BEYOND THE BASICS

Although a national consumption tax is simple, fair, and transparent, it is recognizably a dramatic shift from our current taxation system.  The economic impact has been researched and debated at length with the resulting studies being presented primarily within two sections:  Beyond the Basics and Research & Bill.  In Beyond the Basics, we present an in-depth view of the FairTax, the background of the current tax code, and the economic arguments that support the FairTax initiative.

Historical View of Taxation
Alexander Hamilton, our nation's first Secretary of the Treasury shares his thoughts on taxation (excerpt from the Federalist Papers, Federalist No. 21).

Plain English Summary of the FairTax Act (PDF)
This document is a summary of the Fair Tax Act of 2007 (HR 25/S 1025), written in plain language.

Testimony submitted by FairTax.org to the President's Advisory Panel on Federal Tax Reform (PDF)
Our Chairman, Leo Linbeck, explains to the Tax Panel how the FairTax meets the President’s principles of tax reform: simplicity, fairness and pro-growth.

Taxing Sales Under the FairTax: What Rate Works? (PDF)
The results are in. Beacon Hill Institute and Dr. Larry Kotlikoff team up to provide a detailed estimate of the FairTax Base and derivation of the proper rate calculation formula.  Bottom line is that the 23% rate works it replaces the revenue generated by the repealed taxes, maintains the real value of federal spending, and imposes no additional fiscal burden on state and local governments.

Why the FairTax Taxes Final Government Consumption (PDF)
The philosophy of the FairTax is to tax final consumption, without exception or exclusion. Therefore, the tax must include a tax on final consumption even when the cost or service is paid for by a proxy (i.e. government).  If one does not tax this consumption, it would encourage more government activity thereby crowding out private sector activity.

A Macroeconomic Analysis of the FairTax Proposal (PDF)
This study employs a dynamic supply-side economic model to estimate the impact of the FairTax on major economic indicators:  GDP, disposable income, consumption, investment under the FairTax are all exceed what they would be if the current system were to remain in place. 

These documents give a comprehensive look into the overall explanation of and arguments for the FairTax.  For more research pertaining to specific sectors of our economy and more thorough discussions of the economic issues, please visit the Research & Bill section.