WASHINGTON – U.S. Rep. John Linder, R-Ga., has introduced H.R. 25, the “The FairTax Act of 2007.”
This bill was first introduced by Congressman Linder in 1998, and has become increasingly popular since that time. At the close of the 109th Congress the FairTax Act was the most popular tax reform bill in Congress with 59 supporters in the House, which far exceeded any other piece of tax reform legislation.
“The progress we have made since first introducing the FairTax is simply amazing. The grassroots growth has been phenomenal and it is evident that Americans get it,” Linder said. “They are way ahead of the politicians on this one. In the 109th Congress, we had 59 supporters on the bill, and we did not solicit a single one. They came to my office because their constituents demanded it. That is happening all over the country.”
This bi-partisan legislation, with Congressman Dan Boren, D-Okla., as an original co-sponsor, will repeal all corporate and individual income taxes, payroll taxes, self-employment taxes, capital gains taxes, estate taxes and gift taxes and replace them with a revenue-neutral personal consumption tax. The “revenue neutral” number advocated in the bill is 23 percent, which is very near to the average 22 percent embedded cost of the current system in every good purchased.
This embedded cost will be driven out of the price of goods because the FairTax will also eliminate all business-to-business taxes.
“Americans realize that we can achieve a voluntary tax system by allowing everyone to pay taxes when they choose and how much they choose by how they choose to spend,” Linder said. “We are giving Americans an option of paying 23 cents of every dollar they spend with the freedom of anonymity, or paying 33 cents of every dollar they earn and the fear that the IRS will come knocking because of some unintentional mistake. They get it, and they are coming in droves to support change.”
The FairTax achieves voluntary taxation by providing a prebate to all Americans that offsets the tax consequences of spending up to the poverty level. This aspect of the bill makes it the most progressive tax proposal today. In essence, if a family of four does not exceed the poverty level spending which is established by the U.S. Department of Health and Human Services, then, with the prebate, they will pay no federal taxes for that year.
“Big ideas take a long time to achieve in Washington D.C., and I am excited with the progress we have made in such a short period of time,” Linder said. “There are certain economic forces that are pushing us toward the FairTax. If we are going to continue to compete in a global economy, then we will have to move towards a system that removes the foot of the IRS from the throat of our economy.”