The FairTax is a nonpartisan, tax reform plan to replace many federal taxes, such as taxes on income, payroll and capital gains, with a progressive, national sales tax.
The FairTax legislation, HR 25 & S 13, will:
Grow the economy by billions of dollars - FairTax.org/Economy
Create jobs and restore the Made in America label – FairTax.org/Jobs
Provide monthly “prebate” payments to untax necessities and the poor - FairTax.org/Prebate
Lower tax rates for all income groups - FairTax.org/Rates
Save $430 billion in annual compliance costs - FairTax.org/Compliance
Lower home costs – FairTax.org/Homes
Raise equal revenue as the current system - FairTax.org/Revenue
AFFT and the undersigned, urge President Obama to join Americans from the right, left and center to support the FairTax.
Response to Petition
By Jason Furman
Our tax system is in need of reform. That's why President Obama has called for fundamental reform that lowers tax rates, eliminates inefficient and unfair tax breaks, cuts the deficit, increases job creation and growth in the United States, and observes the Buffett rule—that no household making over $1 million annually should pay a smaller share of its income in taxes than middle-class families pay.
The 'Fair Tax,' however, is inconsistent with these goals. The "Fair Tax" would replace the income, payroll, and estate taxes with a national sales tax. Importantly, that new tax would apply to virtually all expenditures on goods and services, including tuition, medical care, and new homes, all typical family purchases that are not usually subject to taxation by States today.
Replacing our current system with a national sales tax would produce a major increase in taxes for middle class families, while slashing taxes for the wealthiest Americans. Despite its name, that's not a fair way to reform our tax system.
In fact, according to President George W. Bush's bipartisan Advisory Panel on Tax Reform, this national sales tax would:
- Increase taxes on a typical, median-income family by $5,000, or 36 percent.
- Cut the share of Federal taxes paid by the top 1 percent of Americans by more than 40 percent.
In short, because it raises burdens on middle-class families and asks less from the most fortunate, this national sales tax is inconsistent with President Obama's principles for tax reform.
Learn more about the President Obama's tax plan:
- The President's Plan for Economic Growth and Deficit Reduction
- Buffett Rule Facts and Fictions
- Getting the Facts Straight on America's Tax Burden
- President George W. Bush's Bipartisan Advisory Panel on Tax Reform
- Learn more about the American Jobs Act
Jason Furman is the Assistant to the President & Principal Deputy Director of the National Economic Council