July 23, 2008 - 02:54 PM

The FairTax

by Rep. John Linder

We are rapidly coming to the point when people will be telling stories about what a great and powerful nation the United States of America used to be.  The cost we are asking our citizens to endure makes us less than competitive in a global economy.  We have a tax law with nearly 70,000 pages of law and regulations.  Our tax on capital is crippling.  Our tax on income for the highest earners takes half of what we earn.  All of these costs, as well as the cost of complying with a code that no one understands, become embedded in the cost of our goods and services pricing us out of global markets.  This is very well understood overseas.  In a recent visit to Ireland, Neal Boortz, the co-author of two books on the FairTax, was told by an Irish gentleman that the Irish are scared to death that we will go to the FairTax.  He explained that their economic “miracle” came as a direct result of our crushing taxes on capital and labor.  Very simply, American companies relocated to Ireland because their tax code was much friendlier to business. 

Since 1998 I have advocated for the FairTax.  A simple bill--in fact, a mere 132 pages long--that will abolish all Federal income taxes, including personal, estate, gift, capital gains, alternative minimum, corporate, payroll, and self-employment taxes, and replace them with one simple, visible, personal consumption tax. The FairTax taxes what we take out of society rather than what we put into it. 

Every household will get cash distribution at the beginning of each month that will be based on the size of the household and will allow that household to buy its essentials untaxed.  Beyond that we are all voluntary taxpayers paying taxes when we choose as much as we choose by how we choose to spend. 

Our nation has coped with this tax code for 95 years and it has failed.  Our tax code has driven $2 trillion into the underground economy costing us about $50 billion in tax collections.  Our tax code has driven $12 trillion into offshore financial centers that should be parked in our markets and banks.   We are spending between $400 and $500 billion each year just complying with the code.  That is like paying for a dead horse.  We get nothing for that expenditure but a headache.

Getting rid of the IRS fixes everything.  Keeping it in place and nibbling around the edges of the current system fixes nothing.  As former Secretary of the Treasury told me, “You have just proposed the largest magnet for capital and jobs in history.”  Why wouldn’t we want the United States to be the outsource destination for jobs?  Why wouldn’t we want our nation to be the world’s safest and most stable tax haven?  The FairTax will give us these results as well as create an environment that will expand freedom. 

We have amassed millions of supporters across the country, all of whom are hungry for change.  That said, we have millions more to go and we need to grow this grassroots army.  I hope you will go to my website, www.johnlinder.com.  There you will find much more information on the bill, and you can join the fight by signing up to become a “Citizen Co-Sponsor” for the FairTax.  You can play an active role in bringing change to Washington.

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  • Leandra, Carole

    08/01/2008 11:27 AM

    It is obvious that the sitting Congress has dug in their heels and refusse to address any important legislation in this session. I suppose the Democrats feel they will gain the White House in November and then pursue their agenda in the 2009 session. However, I think they underestimate the American people. I am a strong supporter of the Fair Tax and other really good legislation. Thank you Congressman Linder for your pursuit of right. My congressmen support you as well.

  • conservative-and-proud.blogspot.com

    07/26/2008 01:17 AM

    Fair Tax is the best economic stimulus plan out there by far. Thanks Cong. Linder for all you have done and are doing for the Fair Tax. You used to be my Congressman before redistricting but I still support you and will continue to support you and the G7 - ya'll are GREAT ; )

    Elizabeth

  • Pridgeon, Daniel

    07/24/2008 07:26 PM

    And remember, INFLATION is caused by the gov't spending money it doesn't have, but borrowed from the FEDs. We pay it back once by inflation, and secondly, we must pay the FEDs back directly; plus interest. Originally, the FEDs get the money by having the U.S. Treasury print it for them (this is legal) and pays the small printing charge with the interest they charge us. This can all be avoided by simply having the U.S. Treasury print the money the gov't needs and letting them spend it. Of course this is inflationary! But there's no difference. And this way we only incur the inflation. And we go into it with eyes wide open about what we are doing. And we don't have to pay it back to anyone, except via inflation. I understand that Lincoln did this!
    No wonder the "National Debt" is so high. How much do we owe the FEDs?

  • spradley, robert

    07/24/2008 06:18 PM

    We need to really explain to the 50% of non direct taxpayers how they really pay imbedded taxes.

  • Johnson, Freda

    07/24/2008 03:36 PM

    My prayers are with you as you pursue what is right concerning our taxes. Thank you.

  • Hansen, John

    07/24/2008 01:59 PM

    I am so afraid that the FairTax will not be implemented that it depresses me. If we don't take care of this problem, America's best days are clearly behind her. While the FairTax may help me in the future, the people I truly worry about are my two sons (15 and 21) and their futures. Please keep the fight alive. Get McCain to take on this issue. Save our country before it's too late.

    Thanks for all you do Mr. Linder.

  • Pridgeon, Daniel

    07/24/2008 12:09 PM

    And remember, the Fair Tax provides a 22% disincentive for anyone thinking of coming to this country without a job.

  • Pennington, Marie

    07/24/2008 11:50 AM

    Thank you John for supporting and fighting for the fairtax. We are making progress, keep up the great work!!

  • Cosmez, Christine

    07/24/2008 10:49 AM

    It is so refreshing to hear others saying what you know is the truth. My husband and I agree 100% with your ideas for restructuring taxes. As white collar employees with gradutate degrees, we have lamented for many years how much less we are earning than our blue collar (non-degreed) parents did in the 1950's and 60's - due to both inflation and the horrendous amount of taxes we pay. I am praying that your plan will truly come to fruition. It will indeed change the face of our country for the better. May God bless you for what you are doing!

  • Glass, Tamara

    07/24/2008 09:13 AM

    GO FAIR TAX!! Not only does FairTax create untold wealth for all Americans. Talk about distribution of wealth. Fair Tax is the best way because everyone is on a level playing field.
    Another huge plus of this is that illegals are not paying taxes right now anyway. So, this is a great way for them to start paying taxes. Depending on what the tax rate on goods ends up being FairTax could begin a huge exodus of illegals who could no longer make it here. As illegals leave that opens up jobs for Americans. Thousands of jobs. If we had no illegals in our country there would be no reason for any American to be without a job. The issue would be getting Americans who are on welfare to take a real job and make it on their own. Back to FairTax we see the tax on goods being a flat rate. Somewhere between 17 and 20% . If it was 20% than 3% could go directly to debt reduction. The remaining 17% is what our country runs on. When it's gone it's gone. The government should have to live within a budget like the rest of us.

  • Slocum, Gordon

    07/24/2008 08:10 AM

    Thanks John and Mike,

    Keep on fighting for the fair tax. It is catching on and hopefully we will win this battle. Our nation is in desperate trouble on many fronts and this is such a curtail part of the package. Thanks and don't stop this is not just a good idea it is the right idea.

    Gordon Slocum
    Hartselle, Alabama

  • Whitney, Cliff

    07/24/2008 07:13 AM

    It is to bad that we do not have the support of John McCain on the Fair Tax.

    I am a small business who manfactures in China employing hundreds there and could move all of my operations to the USA if this was passed.

    I have sent repeated questions to Mr. McCains campaign requesting his formal stance on the fair Tax and I have received zero feedback or replies.

    This could be the one thing that would allow him to beat the devil in Nov. Without his support he will be beat and my business will be taxed out of existence.

  • Krecker, William

    07/24/2008 06:08 AM

    Thank you, Congressman Linder, for your selfless, patriotic courage in your tireless efforts to advance the Fair Tax Plan - because it would be GOOD for individual Americans and for America. Regrettably, there are few Statesmen left in Congress . . . you are undoubtedly one of them.

  • Repley, Ian

    07/24/2008 05:04 AM

    Gov. Huckabee's advocacy of the FairTax is the single most important policy position in this election. Research findings explain why:

    The FairTax rate of 23 percent on a total taxable consumption base of $11.244 trillion will generate $2.586 trillion dollars – $358 billion more than the taxes it replaces [BHKPT].

    The FairTax has the broadest base and the lowest rate of any single-rate tax reform plan [THBP].

    Real wages are 10.3 percent, 9.5 percent, and 9.2 percent higher in years 1, 10, and 25, respectively than would otherwise be the case [THBNP].

    The economy as measured by GDP is 2.4 percent higher in the first year and 11.3 percent higher by the 10th year than it would otherwise be [ALM].

    Consumption benefits [ALM]:

    • Disposable personal income is higher than if the current tax system remains in place: 1.7 percent in year 1, 8.7 percent in year 5, and 11.8 percent in year 10.

    • Consumption increases by 2.4 percent more in the first year, which grows to 11.7 percent more by the tenth year than it would be if the current system were to remain in place.

    • The increase in consumption is fueled by the 1.7 percent increase in disposable (after-tax) personal income that accompanies the rise in incomes from capital and labor once the FairTax is enacted.

    • By the 10th year, consumption increases by 11.7 percent over what it would be if the current tax system remained in place, and disposable income is up by 11.8 percent.

    Over time, the FairTax benefits all income groups. Of 42 household types (classified by income, marital status, age), all have lower average remaining lifetime tax rates under the FairTax than they would experience under the current tax system [KR].

    Implementing the FairTax at a 23 percent rate gives the poorest members of the generation born in 1990 a 13.5 percent improvement in economic well-being; their middle class and rich contemporaries experience a 5 percent and 2 percent improvement, respectively [JK].

    Based on standard measures of tax burden, the FairTax is more progressive than the individual income tax, payroll tax, and the corporate income tax [THBPN].

    Charitable giving increases by $2.1 billion (about 1 percent) in the first year over what it would be if the current system remained in place, by 2.4 percent in year 10, and by 5 percent in year 20 [THPDB].

    On average, states could cut their sales tax rates by more than half, or 3.2 percentage points from 5.4 to 2.2 percent, if they conformed their state sales tax bases to the FairTax base [TBJ].

    The FairTax provides the equivalent of a supercharged mortgage interest deduction, reducing the true cost of buying a home by 19 percent [WM].

    ALERT: Kotlikoff refutes Bruce Bartlett's shabby critiques of the FairTax.

  • God is with us

    07/24/2008 12:45 AM

    I am a strong supporter of the fair tax. Although I am going to be honest, I thought Mike Huckabee was the one who came up with the idea when I heard him first talk about it at the values voter debate last year. Looking at this idea, I know that all of our economic problems will be solved if we legalize the fairtax. I'll be the first to tell you that I hate the IRS with a deep passion. I cannot wait for the day when the fairtax becomes legal.

    For Christ I stand,

    David Crespo

  • Del & Leslie McMillan

    07/24/2008 12:24 AM

    Congressman Linder, thank you for your wise words today, and your sacrificial service to our country. Being a public servant is a high calling in the Lord's establishment of civil government, and we pray for His blessing and guidance in your life.

  • Damon, Josh

    07/23/2008 11:13 PM

    Baker, Mike

    Visit the fairtax web site, it will explain all those types of questions.

    In my personal opinion, the prebate (which is what you described) is basically there to make the democrats happy. It also tries to take the place of making exceptions for taxes on certain items that might be considered essential.

    The prebate wouldn't be hard however, as it would be no more difficult that the stimulus checks the government just sent out.

  • Lisa

    07/23/2008 10:38 PM

    Everyone go to www.fairtax.org and check the "Congressional Scorecard" to see if your Senators and Representative are sponsors of the FairTax. If not, write to them and ask them to co-sponsor the bill. And get all your friends, relatives, neighbors, co-workers, etc. to do the same. When enough Congressmen support the FairTax, then it will come up for a vote.

    And you can spread the word to people you don't know by displaying a bumper sticker; wearing a t-shirt; etc. And carry FairTax information with you to give to people who ask you about the FairTax. All of the materials you need to help you promote the FairTax are available at www.fairtax.org.

  • Rayborn, Linda

    07/23/2008 09:58 PM

    I am an avid supporter of the FAIR TAX and belong to my local FAIR TAX.ORG group. We are working hard to see that our state officials support the Fair Tax if they want to be re-elected. The people have to take the power and insist that our elected officials speak for us if they want to retain their positions in government. Kudos to Governor Huckabee for putting the Fair Tax out there on the front burner. He has done more to promote Fair Tax than anyone has done for it in the past 5 years!!

  • Baker, Mike

    07/23/2008 09:49 PM

    I think the Fairtax is absolutely the way we need to go. I just don't understand this quote from the post:

    "Every household will get cash distribution at the beginning of each month that will be based on the size of the household and will allow that household to buy its essentials untaxed."

    Why would we do this and won't it cost a fortune to administer?

  • Warlick, Michael

    07/23/2008 08:23 PM

    I would like to thank Congressman John Linder for his dedication to give the American people and my grandchildren a better way to pay their taxes, but as he has pointed out, FairTax is much, much more than a better way to pay our Federal Taxes, it can be the only hope for our economy, our jobs, our way of life. There is no American, of ether party, free of any hidden agenda, that can not support this bill once they understand the bill and have their questions answered. Please read both the FairTax Book and then FairTax The Truth. Please join Congressman Linder at his web site and join FairTax.org

  • Downing, Dan

    07/23/2008 07:42 PM

    Rep. Linder -

    I have shared my copy of "Fair Tax: The Truth (Answering the Critics)" with a number of friends and business associates. The plan's elegance is it's simplicity - it just plain makes sense to everyone who looks at it objectively. What I hear from most people is that they lack faith that Congress will ever take it seriously due to the deep entrenchment of the 'income tax lobby'. What can we average folks do to help?

  • E. Phil

    07/23/2008 07:42 PM

    I'm going to buy your book! I want to learn more so I can be informed and able to help get this into Law. Thanks for your support of Huck! and America.

  • Mike B

    07/23/2008 07:37 PM

    I am a big FairTax supporter and have been for many years. Ever since Gov Huckabee's campaign I have vowed to only send contributions to candidates who actively support the FairTax. I have convinced most of my family and friends to do the same. There are other very important issues that I look for in an elected official, but the FairTax is a deal closer for many of us.

  • Nunn, Stephen

    07/23/2008 07:04 PM

    The Fair tax is a great beginning plan. However, for one to think this plan will ever get the attention of the politicians currently in power at this stage to go along with it is another story. The plan has been in progress since 1998. It is now 2008. We as families have fallen further behind than ever before. Another decade of waiting is not going to help our children or our country. If we have to wait to vote those in favor (more politicians) of this plan into the position of becoming a reality we are all doomed. The time to act is now. It is essential that shutting down the IRS and implementing this beginners plan takes precedent above all else. Shut down the IRS immediately and the economy begins to instantly bloom. Bypass the House, The Senate and Congress and bring the vote directly to the American Public Now!

  • Trimble, Ray

    07/23/2008 05:58 PM

    Enjoyed your talk at the Training Meeting in Loganville on July 12th. We are working hard to promote FairTax and will continue until we make it law. Thanks for all your efforts!

  • Skinner, James

    07/23/2008 05:50 PM

    The only way to get the Fair Tax in place is to (1)Learn what it is (and isn't). You do this by reading books on the subject. The best to read is Fair Tax: The Truth (Answering the Critics) by Neal Boortz and Congressman John Linder.
    (2) Wrie your Congressman and find out where he stands on Fair Tax. Time is past due to interact with our representatives in Congress. They are politicians. Some are good, some are selfish and thinking only of themselves. Prove to yourself which ones fit this classification.
    (3) Communicate with friends and family. You must know your subject first, however. If you don't devote time and efffort to understanding the subject of Fair Tax, you are a phony. Sorry, I don't know any other way to say it. JS

  • SharonNC

    07/23/2008 05:29 PM

    The first time Mike Huckabee got my attention was an interview where he was discussing Fair Tax. When I learned about all his other plans for our country, I was hooked.

  • Nunn, Stephen

    07/23/2008 05:16 PM

    I applaud The Fair Tax. It is a start. Abolosh the IRS! However, A fair tax should be on every item and should apply to everyone. Different tax rates for different items. The power to purchase each and every item would still be in the hands of the individual consumer. There should be a tiered tax structure for all goods. Also, if certain items are more readily available in large supply the tax should be adjusted either higher or lower. As for who should set the tax rates, the general public, not the government. Drastic change is needed. Goverment voting precincts should be established and the general public should have access to electronic voting in real time, don't say it can't be done, electronic IRS filing is done securely. Look, I know this sounds far reaching but it is time for drastic change. The publicly funded government would still be raking in money hand over fist. The lobbyist would virtually be put out of business overnight. The politician would have less opportunity to have his pants lined with OUR money. We could institute a new pay structure for politicians right down to how much they are compensated and what benefits they receive, as well as limited terms. Again, this could be voted for on a widescale electronic real time computer network. as far as todays economic teachings go, throw it out the window! It doesn't work. They are teaching old school when in reality it is time for new methods and new opportunities. America and her people could prosper once again.

  • Franco, Tom

    07/23/2008 05:07 PM

    I am all for this Flat tax - consumption tax.
    In layman's terms, how does it affect a consumption society. What will transpire
    Lay it out for those that are reluctant to change and show them in simple term how we get from
    where we are to a better life.
    It is not as simple as just switching over....
    UK has both consumption (VAT)and income tax. How has that
    worked for their economy? Why will Fair Tax be
    different or the same.

    The closer you get to nailing these answers, the better the chance of making this happen.

    Go FairTax , Goooooooooooo!

  • Brian "BDBopper" Donegan

    07/23/2008 04:49 PM

    Rep Linder,

    thank you for fighting for this very worthwhile cause and thank you for being one of only a handful of principled elected officials to stand by Mike Huckabee's side. I am very proud to be represented in Washington by you. Keep up the great work!

  • Jill 4 America

    07/23/2008 04:42 PM

    Rep. John Linder,

    Sounds like a winner to me! Hope this will become a reality soon. When you need one more nail, nailed into the door of the IRS let me know will you? But we can all begin with the nailing by sharing the word. Thanks so much for all of your time and effort.

    Sincerely,
    Jill Anderson

  • Bishop, Randy

    07/23/2008 04:41 PM

    Great Blog and information!!!

    What is the current status of HR 25 and
    what is the sister bill in the Senate (#) and
    it's status?

    What do we need to do to get the "Fair Tax"
    voted on in both houses of Congress?

    What do we need to do?

    Trucker Randy

  • Burgener, Paul

    07/23/2008 04:22 PM

    Folks- Get involved. Join the Yahoo group for your state and participate in local FairTax events. Mine is at groups.yahoo.com/group/VAFairTax
    Lets get this done within our generation!

  • Lisa

    07/23/2008 04:16 PM

    Congressman Linder:
    Thank you for working so hard to help pass the FairTax. I enjoyed hearing you speak at the FairTax workshop in Loganville earlier this month.

  • Derstiine, Willis & Susie

    07/23/2008 03:32 PM

    Drill wherever you can find it.
    Allow school vouchers. Promote home schools, charter and christian schools.
    We love your flat tax.

  • Huckabee, 4 President

    07/23/2008 03:23 PM

    Great article on the FairTax.

    This is another way to increase our individual freedom. We will not be taxed on our basic necessities because of the prebate check that every household will receive. Once we purchase our necessities, we can then CHOOSE how much we want to pay in taxes based on how much we buy. With the current tax system, the government forcefully takes money from us. With the FairTax we have more control and freedom over the money we have worked so hard to earn.

    FAIRTAX - Another great idea from Mike Huckabee and Rep. John Linder.

    By the way, I did not see anything about the life issue on your web site. If you are pro-life, I suggest you add something about it on your site since it is such an important issue to many of us here at HuckPac.

  • John Pettigrew

    07/23/2008 03:08 PM

    Congressman Linder,

    Thank you for your unending efforts with the Fair Tax. I am on board and try to convince all that I can of the Fair Tax. Please don't stop. I fear the day when tax payers become the minority in this country. Keep up your efforts.

  • Joseph

    07/23/2008 03:02 PM

    I do not understand what the hold up is with implementing the FairTax. Seems like a no-brainer to me.