering the income tax (see Income tax in the United States), payroll taxes, gift taxes, estate taxes... Amendment XVI (the Sixteenth Amendment) of the United States Constitution, authorizing income taxes in their present form, was ratified on February 3, 1913. ... The Supreme Court Building, Washington, D.C. The Supreme Court Building, Washington, D.C., (large image) The Supreme Court of the United States, located in Washington, D.C., is the highest court (see supreme court) in the United States; that is, it has ultimate judicial authority within the United States... The United States Constitution is the supreme law of the United States of America. ...

Since passing the FairTax would only require a simple majority in each house of Congress along with the signature of the President, and enactment of a constitutional amendment must be approved by two thirds of each house of Congress, and three quarters of the individual U.S. states, it is possible that passage of the FairTax bill would simply add another taxation system. If a new income tax bill was passed after the FairTax passage, a hybrid system could develop. However, there is nothing preventing the addition of a national sales tax, or VAT tax, on top of today's income tax system. The Americans For Fair Taxation plan is to first pass the FairTax and then to focus grassroots efforts on HJR 16, sponsored by Congressman Steve King (R-IA), that calls for the repeal of the Sixteenth Amendment.^[19]^[67] A congress is a gathering of people, especially a gathering for a political purpose. ... Abraham Lincoln, 16th President of the United States (1861-1865) The majority of this article is about heads of states. ... A constitutional amendment is an alteration to the constitution of a nation or a state. ... A congress is a gathering of people, especially a gathering for a political purpose. ... A U.S. state is any one of the 50 states which have membership of the federation known as the United States of America (USA or U.S.). The separate state governments and the U.S. federal government share sovereignty. ... // In biology, hybrid has two meanings. ... Americans For Fair Taxation (AFFT) is the nations largest, single-issue grassroots organization dedicated to fundamental tax code replacement. ... Steve King (born May 28, 1949), American politician, has been a Republican member of the United States House of Representatives since 2003, representing the 5th District of Iowa (map). ...

Congressman Linder, the bill sponsor, has stated "If the FairTax is enacted, I expect that the Congress and states would promptly begin consideration of legislation to repeal the Sixteenth Amendment. To make certain that occurs, however, I am in favor of adding language to H.R. 25 during the 110th Congress that includes a sunset provision, meaning that either we succeed in repealing the Sixteenth Amendment within 5 years after the implementation of the FairTax or the FairTax goes away. In my view, we simply cannot risk having both a national income tax and a national sales tax in place at the same time."^[68] The 110th United States Congress will be in session from noon on January 3, 2007 until noon on January 3, 2009. ... In public policy, a sunset provision or sunset clause is a provision in a statute or regulation that terminates or repeals all or portions of the law after a specific date, unless further legislative action is taken to extend it. ...

Effect on savers

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. 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.

Critics have claimed 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.^[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. The rebates would supplement accrued savings, covering taxes up to the poverty level.^[8] The income taxes on capital gains, social security and pension benefits would be eliminated under FairTax. The FairTax would also eliminate what some claim to be the double taxation on savings that is part of estate taxes. 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.^[1] Supporters suggest these changes would offset paying the FairTax under transition conditions.^[7] Estate tax is a form of tax imposed in the United States upon the transfer of the property of the estate of a deceased person that is left to a living person or organization. ... Social Security, in the United States, refers to the Federal Old-Age, Survivors, and Disability Insurance (OASDI) program. ...

In contrast to ordinary savings, money in tax-deferred savings plans such as IRA, 401k, etc. would be withdrawn tax-free. There is currently $11 trillion in such accounts. This represents future tax revenue owed to the federal government under the income tax system, which has been estimated at $3 trillion.^[70] This revenue would then fall under the FairTax system for collection.

Income tax industry

During the transition, many or most of the employees of the IRS (105,978 in 2005)^[71] would face loss of employment.^[28] In addition, income tax preparers (many seasonal), tax lawyers, CPAs, tax compliance staff in medium-to-large businesses, and software companies which sell tax preparation software (such as Drake Software, TaxCut, and TurboTax), could face significant drops, changes, or loss of employment.^[19] Proponents state the income tax industry often provides year round services for financial planning and investment, which is expected to increase under the FairTax proposal and could offset some of these changes.^[72] New technologies used by the IRS, such as e-filing, are simplifying the process and already threatening a portion of this industry as goals set by Congress call for at least 80 percent of federal returns to be submitted electronically by 2007.^[73] According to IRS testimony from 2004, 45% of revenue agents and officers would become eligible for retirement in the preceding 5 years and there is concern about the loss of their work force as their hiring efforts struggle to keep pace with attrition.^[74] In addition, the IRS would not go completely out of commission until 3 years after the FairTax was enacted, providing employees time to find other employment.^[1] Proponents claim the projected 10.5% growth in the economy during the first year of the FairTax would provide plenty of new jobs to these workers that are typically well educated and well equipped with transferable skills.^[19] H&R Block (NYSE: HRB) is a tax preparation and personal finance management company founded by brothers Henry W. and Richard Bloch in Kansas City in 1955 (they changed the name of the company to prevent mispronunciation). ... Intuit Inc. ...

Time arbitrage

In the period before the FairTax was implemented, there could be a strong incentive for individuals to buy goods without the sales tax using credit. After the FairTax was in effect, the credit could be paid off using untaxed payroll. Opponents of the FairTax worry it could exacerbate an existing consumer debt problem.^[75] On the other hand, proponents of the FairTax note that this effect could also allow individuals to pay off their existing (post-FairTax) debt quicker.^[7] With the retail inventory tax credit, and the removal of embedded taxes in the retail prices of goods and services, it is unknown whether this will be an issue.

Grassroots movement

While initially financed by a group of businessmen from Houston, Texas, the FairTax has generated a large grassroots tax reform movement in recent years. This movement has been led by the Houston based non-partisan political advocacy group Americans For Fair Taxation. This organization 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. Besides its paid staff in Houston, AFFT also includes volunteers who are working to get the FairTax enacted.^[8] The internet, blogsphere, and electronic mailing lists like Yahoo! Groups have contributed to informing, organizing, and gaining support for the FairTax. Many grassroots web sites have been created by supporters to help organize the effort and promote the plan. Popular web sites, such as FairTaxGroups.com and FairTaxBlog.com, serve as a resource for grassroots efforts by providing news, forums for discussion, national calendars, and event organization. Much support has been achieved by talk radio personality Neal Boortz. Boortz's latest book (co-authored by Georgia Congressman John Linder) entitled The FairTax Book, explains the proposal and spent time atop the New York Times bestseller list. Boortz stated that he donates his share of the proceeds to charity to promote the book.^[76] It is also a frequent topic of discussion on The Neal Boortz Show and a common gift to callers. In addition, Boortz and Linder have organized several FairTax rallies to publicize support for the plan. Other media personalities have also assisted in growing grassroots support including radio and former TV talk show host Larry Elder, radio host and former Senatorial candidate Herman Cain, Fox News and radio host Sean Hannity, and ABC News co-anchor John Stossel. Image File history File links Download high resolution version (900x675, 268 KB) Summary Image taken at the Orlando FairTax Rally - Taken By Jonathon Rube with ORLANDO360 More images located at http://tax. ... Image File history File links Download high resolution version (900x675, 268 KB) Summary Image taken at the Orlando FairTax Rally - Taken By Jonathon Rube with ORLANDO360 More images located at http://tax. ... Nickname: The City Beautiful, O-Town, 407 Location in Orange County and the state of Florida. ... A man carries a sign at the September 24, 2005 anti-war protest, a demonstration in Washington, D.C. American Civil Rights March on Washington, leaders marching from the Washington Monument to the Lincoln Memorial, August 28, 1963. ... July 28 is the 209th day (210th in leap years) of the year in the Gregorian Calendar, with 156 days remaining. ... 2006 (MMVI) is a common year starting on Sunday of the Gregorian calendar. ... Nickname: Space City Location in the state of Texas Coordinates: Counties Harris County Fort Bend County Montgomery County Mayor Bill White Area - City 1,558 kmÂ² (601. ... A grassroots political movement is one driven by the constituents of a community. ... Politics is the process and method of decision-making for groups of human beings. ... Partisan may refer to: A member of a lightly-equipped irregular military force formed to oppose control of an area by a foreign power or by an army of occupation. ... An advocacy group, interest group or lobbying group is a group, however loosely or tightly organized, doing advocacy: those determined to encourage or prevent changes in public policy without trying to be elected. ... Americans For Fair Taxation (AFFT) is the nations largest, single-issue grassroots organization dedicated to fundamental tax code replacement. ... An organization or organisation (read more about -ize vs -ise) is a formal group of people with one or more shared goals. ... One Brick volunteers help at a soup kitchen. ... BlogSphere is the name of a blogging tool for Lotus Domino. ... Electronic mailing lists are a special usage of email that allows for widespread distribution of information to many Internet users. ... Yahoo! Groups is an electronic mailing list service provided by Yahoo!. Yahoo! has over the years bought many other mailing list providers, including the popular eGroups, and combined them into one system. ... Americans For Fair Taxation (AFFT) is the nations largest, single-issue grassroots organization dedicated to fundamental tax code replacement. ... Talk radio is a radio format which features discussion of topical issues. ... Neal Boortz (born April 6, 1945), is a U.S. talk radio host based in Atlanta, Georgia and nationally syndicated by Cox Radio and the Jones Radio Networks. ... John Elmer Linder (born December 9, 1942), American politician, has been a Republican member of the United States House of Representatives since 1993, representing the 7th District of Georgia (map). ... The New York Times is an internationally known daily newspaper published in New York City and distributed in the United States and many other nations worldwide. ... A charitable organization (also known as a charity) is a trust, company or unincorporated association established for charitable purposes only. ... A man carries a sign at the September 24, 2005 anti-war protest, a demonstration in Washington, D.C. American Civil Rights March on Washington, leaders marching from the Washington Monument to the Lincoln Memorial, August 28, 1963. ... Larry Elder Laurence Allen Larry Elder (born April 27, 1952 in Los Angeles, California) aka the Sage from South Central is an American libertarian-minded Republican radio and former TV talk show host and author whose The Larry Elder Show is nationally syndicated on ABC Radio Networks. ... Herman Cain (Born December 1945) is a conservative Black businessman, politician, and radio talk-show host from Georgia. ... The Fox News Channel (FNC) is an United States-based cable and satellite news channel. ... Sean Patrick Hannity (born December 30, 1961, in New York City, New York) is an American conservative talk radio host, an executive producer of Fox News Channels program Hannity & Colmes, and the author of two books. ... ABC News logo ABC News is a division of ABC television and radio networks (ABC), owned by The Walt Disney Company. ... John F. Stossel (born March 6, 1947) is a consumer reporter and co-anchor for the ABC News show 20/20. ...

See also

The Alternative Minimum Tax (AMT) system is part of the federal income tax system in the United States. ... A sales tax is a tax on consumption. ... A flat tax, also called a proportional tax, is a system that taxes all entities in a class (typically either citizens or corporations) at the same rate (as a proportion on income), as opposed to a graduated, or progressive, scheme. ... An income tax is a tax levied on the financial income of persons, corporations or other legal entities. ... The United States imposes an income tax on the taxable income of individuals, corporations, trusts, decedents estates and certain bankruptcy estates. ... A sales tax is a state or locality imposed percentage tax on the selling or renting of certain property or services. ... A sales tax is a tax on consumption and is normally a certain percentage that is added onto the price of a good or service that is purchased. ... Taxation in the United States is a complex system which may involve payment to at least four different levels of government. ... Value added tax (VAT) is tax on exchanges. ...

Notes

^ ^a ^b ^c ^d ^e ^f ^g ^h ⁱ ^j ^k ^l ^m ⁿ ^o H.R. 25: Fair Tax Act of 2005. 109th U.S. Congress. The Library of Congress (2005-01-04). Retrieved on 2006-07-20.
^ ^a ^b ^c ^d ^e ^f ^g ^h Kotlikoff, Laurence (2005-03-07). The Case for the 'FairTax'. The Wall Street Journal. Retrieved on 2006-07-23.
^ ^a ^b ^c ^d ^e ^f ^g ^h ⁱ ^j ^k ^l ^m ⁿ ^o Regnier, Pat (2005-09-07). Just how fair is the FairTax?. Money Magazine. Retrieved on 2006-07-20.
^ ^a ^b ^c ^d ^e Gale, William (1998-03). Don't Buy the Sales Tax. The Brookings Institution. Retrieved on 2006-07-23.
^ ^a ^b Kotlikoff, Laurence; Jokisch, Sabine (2006-09). Simulating the Dynamic Macroeconomic and Microeconomic Effects of the FairTax. National Bureau of Economic Research & Centre for European Economic Research. Retrieved on 2006-10-31.
^ ^a ^b Kotlikoff, Laurence; Rapson, David (2006-11). Comparing Average and Marginal Tax Rates under the FairTax and the Current System of Federal Taxation. Boston University. Retrieved on 2006-11-04.
^ ^a ^b ^c ^d ^e ^f ^g ^h ⁱ ^j ^k Boortz, Neal; Linder, John (2006). The Fair Tax Book, Paperback, Regan Books. ISBN 0-06-087549-6.
^ ^a ^b ^c ^d ^e ^f ^g ^h ⁱ ^j Ose, Al (2002). America's Best Kept Secret Fairtax: Give Yourself a 25% Raise, Paperback, Authorhouse. ISBN 1-4033-9189-0.
^ ^a ^b H.R.25 2003 Cosponsors. 108th U.S. Congress. The Library of Congress (2003-01-07). Retrieved on 2006-08-22.
^ ^a ^b S.1493 2003 Cosponsors. 108th U.S. Congress. The Library of Congress (2003-07-30). Retrieved on 2006-08-22.
^ ^a ^b ^c H.R.25 2005 Cosponsors. 109th U.S. Congress. The Library of Congress (2005-01-04). Retrieved on 2006-08-22.
^ ^a ^b S.25 2005 Cosponsors. 109th U.S. Congress. The Library of Congress (2005-01-24). Retrieved on 2006-08-22.
^ Bender, Merrill (2005-06-01). Economists Back FairTax Proposal. Budget & Tax News. The Heartland Institute. Retrieved on 2006-07-20.
^ H.R. 1040 Cosponsors. 109th U.S. Congress. The Library of Congress (2005-03-02). Retrieved on 2006-07-20.
^ ^a ^b Vance, Laurence (2005-12-12). There is No Such Thing as a Fair Tax. Ludwig von Mises Institute. Retrieved on 2006-07-20.
^ ^a ^b ^c ^d ^e ^f ^g ^h ⁱ National Retail Sales Tax. President's Advisory Panel for Federal Tax Reform (2005-11-01). Retrieved on 2006-07-23.
^ The FairTax Calculator. National Retail Sales Tax Alliance. Retrieved on 2006-07-23.
^ FairTax Effective Tax Rates. Americans For Fair Taxation (2000). Retrieved on 2006-07-23.
^ ^a ^b ^c ^d ^e ^f ^g ^h FairTax Frequently Asked Questions. Americans For Fair Taxation. Retrieved on 2006-10-18.
^ Income, Poverty, and Health Insurance Coverage in the United States: 2005. U.S. Census Bureau (2005-08). Retrieved on 2006-10-29.
^ ^a ^b ^c ^d ^e ^f Rebuttal to the tax panel report and recommendations. Americans for Fair Taxation (2006-11). Retrieved on 2006-11-02.
^ Gingrich, Newt; Ferrara, Peter (2005-09-26). Doesn't Anyone Know the Score?. Institute for Policy Innovation. Wall Street Journal. Retrieved on 2006-07-20.
^ Jorgenson, Dale; Yun, Kun-Young (2002). Investment, Vol. 3: Lifting the Burden: Tax Reform, the Cost of Capital, and U.S. Economic Growth, Hardcover, The MIT Press. ISBN 0-262-10091-6.
^ ^a ^b Gale, William (2005-05-16). The National Retail Sales Tax: What Would The Rate Have To Be?. Tax Break. Tax Analysis. Retrieved on 2005-06-15.
^ ^a ^b Burton, David; Mastromarco, Dan (1998-03-16). Rebuttal of the William Gale papers. The Argus Group. Americans For Fair Taxation. Retrieved on 2006-10-26.
^ ^a ^b ^c ^d Burton, David; Mastromarco, Dan (1998-02-04). Rebuttal of the Joint Committee on Taxation (JCT) letter. The Argus Group. Americans For Fair Taxation. Retrieved on 2006-10-26.
^ ^a ^b A Macroeconomic Analysis of the FairTax Proposal. Arduin, Laffer & Moore Econometrics (2006-02). Retrieved on 2006-11-07.
^ ^a ^b ^c ^d ^e ^f ^g ^h ⁱ ^j Bachman, Paul; Haughton, Jonathan; Kotlikoff, Laurence J.; Sanchez-Penalver, Alfonso; Tuerck, David G. (2006-09). Taxing Sales under the FairTax – What Rate Works?. Beacon Hill Institute. Boston University. Retrieved on 2006-09-30.
^ Burns, Max; Barrow, John (2006-10). Atlanta Press Club Debate 2006 . WSAV. Retrieved on 2006-11-05.
^ Kotlikoff, Laurence (2006-04). Grading the President’s Tax Reform Panel’s Plan. The Berkeley Electronic Press. Retrieved on 2006-07-23.
^ Debate on the Fair Tax - Graetz Rebuttal. Americans For Fair Taxation (2006-04-16). Retrieved on 2006-10-26.
^ Walby, Karen (2005-12-18). Phil Hinson's Tax Reform Hour. Radio Sandy Springs. Hoosiers for the FairTax. Retrieved on 2006-07-20.
^ ^a ^b ^c Economists' Endorsement. An Open Letter to the President, the Congress, and the American people. Americans For Fair Taxation. Retrieved on 2006-07-23.
^ Bartlett, Bruce (2004-08-09). A National Sales Tax No Vote. National Review Online Financial. Retrieved on 2006-08-07.
^ The Effects of Replacing Most Federal Taxes with a National Sales Tax: A State-by-State Distributional Analysis. Institute on Taxation and Economic Policy (2004-09). Retrieved on 2006-07-23.
^ Linbeck, Leo. Tax Reform Group Blasts Presidential Tax Panel. Foster Friess. Retrieved on 2006-07-23.
^ Burton, David. A response to Institute on Taxation and Economic Policy. The Argus Group. Americans For Fair Taxation. Retrieved on 2006-10-26.
^ Kamin, David; Shapiro, Isaac (2004-09-13). Studies Shed New Light on Effects of Administration's Tax Cuts. Center on Budget and Policy Priorities. Retrieved on 2006-07-23.
^ Chambliss, Saxby; Linder, John; King, Steve; Brady, Kevin (2005-09-27). Revise the tax law. The Washington Times. Retrieved on 2006-07-23.
^ Kotlikoff, Laurence; Rapson, David (2005-12). Would the FairTax Raise or Lower Marginal and Average Tax Rates. National Bureau of Economic Research. Retrieved on 2006-10-10.
^ Edwards, Chris (2005). Downsizing the Federal Government, Hardcover, Cato Institute. ISBN 1-930865-82-1.
^ Summary of Estimates of the Costs of the Federal Tax System. U.S. Government Accountability Office (2005-08-26). Retrieved on 2006-07-23.
^ Bartlett, Bruce (2005-10-11). The Times is still wrong on taxation. Free-Market News Network. Retrieved on 2006-07-23.
^ ^a ^b ^c ^d ^e Linder, John. The FairTax. The Online Office of John Linder. Retrieved on 2006-08-07.
^ ^a ^b Trowell, Christopher. Clean out America’s Economic Arteries. Committee on Ways and Means. Retrieved on 2006-07-24.
^ Vargas, Melody (2005-03-03). Retailers Question Greenspan on Consumption Tax. National Retail Federation. About. Retrieved on 2006-07-24.
^ Hodge, Scott; Atkins, Chris (2005-11-15). The U.S. Corporate Income Tax System: Once a World Leader, Now A Millstone Around the Neck of American Business. The Tax Foundation. Retrieved on 2006-08-03.
^ Wagner, Scott (2005-11-08). Abolish the IRS. The Observer Online. Free Republic. Retrieved on 2006-07-24.
^ Linbeck, Leo (2006-06-22). Testimony Before the Subcommittee on Select Revenue Measures. House Committee on Ways and Means. Retrieved on 2006-08-11.
^ Publication 936. Internal Revenue Service (2005). Retrieved on 2006-11-13.
^ Types of Bonds. SmartMoney.com. Yahoo Finance. Retrieved on 2006-07-24.
^ Landsburg, Steven (1998). Price Theory and Applications, 4th edition (Hardcover), South-Western Educational Publishing. ISBN 0-538-88206-9.
^ Boortz, Neal (2005-09-15). The FairTax - Straightening out some confusion. Cox Radio. Retrieved on 2006-08-04.
^ Why retailers should support the FairTax. Americans For Fair Taxation. Retrieved on 2006-07-24.
^ McTague, Jim (2005-04). The Underground Economy. Barron's. The Wall Street Journal Classroom Edition. Retrieved on 2006-07-25.
^ Moffatt, Mike (2006). FairTax Quandry. About, Inc. Retrieved on 2006-09-06.
^ ^a ^b Simplifying tax systems: The case for flat taxes. Barron's. The Economist (2005-04-14). Retrieved on 2006-07-25.
^ ^a ^b ^c What the federal tax system is costing you – besides your taxes!. Americans For Fair Taxation (2005-04-14). Retrieved on 2006-07-25.
^ California Sales Tax Enforcement Costs - Analysis of the 2004-05 Budget Bill. Legislative Analyst's Office (2004-02). Retrieved on 2006-07-25.
^ Slemrod, Joel (2005-11-13). 'The Fairtax Book' and 'Flat Tax Revolution': 1040EZ — Really, Really EZ. New York Times. Retrieved on 2006-07-25.
^ Franks, Dale (2004-12-08). The NST v. the VAT. QandO. Retrieved on 2006-08-12.
^ ^a ^b ^c ^d Evasion potential of the FairTax. The Fair Tax Blog (2005-08-24). Retrieved on 2006-07-25.
^ Franks, Dale (2005-08-25). Fair Tax Supporters: Whistling Past the Graveyard. QandO. Retrieved on 2006-07-25.
^ Sales Tax FAQ. Sales Tax Institute. Retrieved on 2006-08-11.
^ The impact of the FairTax on religious and other charitable giving. Americans For Fair Taxation. Retrieved on 2006-08-13.
^ Brushaber v. Union Pacific R. Co., 240 U.S. 1 (1916). U.S. Supreme Court. Findlaw (1916-01-24). Retrieved on 2006-08-07.
^ H. J. RES. 16. 109th U.S. Congress. The Library of Congress (2005-02-01). Retrieved on 2006-08-22.
^ Linder, John. John Linder's FairTax FAQ. Congress. Retrieved on 2006-09-06.
^ Moffatt, Mike. FairTax - Income Taxes vs. Sales Taxes. About. Retrieved on 2006-07-25.
^ Boskin, Michael (2003-01). Future Income Tax Revenue from Deferred Accounts. Stanford University. University of California, Berkeley. Retrieved on 2006-07-25.
^ IRS Labor Force, Compared to National Totals for Civilian and Federal . Internal Revenue Service (2005). Retrieved on 2006-11-18.
^ The impact of the FairTax on investment. Americans For Fair Taxation. Retrieved on 2006-11-18.
^ Becker, David (2002-3-11). IRS e-filing plans worry tax industry. CNET News. Retrieved on 2006-11-18.
^ Gardiner, Pamela (2004-7-21). Treasury Inspector General for Tax Administration Testimony. U.S. Senate Committee on Finanace. Retrieved on 2006-11-18.
^ Household Debt: A Growing Challenge for American Families and Federal Policy. OMB Watch (2006-07-25). Retrieved on 2006-08-07.
^ Boortz, Neal (2005-09-07). Nealz Nuze. Cox Radio. Retrieved on 2006-08-07.

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August 22 is the 234th day of the year in the Gregorian calendar (235th in leap years), with 131 days remaining. ... 2006 (MMVI) is a common year starting on Sunday of the Gregorian calendar. ... July 20 is the 201st day (202nd in leap years) of the year in the Gregorian Calendar, with 164 days remaining. ... 2006 (MMVI) is a common year starting on Sunday of the Gregorian calendar. ... July 20 is the 201st day (202nd in leap years) of the year in the Gregorian Calendar, with 164 days remaining. ... 2006 (MMVI) is a common year starting on Sunday of the Gregorian calendar. ... July 20 is the 201st day (202nd in leap years) of the year in the Gregorian Calendar, with 164 days remaining. ... 2006 (MMVI) is a common year starting on Sunday of the Gregorian calendar. ... July 23 is the 204th day (205th in leap years) of the year in the Gregorian Calendar, with 161 days remaining. ... 2006 (MMVI) is a common year starting on Sunday of the Gregorian calendar. ... July 23 is the 204th day (205th in leap years) of the year in the Gregorian Calendar, with 161 days remaining. ... 2006 (MMVI) is a common year starting on Sunday of the Gregorian calendar. ... July 23 is the 204th day (205th in leap years) of the year in the Gregorian Calendar, with 161 days remaining. ... 2006 (MMVI) is a common year starting on Sunday of the Gregorian calendar. ... October 18 is the 291st day of the year (292nd in leap years). ... 2006 (MMVI) is a common year starting on Sunday of the Gregorian calendar. ... October 29 is the 302nd day of the year (303rd in leap years) in the Gregorian calendar. ... 2006 (MMVI) is a common year starting on Sunday of the Gregorian calendar. ... November 2 is the 306th day of the year (307th in leap years) in the Gregorian Calendar, with 59 days remaining. ... 2006 (MMVI) is a common year starting on Sunday of the Gregorian calendar. ... 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July 23 is the 204th day (205th in leap years) of the year in the Gregorian Calendar, with 161 days remaining. ... 2006 (MMVI) is a common year starting on Sunday of the Gregorian calendar. ... August 7 is the 219th day of the year in the Gregorian Calendar (220th in leap years), with 146 days remaining. ... 2006 (MMVI) is a common year starting on Sunday of the Gregorian calendar. ... July 24 is the 205th day (206th in leap years) of the year in the Gregorian Calendar, with 160 days remaining. ... 2006 (MMVI) is a common year starting on Sunday of the Gregorian calendar. ... July 24 is the 205th day (206th in leap years) of the year in the Gregorian Calendar, with 160 days remaining. ... 2006 (MMVI) is a common year starting on Sunday of the Gregorian calendar. ... August 3 is the 215th day of the year in the Gregorian Calendar (216th in leap years), with 150 days remaining. ... 2006 (MMVI) is a common year starting on Sunday of the Gregorian calendar. ... July 24 is the 205th day (206th in leap years) of the year in the Gregorian Calendar, with 160 days remaining. ... 2006 (MMVI) is a common year starting on Sunday of the Gregorian calendar. ... August 11 is the 223rd day of the year (224th in leap years) in the Gregorian Calendar. ... 2006 (MMVI) is a common year starting on Sunday of the Gregorian calendar. ... November 13 is the 317th day of the year (318th in leap years) in the Gregorian Calendar, with 48 days remaining. ... 2006 (MMVI) is a common year starting on Sunday of the Gregorian calendar. ... July 24 is the 205th day (206th in leap years) of the year in the Gregorian Calendar, with 160 days remaining. ... 2006 (MMVI) is a common year starting on Sunday of the Gregorian calendar. ... August 4 is the 216th day of the year in the Gregorian Calendar (217th in leap years), with 149 days remaining. ... 2006 (MMVI) is a common year starting on Sunday of the Gregorian calendar. ... July 24 is the 205th day (206th in leap years) of the year in the Gregorian Calendar, with 160 days remaining. ... 2006 (MMVI) is a common year starting on Sunday of the Gregorian calendar. ... July 25 is the 206th day (207th in leap years) of the year in the Gregorian calendar, with 159 days remaining. ... 2006 (MMVI) is a common year starting on Sunday of the Gregorian calendar. ... September 6 is the 249th day of the year (250th in leap years). ... 2006 (MMVI) is a common year starting on Sunday of the Gregorian calendar. ... July 25 is the 206th day (207th in leap years) of the year in the Gregorian calendar, with 159 days remaining. ... 2006 (MMVI) is a common year starting on Sunday of the Gregorian calendar. ... July 25 is the 206th day (207th in leap years) of the year in the Gregorian calendar, with 159 days remaining. ... 2006 (MMVI) is a common year starting on Sunday of the Gregorian calendar. ... July 25 is the 206th day (207th in leap years) of the year in the Gregorian calendar, with 159 days remaining. ... 2006 (MMVI) is a common year starting on Sunday of the Gregorian calendar. ... July 25 is the 206th day (207th in leap years) of the year in the Gregorian calendar, with 159 days remaining. ... 2006 (MMVI) is a common year starting on Sunday of the Gregorian calendar. ... August 12 is the 224th day of the year (225th in leap years) in the Gregorian Calendar. ... 2006 (MMVI) is a common year starting on Sunday of the Gregorian calendar. ... July 25 is the 206th day (207th in leap years) of the year in the Gregorian calendar, with 159 days remaining. ... 2006 (MMVI) is a common year starting on Sunday of the Gregorian calendar. ... July 25 is the 206th day (207th in leap years) of the year in the Gregorian calendar, with 159 days remaining. ... 2006 (MMVI) is a common year starting on Sunday of the Gregorian calendar. ... August 11 is the 223rd day of the year (224th in leap years) in the Gregorian Calendar. ... 2006 (MMVI) is a common year starting on Sunday of the Gregorian calendar. ... August 13 is the 225th day of the year in the Gregorian Calendar (226th in leap years), with 140 days remaining. ... 2006 (MMVI) is a common year starting on Sunday of the Gregorian calendar. ... August 7 is the 219th day of the year in the Gregorian Calendar (220th in leap years), with 146 days remaining. ... 2006 (MMVI) is a common year starting on Sunday of the Gregorian calendar. ... August 22 is the 234th day of the year in the Gregorian calendar (235th in leap years), with 131 days remaining. ... 2006 (MMVI) is a common year starting on Sunday of the Gregorian calendar. ... September 6 is the 249th day of the year (250th in leap years). ... 2006 (MMVI) is a common year starting on Sunday of the Gregorian calendar. ... July 25 is the 206th day (207th in leap years) of the year in the Gregorian calendar, with 159 days remaining. ... 2006 (MMVI) is a common year starting on Sunday of the Gregorian calendar. ... July 25 is the 206th day (207th in leap years) of the year in the Gregorian calendar, with 159 days remaining. ... Image File history File links Excel_2003. ... 2006 (MMVI) is a common year starting on Sunday of the Gregorian calendar. ... November 18 is the 322nd day of the year (323rd in leap years) in the Gregorian Calendar. ... 2006 (MMVI) is a common year starting on Sunday of the Gregorian calendar. ... November 18 is the 322nd day of the year (323rd in leap years) in the Gregorian Calendar. ... 2006 (MMVI) is a common year starting on Sunday of the Gregorian calendar. ... November 18 is the 322nd day of the year (323rd in leap years) in the Gregorian Calendar. ... 2006 (MMVI) is a common year starting on Sunday of the Gregorian calendar. ... November 18 is the 322nd day of the year (323rd in leap years) in the Gregorian Calendar. ... 2006 (MMVI) is a common year starting on Sunday of the Gregorian calendar. ... August 7 is the 219th day of the year in the Gregorian Calendar (220th in leap years), with 146 days remaining. ... 2006 (MMVI) is a common year starting on Sunday of the Gregorian calendar. ... August 7 is the 219th day of the year in the Gregorian Calendar (220th in leap years), with 146 days remaining. ...

References

2006 (MMVI) is a common year starting on Sunday of the Gregorian calendar. ... October 14 is the 287th day of the year (288th in leap years) in the Gregorian calendar. ...

External links

Legislation Image File history File links Sound-icon. ... A tax (also known as a duty) is a financial charge or other levy imposed on an individual or a legal entity by a state or a functional equivalent of a state (e. ... Podcasting is a way of publishing sound files to the Internet, allowing users to subscribe to a feed and receive new audio files automatically. ... Image File history File links Wikiquote-logo-en. ... This article or section does not cite its references or sources. ... Image File history File links FilmRoll-small. ...

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