The Chairman’s Report April 19th, 2024

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  • Source: FAIRtax
  • 04/19/2024

Why the FAIRtax Act works for American households

Chad Hagen and Mike Huckabee, both AFFT Advisory Board members, published the following article in the April 15, 2024 Epoch Times.

By Chadwick Hagan and Mike Huckabee


Today is April 15, also known as Tax Day, and we thought it would be a good idea to talk about a consumption tax. The Fair Tax Act (referred to as “FAIRtax”) was introduced to the U.S. Congress in 1999 by former Rep. John Linder (R-Ga.), and it stands as the foremost tax reform plan in the nation.

The Fair Tax Act has been proposed as a bill in the United States Congress regularly since 1999. It was last proposed as H.R. 25 in January of 2023, by Rep. Buddy Carter (R-Ga.) with co-sponsors Reps. Andrew Clyde (R-Ga.), Jeff Duncan (R-S.C.), Kat Cammack (R-Fla.), Scott Perry (R-Pa.), Bob Good (R-Va.), Thomas Massie (R-Ky.), Ralph Norman (R-S.C.), Bill Posey (R-Fla.), Gary Palmer (R-Ala.), Jim Banks (R-Ind), and Barry Loudermilk (R-Ga.).

This Fair Tax Act imposes a national sales tax on taxable new property or services instead of the current income taxes, payroll taxes, and estate and gift taxes.

If the FAIRtax becomes law, that means income, payroll, estate, and gift taxes will be erased forever.

With the FAIRtax consumers would pay almost 30 cents (plus applicable state and local sales taxes) per $1 purchased over the applicable prebate for each consumer; however, this is greatly offset by the fact that no federal taxes would be levied on earnings.

How does this affect low-income and middle-income households?

The FAIRtax includes a provision for a monthly rebate, commonly referred to as a “prebate,” allocated to each household according to its family size.

This prebate is designed to offset the taxes incurred on goods and services, ensuring that households are not taxed below the poverty threshold. The prebate is delivered each month, not annually.

Here’s a visual on the prebate:

How the FAIRtax prebate works. 

The FAIRtax isn’t about raising or lowering taxes; it’s about shifting taxation from what we PRODUCE (our work) to what we CONSUME (our expenditures).

The FAIRtax proposes to replace almost all federal taxes with a 23 percent national retail sales tax, institute a “Family Consumption Allowance,” eliminate the IRS, and create a mechanism to revoke the sales tax if the 16th amendment—which outlines Congress’s authority to levy an income tax—is not repealed within five years.

How does this affect business? To start, businesses would not be taxed on funds they reinvest in their operations.

There would also be increased investment in businesses across the United States. At the moment, trillions of dollars from U.S. citizens and enterprises are currently held offshore to escape taxation, all of these funds would come back to America and be reinvested in our economy.

Wages would also increase. The consensus among most economists is that the burden of the employer payroll tax ultimately falls on employees through diminished wages. Employers typically factor in the overall cost of hiring a worker when setting wages.

When confronted with extra expenditures like payroll taxes, employers might lower wages to compensate, effectively transferring the tax burden to employees in the shape of reduced pay.
The United States stands alone among wealthy nations by imposing retail sales tax—at the state and local level—instead of a value-added tax (VAT) as its primary consumption tax.

For those who say a consumption tax doesn’t work, the federal government already has a form of consumption tax (federal excise tax) on certain goods and services like gas, airline tickets, alcohol, and cigarettes, and this is clearly implemented on top of our current taxes, resulting in the taxpayer paying more taxes.

No longer will employers and employees pay the taxes of drug dealers, prostitutes, pimps, and tax cheats. Criminals might not file returns, but they certainly buy things, and with the FAIRtax enacted, when they do, they will join the rest of us in paying taxes.

The FAIRtax isn’t a gimmick; it’s a game-changer for our economy. Politicians often talk about “fair share,” but nothing truly achieves a “fair share” like the FAIRtax.


Chad and Mike have done an excellent job of communicating why we need to end the present income/payroll tax and replace it with the FAIRtax.

Please go to this link to invest in AFFT and help us pass the FAIRtax.  It’s an investment in your and your family’s future. 


Why would D.C. pass the FAIRtax and give up this almost unlimited source of donations?  The only way that they will is if the rest of us demand it!
Isn’t it time to end this ludicrous tax collection system and the IRS?

There is going to be a vote on the FAIRtax in the House of Representatives.  

We now have the opportunity to force all Members of the House to show where they stand.  They can:
  • Vote for the present income/payroll tax system or for the FAIRtax.
  • Support the corrupt income tax and the IRS or eliminate it.  It can’t be any simpler than that.
  • Hide the true cost of their government or pass the FAIRtax and show everyone the true cost of government on each retail receipt.
  • Support the largest transfer of power from government to the people, the FAIRtax, or not.
If Members think that the FAIRtax needs to be amended to address a problem, then they can propose the change.  Don’t reject the entire bill because it has a perceived “flaw” that can be addressed and, if it is a real “flaw”, corrected in the final bill.

By contributing (investing) $10.40 per month, you help provide a financial base to AFFT.  If you can make larger contributions (investments), these will be used not for salaries, as we are all volunteers, but for the needed updates to our economic studies which will be vital for all future years.
Please go to this link to invest in AFFT and help us pass the FAIRtax.  It’s an investment in your and your family’s future. 
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Americans for Fair Taxation® is a 501(c)(4) non-profit, non-partisan grassroots organization solely dedicated to replacing the current income tax system with a fair, simple and transparent national consumption tax – the FAIRtax® Plan. We rely entirely on contributions from concerned citizens like you who want a tax system that will generate jobs and stimulate the economy. Welcome to the FAIRtax team!