Fair Tax Nation

Replace All Federal Taxes on Income with the Fair Tax Act , HR 25


Members in both the House and Senate have plans to re-introduce FairTax legislation in the next Congress.

First introduced in Congress in 1999 by Georgia Republican Rep. John Linder, who is retiring at the end of the current Congress, the FairTax is a proposal to scrap all federal income and payroll taxes and replace them with a progressive tax on retail consumption. The proposal would also provide to all American citizens, regardless of income,

“a monthly universal prebate to ensure that each family unit can consume tax free at or beyond the poverty level, with the overall effect of making the FairTax progressive in application.”

Linder has been a varitable Fair Tax crusader for well over a decad...

“I am particularly proud of Rob Woodall who helped write the [FairT...

And Woodall has embraced the call. He will be introducing the FairT...

“For me the FairTax has never been a tax bill. It has been a freedo... America how much we argue about the edges and how little time we spend arguing about the underlying problem.”

Woodall is adamant that he will make a difference in the tax code eventually. For although the FairTax has more co-sponsors in both the House and Senate than any other piece of fundamental tax reform, Woodall told TheDC that change will be practically impossible without presidential leadership.

“My job over the next 12 months is to make sure the FairTax is in the mix for all those conversations, so that we have done everything we need to make sure the FairTax is at the top of everybody’s list,” Woodall said. “I know that we need a presidential leader to do anything that is this big.”

Woodall believes that the next presidential election will see more candidates running on a FairTax platform — as former Alaska Democratic Sen. Mike Gravel and former Arkansas Republican Gov. Mike Huckabee did in 2008.

Georgia Republican Sen. Saxby Chambliss will have a companion bill on the Senate side next year as well. Chambliss likewise has spent years pushing for the FairTax.



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Will there be any changes to the language of the FairTax Bill in 2011?


HR-25 of 2009 added one new section known as the FairTax sunset clause.  This resolved one of the questions as to could the FairTax be put in place without the repeal of the 16th amendment.




You have been very vocal on your beliefs in what should be changed in HR-25.  That was not my question. 


My question is simply if the introduction of the FairTax Bill "that is being introduced in Jan 2011" will have any changes to the prior bill?

I believe Hank wants to be the one to write the bill. He should make an appointment with Rob Woodall to bring up these ideas.  I agree with some of his points but I just want to see the bill get passed. To try and change so much at this point would put it off even further. HR25 is so much better than what we have now as it is. Let's just work on getting it passed.


I've wondered about taxing government. However, I realize it currently pays the embedded taxes under the current system. The prebate may be a problem since the wealthy clearly don't need it. Of course they may not apply for it. I've considered that the prebate could be the "smart card" that is pin based and only removes the tax rather than give an income.




I have been told there is one minor change to date for the next session. The prebate where it says a child over the age of 2 needs a Social Security card will be changed. Now children get a SS card almost at birth so the provision is no longer needed. I have also been told the bill is under further review. I will pass along anymore information if and when it becomes available.

I see three areas that would need to be changed to make FT viable.  There should be a real solution on collection, compliance and audit utilizing 21st century technology where States can piggyback on the FT without any cost and pick up Internet sales.  Along with the state not paying FT, this would go a long ways in resolving a major roadblock that does not even effect the FT assumptions.

The second item that would have to be changed is the government giving FT rebates based on insurance claims.  It is ill concieved.

The third item is how eliminating the tax preference on employer paid health care expenses will get any support.  This alone will cause health insurance costs raise 65% to over 100% to the end consumer.

Here's some changes I'd make.


You are only eligible for the rebate if your income is below 250,000. There are problems with that however, since not everyone reports their income.


include the repeal of section D, E, and F of the internal revenue code. This includes the alcohol, tobacco, gasoline, taxes and other random taxes like 911 fee and other embedded taxes.


Remove the provision to tax the state government.


Re-calculate the rate to be revenue neautral. The current income to the government is less than it was when it was originally calculated.

I was thinking more like $150,000. When folks apply for food stamps (ebt card) they have to show a check stub or other proof of income. The  prebate could be the same since it does have to be applied for. Those that do need it will but that's one reason I feel most people in the upper income levels won't bother.

The problem with the Prebate is that it would become a large entitlement program.  If you choose $250K, then you only eliminate 2% of the prebate, not enough to make a rate change difference.  I think you have to eliminate at least 50% or even 75% to lower the rate and it not being a large entitlement program.  I agree that there are other programs that could be used to administer the prebate.


One thing that I always thought made sense would be to tax the income of the upper 2% of folks. Let say those making over $250K.  You eliminate 98% of all tax returns by giving a standard deduction of $250K, there is no need to file.  You could flatten the tax rates to 10% for first $750K, 15% for next $4M, 20% after $5M.  This change alone would significantly reduce the FT rate and provide the upper income a significant tax  holiday and the FT becomes more progressive.

If removing the Prebate from the top two % would not make a difference in the overall rate, why do it at all?  The idea of the FairTax is that there are no exemptions! Leave the FairTax as written.  All this does is try to keep the class warfare in place, which the FairTax eliminates.  Also, without having to report income for the income tax system, where would you measure who these people are?


The odds are that the top 2% of the people will not worry about the Prebate and not submit their forms anyway.

> Carefull here, Chiefcook is right, your getting back into the class envy tax income mode. There are people making $250,000 who are treading water or sinking. Wealth is what is able to be spent, and that is what the FairTax taxes.

I agree with the Chiefcook. If you start making exceptions or taxing the upper 2% then you take away the core meaning of the Bill, and that is the concept of being "FAIR". Whether that 2% needs a prebate or not is irrelevant to the overall purpose and goal. It should still be available to them. If you start sectioning off groups of people, you will just create a different kind of warfare. Who gave us, or anybody, the authority to predetermine someone elses need? We have no idea what another has to deal with on a daily basis, much less, what they will need tomorrow or next year.


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