FairTax fight to continue in next Congress

Members in both the House and Senate have plans to re-introduce FairTax legislation in the next Congress.

First introduced in Congress in 1999 by Georgia Republican Rep. John Linder, who is retiring at the end of the current Congress, the FairTax is a proposal to scrap all federal income and payroll taxes and replace them with a progressive tax on retail consumption. The proposal would also provide to all American citizens, regardless of income, “a monthly universal prebate to ensure that each family unit can consume tax free at or beyond the poverty level, with the overall effect of making the FairTax progressive in application.”

Linder has been a veritable FairTax crusader for well over a decade and his soon-to-be successor in Congress, former chief of staff Rob Woodall, will be picking up where his old boss left off. On Thursday, December 9, Linder passed the proverbial FairTax torch to Woodall, handing him a copy of the FairTax legislation.

“I am particularly proud of Rob Woodall who helped write the [FairTax] bill and both books [on the FairTax]. He is going to be your champion from now on,” Linder told a crowd of supporters.

And Woodall has embraced the call. He will be introducing the FairTax again on the first day of the next Congress.

“For me the FairTax has never been a tax bill. It has been a freedom bill,” Woodall told The Daily Caller. “To watch all of my friends in business be chasing tax incentives instead of the best economic outcomes for their businesses is a painful thing and we lose literally billions in productivity every year. And so I think having this [tax] discussion now is just reminding America how much we argue about the edges and how little time we spend arguing about the underlying problem.”

Woodall is adamant that he will make a difference in the tax code eventually. For although the FairTax has more co-sponsors in both the House and Senate than any other piece of fundamental tax reform, Woodall told TheDC that change will be practically impossible without presidential leadership.

“My job over the next 12 months is to make sure the FairTax is in the mix for all those conversations, so that we have done everything we need to make sure the FairTax is at the top of everybody’s list,” Woodall said. “I know that we need a presidential leader to do anything that is this big.”

Woodall believes that the next presidential election will see more candidates running on a FairTax platform — as former Alaska Democratic Sen. Mike Gravel and former Arkansas Republican Gov. Mike Huckabee did in 2008.

Georgia Republican Sen. Saxby Chambliss will have a companion bill on the Senate side next year as well. Chambliss likewise has spent years pushing for the FairTax.

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  • Dragon

    One thing many people don’t realized is that illegal aliens, crooks, and international visitors will be taxed on new items and services when we get the FairTax. This would be huge. Not to mention the fact that these people would not be able to get the prebate…

    Plus, we’ll no longer be penalized by making money in the stock market.

    The billions of US dollars stashed in off-shore accounts would return to the US.

    The FairTax would cost much less to implement than the cost of the current income tax boondoggle. Even my tax preparer is for the FairTax.

  • scottgreene

    The Income Tax system is a psychotic legal system and only gets worse year after year after year.

    Citizens and businesses of this country spend close to 140 Billion Dollars a year and spend 7 Billion Hours in attempted tax compliance.

    The Income Tax code itself is 70,000 pages of arbitrary and contradictory laws and opinions.

    This plus at least a million more pages of Revenue Rulings, Letter Rulings, Tax Memorandums, Tax Publications, Tax Court, Federal Court and Supreme Court Opinions that are written in an effort to explain the mind numbing Income Tax code.

    Most personal, financial and business decisions all have to take into account the Income Tax system and generally require expensive assistance from tax accountants and lawyers who themselves do not even understand the Income Tax code.

    This is no way to fund a government and unless something is done, like instituting the Fair Tax, this Income Tax system is going to continue to wreak havoc on the US economy.

  • Adakin

    When you tax something, you get less of it.

    When you subsidize something, you get more of it.

    Our tax system currently taxes income, wealth and success.

    At the same time, we subsidize poverty and failure.

    The FairTax does neither. It simply taxes consumption of new goods and services. It does not tax used goods, tuition, investments (which is considered to be the same thing as tuition) and “B-to-B” transactions.

    == == ==
    Questions for all of the “Anti-FairTax” people:

    1)Please tell me what the macro-economic implications would be when we all taxes on production and wealth accrual is abolished?

    2)Would our U.S. jobs continue migrating overseas? or would the overseas manufacturers consider the U.S. a tax haven and move their production facilities to our country?

    3)One last point/question… The FairTax would suddenly give you your privacy back. Walmart doesn’t ask you how many dependent kids you have, or if you own or rent, or how much you made last year, or what (gov’t approved) charities you support. Suddenly, you have your privacy back. Its none of anyone elses business what you make or these other questions. And with a sales tax, nobody’s gonna be asking. Okay Anti-FT’s… tell us why getting our privacy back is bad.

    Inquiring minds want to know.

  • andyg

    DanH, I disagree with you on a few points. It should be pointed out also that unless the 16th Amendment is repealed, the Fair Tax is destined to become just your basic VAT. You said: “They will not be avoiding the sales tax by buying a used item because the tax will already have been collected on that item. Moreover People’s net purchasing power will increase since they will have more money in their paychecks and dividend checks due to no taxes being deducted from their income, making new items more affordable”

    I fail to see how purchasing power will be increased if they are paying 23% in sales tax as opposed to the 7% or whatever sales tax we currently pay in whatever state we live in. Yes, we will have more disposable income but the higher sales tax will nullify any savings; it will be a wash. I fully support abolishing the IRS and the double taxation we currently are subjected to. I think the odds of getting rid of the IRS are slim and none and slim just left the building. However, I think we have a much higher chance of implementing a flat tax than a fair tax. Again, it doesn’t really matter what tax code we have if we don’t get government spending and borrowing under control.

    • Scrap Iron

      Allow me to explain.
      First off, there will be no Fair Tax without repeal of the 16th amendment. That is part of the plan.
      Everything you purchase has embedded taxes in the price. These taxes average 22% of the purchase price. When the Fair tax is enacted, those embedded taxes go away. The price of goods drops, on average, 22%.
      With me so far? Good.
      Now we will add back in an inclusive tax of 23%. The net result is an increase of 1 – 2%.
      You ask, “What if the seller doesn’t lower his prices to reflect the reduced cost? (I can make more) All it takes is one seller to reduce his price and gain market share before all sellers do likewise.

      Yes there are problems that will result, but I believe they can be dealt with more easily than we can with our current, unmanageable tax code.

      Any other question?

  • Scrap Iron

    I would REALLY like an answer to the following question from someone who favors the flat tax over the Fair Tax.

    Why do you believe it is preferable to tax income as opposed to consumption?