Georgia for FairTax | Free eBook Sep. 2014 | Page 10

FairTax Overview Fiscal Impact: The estimated number of households for 2011 is 114.8 million. Assuming 100 percent participation by all eligible households, the maximum cost of the prebate would be $543 billion. For comparative purposes, this amount is less than one-half of the amount of tax expenditures (standard deductions, personal exemptions, Earned Income Tax Credit, mortgage interest and charitable contribution deductions, and various other tax preferences) doled out under the current federal income tax system that are repealed when the FairTax is enacted. For 2012, the total of all of these tax breaks is estimated to be $1.25 trillion. 2 What is the FairTax Plan? The FairTax Plan is a comprehensive proposal that replaces all federal income and payroll based taxes with an integrated approach including a progressive national retail sales tax, a prebate to ensure no American pays federal taxes on spending up to the poverty level, dollar-for-dollar federal revenue replacement, and, through companion legislation, the repeal of the 16th Amendment. This nonpartisan legislation (HR 25 / S 122) abolishes all federal personal and corporate income taxes, gift, estate, capital gains, alternative minimum, Social Security, Medicare, and self-employment taxes and replaces them with one simple, visible, federal retail sales tax – administered primarily by existing state sales tax authorities. The IRS is disbanded and defunded. The FairTax taxes us only on what we choose to spend on new goods or services, not on what we earn. The FairTax is a fair, efficient, transparent, and intelligent solution to the frustration and inequity of our current tax system. What is Americans for Fair Taxation® (FairTax.org)? FairTax.org is a nonprofit, nonpartisan, grassroots organization solely dedicated to replacing the current tax system. The organization has hundreds of thousands of members and volunteers nationwide. Its plan supports sound economic research, education of citizens and community leaders, and grassroots mobilization efforts. For more information visit the Web page: www.FairTax.org or call 1-800-FAIRTAX. Authored by Karen Walby, Ph.D., Chief Economist, Americans For Fair Taxation, 2007. Updated April, 2013. (AFFT Documents\Papers on a specific subject\explanation of prebate) 2 Donald B. Marron, How Large are Tax Expenditures?, Tax Policy Center as published in Tax Notes, March 28, 2011. Page 10 of 4