Transitioning from Income Tax to FairTax

What will tax season be like for the average Joe or Jolene? Well, to begin with April 15 will be just another beautiful Spring day. There will be no income tax filing, so there will be no tax preparation. There will be no need to keep all your receipts. You’ll never again have to ask, “How many years do I have to keep all this stuff?” Your accountant will be able to actually earn his fees by helping you manage your money, rather than by doing your taxes. In short, there will be no tax season.

The transition from an income tax to the FairTax, for the average consumer, will hardly be noticed. The collection of the tax revenue lies with the retail and service businesses, and most of the infrastructure is already in place for collecting sales taxes. The prices of goods and services will remain about the same, and in some cases may even decline as embedded taxes are removed from the manufacturing, transportation and supply processes.

Every year we lose billions of dollars in productivity just in the time it takes us to prepare and file our tax returns. This is an immediate benefit of implementing the FairTax. Will it be easy to get it done? No. Is it worth it? Absolutely.

Reliable Source of Tax Revenue – Consumption vs Income

One question that first concerned me about the FairTax was what happens when people reduce their spending? Since the FairTax is collected on retail sales and services would it generate enough revenue to keep the federal government running when people cut back on their spending during tougher economic times? What I learned in educating myself regarding the FairTax is that spending is actually a more reliable source of revenue for the federal government than is income.

During good economic times lots of people have jobs and everyone spends. But, when times get tough fewer people have jobs. Those who lose their job or are downsized pay less or no income taxes. However, everyone still spends even if they are spending less. And, by collecting the tax at the point of retail sales and service those visiting the U.S. from other countries are contributing to its tax base.

Our Country is in the midst of some pretty turbulent economic times, and the answer from many in Washington is simply to raise income taxes on U.S. citizens. But, imagine what would happen if every visitor to our Country were also paying taxes, every undocumented worker were paying taxes, every person in underground economies was paying taxes with each purchase. The FairTax is not about reducing tax revenue, or even reducing taxes. It’s about spreading the tax base fairly and evenly, and making our tax system transparent and responsible.

The common refrain for several years has been, “It’s a good idea, but it will never happen.” The FairTax is a good idea, and it’s an idea whose time has come. Please investigate the idea of the FairTax. If it makes sense to you, educate yourself on the legislative bill, H.R. 25. And finally, take steps to help effectuate its passage into law. It can happen; it will happen, but will it happen in time to arrest the crumbling of our republic?

How much will the FairTax be?

So, just how much will the FairTax be? The estimated percentage rate of the FairTax is 23% as an inclusive tax, and 30% as an exclusive tax. What’s the difference, you ask? That’s a very good question, and one that I think our good friend Denis Calabrese can answer better than I. Please give a listen to the short video below and it will all become clear.

Woodall Re-Introduces Fairtax Bill

On day one of the 112th Congress of these United States Congressman Rob Woodall (GA-07) re-introduced H.R. 25, the bill better known as the FairTax. Remarkably, the bill was introduced with a record number of co-sponsors. Below is a press release announcing the re-introduction of the bill and a list of its current co-sponsors. If your CongressPerson is not on the list please contact them and ask them why. The FairTax plan is definitely our best shot and possibly our last chance to actually turn our economy around. Links to contact your elected representative are below:

Use this link to easily find your congressman’s phone number ->
http://bit.ly/contactcongr

or

Use this link to send them a quick email. ->
http://bit.ly/ftcongress

WOODALL INTRODUCES FAIRTAX BILL ON DAY ONE WITH RECORD NUMBER OF ORIGINAL CO-SPONSORS
Press Release | Jan. 5, 2011 | U. S. Rep Rob Woodall

Posted on Thursday, January 06, 2011 5:52:22 AM by phil_will1

Washington, DC—On Wednesday, January 5, 2011, Congressman Rob Woodall (GA-07) introduced H.R. 25, the FairTax. The FairTax legislation eliminates the current income tax paradigm and replaces it with a system of taxation based on consumption. The bill was introduced on Wednesday with 47 original co-sponsors—the most original co-sponsors the bill has ever had for its initial introduction.

“I committed to the Seventh District of Georgia that my efforts in Congress would focus on reclaiming freedom for the American people. It is for that reason that I am proud to make the FairTax—the only bill that restores transparency and simplicity to our tax code—my very first action in Congress. I have said since its inception that the FairTax is not a tax bill; it is a freedom bill,” Woodall said.

Woodall, who was sworn-in to Congress earlier in the day, played an integral role in crafting the original text of the FairTax as former Congressman John Linder’s Chief of Staff when the bill was originally introduced in 1999.

“Our current tax system is a bloated, convoluted mess that gives government power over Americans’ pockets. With 47 Members of Congress and counting signing their names to the FairTax, we are closer than ever before to voting on legislation that eliminates the frustrating mess that is the IRS.”

Although the FairTax was introduced with 47 original co-sponsors, Woodall anticipates adding many more Members of Congress to the bill. Once the FairTax is introduced with the original co-sponsors, Members are able to sign on to the bill as co-sponsors throughout the 112th Congress.

“The number of signatures on the FairTax this time around is a testament to the will of the people. It is clear that Americans do not want to have their hard-earned money taken away and they want to reclaim the freedom to spend their money how they choose and when they choose.”

The list of original co-sponsors is as follows:

1) Tom Price (GA)

2) Brian Bilbray (CA)

3 ) John Carter (TX)

4 ) Michael Conaway (TX)

5 ) John Duncan (TN)

6) Virginia Foxx (NC)

7) Steve King (IA)

8 ) Michael McCaul (TX)

9) Pete Olson (TX)

10 ) John Sullivan (OK)

11 ) Mac Thornberry (TX)

12) Phil Gingrey (GA)

13) Roscoe Bartlett (MD)

14) Don Young (AK)

15) Ander Crenshaw (FL)

16) Todd Akin (MO)

17) Lynn Westmoreland (GA)

18) Tom Graves (GA)

19) Gus Bilirakis (FL)

20) Ted Poe (TX)

21) Randy Neugebauer (TX)

22) Jeff Miller (FL)

23) Robert Wittman (VA)

24) Jack Kingston (GA)

25) Marlin Stutzman (IN)

26) Jeff Flake (AZ)

27) Billy Long (MO)

28) Cliff Stearns (FL)

29) Tim Walberg (MI)

30) Dennis Ross (FL)

31) Dan Boren (OK)

32) Mo Brooks (AL)

33) Darrell Issa (CA)

34) Richard Nugent (FL)

35) Tim Scott (SC)

36) Blake Farenthold (TX)

37) Jeff Duncan (SC)

38) Rob Bishop (UT)

39) Mike Pence (IN)

40) Sandy Adams (FL)

41) John Mica (FL)

42) Sue Wilkins Myrick (NC)

43) Dan Burton (IN)

44) John Culberson (TX)

45) James Lankford (OK)

46) Mike Pompeo (KS)

47) Gary Miller (CA)
###
— Jennifer Drogus Communications Director Congressman-elect Rob Woodall
Seventh District of Georgia 202.225.4272 | jennifer.drogus@mail.house.gov

The FairTax may very well be the most important legislation of our time, but it will only become law through the persistent insistence of the people of this country. It’s not good politics, but it is good for the American people. Contact your representatives today insist they do what’s right for our Country! Here are those links again:

Use this link to easily find your congressman’s phone number ->  http://bit.ly/contactcongr

or

Use this link to send them a quick email. ->    http://bit.ly/ftcongress

Exemptions and Exclusions under the FairTax

What’s going to keep tax exemptions and exclusions from undermining the FairTax system?

That’s a fair question. The goal of the FairTax system is to tax everyone fairly. The same tax will apply to everyone and the few exemptions and exclusions that are written into the bill will apply to everyone, as well. Because of this transparency any attempt to tinker with the tax code will also effect everyone. Lawmakers will no longer be able to use the tax code to divide and conquer the people of this country by excluding or exempting certain groups from paying certain taxes, or heaping additional taxes onto specific groups. Because the tax is collected at the retail level at the point of consumption it applies across the board and the power to manipulate the code, and thus the people, simply goes away. Will it be possible for politicians to tinker with the FairTax? Only if we, as a people, let them.