Video Transcript
What Is the FairTax?
The FairTax is a tax replacement plan where we take all the federal income taxes, including corporate, personal, gift, and estate taxes, and replace them with one national consumption tax on new purchases above the poverty level.
Only this form of consumption tax comes with no exceptions and is progressive, not regressive. The poor are not paying more, and the rich are not paying less.
Why the FairTax Is Progressive
What makes the FairTax progressive is that all Americans are untaxed up to the poverty level via the rebate. Much like your standard tax deduction, this ensures that basic living expenses are not taxed.
The taxes are collected by retail businesses at the state level, making the system more accountable. The IRS is done away with, and you have control over your money and over the overall tax rate your household pays.
Revenue Neutral and Fair by Design
The FairTax is revenue neutral, meaning the government receives the same amount of money as it does now. It is fair because you decide what’s fair — not them.
The FairTax does not hurt the poor and does not reward the rich because it is not a straight sales tax like the sales tax we already have.
A Level Playing Field for Everyone
The FairTax creates a level playing field by taxing everyone at the same rate at the cash register, while households remain untaxed up to the poverty level.
This means that those living closer to the poverty level pay a lower overall tax rate, while those living a more lavish lifestyle pay a higher overall tax rate. Yet the law still applies to everyone equally.
Understanding the Prebate
This is called the prebate, which reimburses every legal American household for the taxes they will have to pay on basic necessities each month.
As basic necessities vary by household, the FairTax untaxes you — not your purchases. This keeps tax lobbyists out of the picture and keeps you in control of what you pay.
Addressing Cost Concerns
Do you think the prebate will be too expensive and act just like a huge welfare program?
The rebate will cost less than half of what current deductions and exemptions cost and operate. Just like the standard deduction you already take, it is your money — you’re just getting it back each month rather than once a year.
You Control Your Tax Rate
Everyone under the FairTax controls their own tax rate by deciding when and how much money they spend above the poverty level, and thus how much they pay in taxes.
Learn More
To learn more, please visit fairtax.org, and be sure to like us on social media to help educate your friends and spread the word.