The FairTax Book
Neal Boortz, John Linder
17 min
7 Key Points
4.3 RateWhat's inside?
Explore a revolutionary tax reform proposal that aims to abolish income tax and the IRS, replacing them with a simple, fair, and transparent national sales tax system.
You'll learn
1. What's the FairTax plan all about?2. Can FairTax really replace income tax and get rid of the IRS?3. What's in it for me? The perks of FairTax for individuals and businesses.4. FairTax and the big picture: its effect on our national economy.5. Making FairTax a reality: the how-to guide.6. Be a tax reform champ: advocating in your community and beyond.Key points
01FairTax is a plan to make taxes fairer by replacing income tax with a national sales tax
Let's talk taxes. Right now, the government dips into your paycheck before you even get a glimpse of it. They take a chunk, often a hefty one, and it's not always clear where it's going. They decide how much to take, and there's no real cap on it. The only thing stopping them from taking nearly all your earnings is the fear of an uprising. Now, imagine a different approach. Picture a system where you only pay taxes when you buy new stuff. This is the FairTax policy. Instead of the government taking a slice of your earnings before you see it, you'd pay taxes only when you purchase new goods or services. This means you'd know exactly how much you're earning and how much you're handing over to the government. Let's put this into perspective with a real-life example. Say you earn $1000. Under the current income tax system, the government might snatch $200 before you even see your paycheck. You're left with $800, but you're in the dark about where that $200 went. With the FairTax policy, you'd take home the full $1000. Then, when you go to buy a new TV for $500, you might pay an extra $100 in taxes. You know exactly how much you're giving to the government, and you have more control over when and how you pay it. The FairTax policy also puts the government in the hot seat for how it uses tax money. Since taxpayers can see exactly how much they're giving to the government, they can demand more transparency and accountability for how that money is used. In a nutshell, the FairTax policy aims to make taxation fairer by swapping the income tax with a national sales tax. This would give taxpayers more control over their earnings, provide more transparency about how much they're giving to the government, and hold the government more accountable for how it uses tax money. It's a fresh take on an old system, and it just might be the change we need.
02The U.S. started taxing people during the Civil War to pay for the war
Let's take a trip back in time, all the way to the Civil War in 1861. The government was in a pickle, needing a whole lot of cash to fund the war. So, they came up with a new idea: taxing the income of the American people. This was a big deal, as it was the first time Uncle Sam dipped his hand directly into the pockets of individuals. Now, this tax wasn't for everyone. It was a 3% tax on folks earning between $600 and $1000 a year. Considering the economy back then, that was a pretty hefty income, and less than 2% of the population fell into that bracket. So, in essence, this was a tax on the well-off. But, as you can imagine, this tax wasn't exactly popular. After the war wrapped up in 1872, there was a big push to get rid of it, and it was eventually repealed. But the idea of an income tax didn't disappear. Fast forward to 1914, and Congress brought it back, kicking off a new chapter in American taxation. The general feeling was that the income tax was a burden on the rich. This made it tough for the government to broaden the tax base or hike up the tax rate. The tax was paid once a year, and people knew exactly how much they were shelling out, which only added to their resentment. But the government needed to make sure everyone was paying their fair share, not just the wealthy. So, they came up with a new way to collect taxes: "withholding." Before this, people had to write a check for their entire tax bill and send it off to the government each year. This made it crystal clear how much they were paying in taxes. Withholding, however, was a game-changer. It allowed the government to take taxes directly from people's paychecks before they even saw the money. This made it a lot harder for folks to know exactly how much they were paying in taxes. It also gave the government more control over people's money, as they could take out the taxes before the money even hit people's bank accounts. This new way of collecting taxes made things a lot easier for the government. But it also made the process less transparent. People weren't as aware of how much they were really paying in taxes. This lack of transparency has been a bone of contention ever since, as it allows the government to collect taxes without being fully accountable to the people for how the money is spent.
Continue reading with LeapAhead app
Full summary is waiting for you in the app
03The government makes a lot of money from tax compliance and hidden taxes in product prices
04FairTax was created to stop the government from taking too much of people's earnings
05If FairTax is put into action, it will boost the U.S. economy
06The IRS has too much power and can make life hard for people
07Conclusion
About Neal Boortz, John Linder
Neal Boortz is a retired American author, attorney, and former Libertarian radio host. John Linder is a retired U.S. Representative from Georgia, serving from 1993 to 2011. Both are advocates for the FairTax, a proposed replacement for the federal income tax system.
