The Fair Tax

My earlier post on the Nebraska school house got me thinking about the Fair Tax. Wasn't hard to do, as getting the Fair Tax passed is one of my passions right now.

I have a cold and I just don't have it in me to post as I would like to. My energy is almost gone, but here is a brief summary of the Fair Tax from Representative John Linder's Congressional site. More information here.

The FairTax Act:

• Repeals all corporate and individual income taxes, payroll taxes, self-employment taxes, capital gains taxes, estate taxes and gift taxes.
• Imposes a revenue-neutral personal consumption tax on all new goods and services at the point of final purchase. Business-to-business transactions and used products (which have already been taxed) are not subject to the sales tax.
• Rebates the sales tax on all spending up to the poverty level.

Results of the FairTax:

• Dramatically reduce the costs of goods and services by 20 to 30 percent.
• Allows you to keep 100 percent of your paycheck, pension, and Social Security payments.
• Gross Domestic Product will increase by almost 10.5 percent in the first year after enactment.
• Compliance costs would decrease by 90 percent.
• Real investment would initially increase by 76 percent relative to the investment that would be made under present law. While this increase would gradually decline, it remains 15 percent higher than under the existing tax structure.
• Exports would increase by 26 percent initially and would remain more than 13 percent above the level under the current tax system.
• Real wages will increase.
• Increases incentives to work by as much as 20 percent in many households, leading to higher economic growth and efficiency.
• Interest rates will fall 25 to 35 percent.

Representative John Linder of Georgia is the primary sponsor of HR25. You can access his site here, and the Fair Tax site here. Sunnye at The Sunnyeside has blogged about it here.