What is the FairTax plan?
The FairTax plan is acomprehensive proposal that replaces all federal income and payrollbased taxes with an integrated approach including a progressivenational retail sales tax, a prebate to ensure no American pays federaltaxes on spending up to the poverty level, dollar-for-dollar federalrevenue replacement, and, through companion legislation, the repeal ofthe 16th Amendment. This nonpartisan legislation (HR 25/S 296)abolishes all federal personal and corporate income taxes, gift,estate, capital gains, alternative minimum, Social Security, Medicare,self-employment taxes and replaces them with one simple, visible,federal retail sales tax administered primarily by existing state salestax authorities. The IRS is disbanded and defunded. The FairTax taxesus only on what we choose to spend on new goods or services, not onwhat we earn. The FairTax is a fair, efficient, transparent, andintelligent solution to the frustration and inequity of our current taxsystem.