"A person with the facts is never at the mercy of someone
with just an opinion." - Unknown
Feature Article: Winning the Debate
As FairTax supporters, we come across a lot of questions
when we tell Americans about the transformation the FairTax would bring to our
Objections vary from person to
person but we want to highlight some short answers and have included more
detailed research to reassure any skeptic.
Also, all FairTaxers should also save this very thorough paper, "The FairTax: Fundamentals and Facts" that answers common technical questions.
“My FairTax rate
would be too high.”
Under the FairTax you can control your tax rate! The prebate makes basic necessities tax
free and used good never are taxed. You only pay taxes when you choose to purchase
new goods and services. If you spend double the poverty line, your FairTax rate
is only half of 23%! See more examples here.
Most Americans are in a 15% tax bracket and pay another 7.65% in payroll taxes
which is about 23% already. But we spend about $400 billion dollars more every
year just figuring out how much to send to Washington!
Compare your rate at FairTax.org/Calculator
“The IRS still has to
exist under the FairTax”
Under the FairTax, unlike a flat income tax, the IRS is
eliminated both symbolically and literally. The FairTax defunds the IRS
and orders records to be destroyed.
The states, most of which have had
more than 60 years of experience in the administration of the sales tax, will
collect and enforce the FairTax. Today,
98% of the population is covered by state or local sales taxes.
Details in Title
III, Section 301 of the FairTax, HR 25
can’t fully fund our government”
The FairTax has been very thoroughly researched to provide
all the revenues collected by the taxes it eliminates. It also funds the
prebate, collection fees for retailers and state sales tax organizations.
Other reports are largely based on the 2005
Panel on Tax Reform and subsequent FactCheck.org
misanalysis which declared the rate would have to be much higher. The catch is,
they quietly devised their own national consumption tax which they loaded with
the exemptions and deductions they felt were politically realistic.
Finally, it’s important to note that the FairTax is “revenue
neutral.” Like our current tax code, it’s not calculated to be ‘spending
published, detailed research at FairTax.org/Rate
"The FairTax is
not politically possible"
It’s true that great public policy changes do not happen
easily. We believe, however, in the promise of the Founding Fathers that this
is a nation, "of, by and for the people". But we have seen Congressional
co-sponsors come on board faster than ever before; as more and more Americans
have come to understand the powerful benefits the FairTax offers the nation. We’re
closer to victory every time Americans from the left, right and center force another
Congressman to co-sponsor the FairTax legislation.
As our ranks grow, such pressure will increase on members of
Congress and at some point, the voice of the people will eclipse the voices of
the relatively small number of Washingtonians who profit from the income tax
system at great cost to our nation.
"Low and middle income people will pay more"
The FairTax actually eliminates and
reimburses all federal taxes up to the poverty line for all Americans. This is
accomplished through the prebate
and by eliminating the highly regressive FICA payroll tax. Today, low and
moderate income Americans pay far more in payroll taxes than income taxes.
Those spending at twice the poverty level pay a FairTax of only 11.5 percent -
a rate much lower than the income and payroll tax burden they bear today.
Also, under the federal income tax,
slow economic growth and recessions have a disproportionately adverse impact on
lower-income families. Breadwinners in these families are more likely to lose
their jobs, are less likely to have the resources to weather bad economic
times, and are more in need of the initial employment opportunities that a
dynamic, growing economy provides.
In a nutshell, research thoroughly documents that the rich
who spend the most will pay more but low, moderate and middle income taxpayers
will benefit from the greatest gains in reduced tax liabilities.
See specifics at FairTax.org/Distribution
can raise the FairTax rate”
Yes, Congress can raise the FairTax rate just as it can and
does raise the income tax rate. However, the FairTax is highly visible. And
because there is only one tax rate, it will be very hard for Congress to adopt
the typical divide-and-conquer, hide-and-disguise strategy employed today to
manipulate the income tax code.
“The 23% rate is
misleading. It's actually 30%"
We choose to compare the FairTax
to income and payroll taxes, quoting the rate the same way, because the FairTax
replaces such taxes. That rate is 23 percent.
Sales taxes, on the other hand, are generally quoted tax exclusive: “I
bought a $77 shirt and had to pay that same $23 in sales tax." This is a
30% sales tax. Or, “I spent a dollar, 77¢ for the product and 23¢ in tax.” This
rate, when programmed into a point-of-purchase terminal, is 30%.
Note that no matter which way it is quoted, the amount of tax is the same.
Under an income tax rate of 23 percent, you have to earn $130 to spend $100.
Read more: A
23% tomato or a 30% tomato?
not enforceable and there will be evasion"
There always will be evasion and today’s incomprehensible system
does nurture our underground economy. But the FairTax minimizes confusion and reduces
compliance points by eliminating over 80% of tax returns – every individual
Also, 80% of all retail sales now occur at large retail
chains that won’t aid tax cheats. This leaves state sales tax organizations –
with decades of experience – an even smaller area to focus on.
detailed research at FairTax.org/Compliance