Back in March of 2009, I wrote a piece outlining the steps that I would take to correct America’s economic slide. The first bullet on the list was:
Rebuild the nation’s balance sheet by encouraging savings and penalizing consumption. The primary tool for doing this would be the replacement of the income tax with a consumption tax
There is now a growing movement to do just this. Called the “FairTax,” the idea is increasingly mentioned in conservative media.
The FairTax plan is a comprehensive proposal that replaces all federal income and payroll based taxes with an integrated approach including a progressive national retail sales tax, a prebate to ensure no American pays federal taxes on spending up to the poverty level, dollar-for-dollar federal revenue neutrality, and, through companion legislation, the repeal of the 16th Amendment.
The FairTax Act (HR 25, S 296) is nonpartisan legislation. It abolishes all federal personal and corporate income taxes, gift, estate, capital gains, alternative minimum, Social Security, Medicare, and self-employment taxes and replaces them with one simple, visible, federal retail sales tax administered primarily by existing state sales tax authorities.
Right thing to do.
Financial Reality 