FairTax Overview
The FairTax: Good for taxpayers, good for businesses, good for the economy84
The national debate over taxation is shifting from the question of whether to alter our current tax system
to the question of how to alter it. Today, polls indicate that a large majority of Americans are extremely
frustrated with the current federal income tax system. The income tax discourages personal savings and
investments by taxing capital gains, dividends, and interest earned. Wage earners struggle under the
burden of a very regressive payroll tax. The income tax is complex – so complex that no one, not even
the experts, truly understands it. Moreover, for the tax to be enforced, the taxpayer must sacrifice
significant privacy. As a result, our citizens are governed by needlessly burdensome tax laws that they
cannot understand and that are intrusive, complex, costly, and often invisible.
The tremendous undertaking of replacing the income tax requires the American people to put
aside partisan politics to arrive at a consensus on how our government should tax its citizens. Any new
system of taxation must fairly and efficiently distribute the burden of funding our government, promote
economic growth, present less of a compliance burden, and offer every American better economic
opportunity.
Americans for Fair Taxation® (FairTax.org), a non-profit, non-partisan organization, believes
that replacing the current tax system with a single rate, federal sales tax levied on all new goods and
services with no exceptions or exclusions, best meets this challenge. Research has shown that the
FairTax is a fair and progressive system of taxation that increases economic growth, investment, capital
formation, and the creation of jobs and savings.85
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First published as “A Single Rate, Federal Sales Tax is the Best” in Tax Reform, Opposing Viewpoint Series, Greenhaven
Press, 2011, pages 157-166.
85
Kotlikoff, Laurence J. and Sabine Jokisch, “Simulating the Dynamic Macroeconomic and
Microeconomic Effects of the FairTax,” National Tax Journal, June 2007; David G. Tuerck, et.al., “The
Economic Effects of the FairTax: Results from the Beacon Hill Institute CGE Model,” The Beacon Hill
Institute at Suffolk University, February 2007; Arduin, Laffer & Moore Econometrics, A
Macroeconomic Analysis of the FairTax Proposal, June, 2006; David G. Tuerck, Jonathan Haughton,
Paul Bachman, and Alfonso Sanchez-Penalver, “A Comparison of the FairTax Base and Rate with Other
National Tax Reform Proposals,” The Beacon Hill Institute at Suffolk University, February, 2007;
Laurence J. Kotlikoff, and David G. Tuerck, et. al., “Taxing Sales under the FairTax: What Rate
Works?, Tax Notes, November 13, 2006. These papers are available at
www.fairtax.org/AboutTheFairTax/ResearchPapers.
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