FairTax Overview
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When charities provide products or services to individuals for compensation, essentially a retail
transaction, that transaction is taxed. This is comparable to the current system not allowing the
deduction of that portion of a gift for which the donor received some return compensation.
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 (HR25/S13) 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.
Karen Walby, Ph.D., Chief Economist, Americans For Fair Taxation, 2007. Updated February, 2013.
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