Video Transcript
Introduction
The FairTax replaces all federal income taxes and payroll taxes with one national sales tax on new goods and services.
That means no more federal income tax, no more payroll tax, no more corporate income tax, no more gift tax, and no more estate tax.
What Changes Under the FairTax
Under the FairTax, you only pay taxes when you choose to spend money on new goods or services.
If you don’t spend, you don’t pay. There are no taxes on used goods because those items were taxed when they were first purchased new.
Eliminating the IRS
The FairTax eliminates the need for the Internal Revenue Service. The taxes are collected at the retail level by businesses, much like state sales taxes today.
This dramatically reduces compliance costs and simplifies the system.
The Prebate
Every legal household receives a monthly prebate that reimburses them for the taxes paid on basic necessities up to the poverty level.
This makes the FairTax progressive and ensures that no American pays federal tax on essential spending.
Economic Impact
By removing embedded income and payroll taxes from production costs, prices are expected to stabilize and American goods become more competitive globally.
Workers receive their full paycheck without federal withholding, increasing transparency and personal control.
Conclusion
The FairTax is designed to be simple, transparent, and fair. It shifts taxation from income to consumption, giving Americans control over how much federal tax they pay.