Fair Tax Bill H.R. 25 Act of 2009


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H.R.25 - Fair Tax Act of 2009
To promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national sales tax to be administered primarily by the States

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Fair Tax Bill H.R. 25 Act of 2009

  1. 1. The Highlands Tea Party http://thehighlandsteaparty.com /
  2. 2. What is the FairTax H.R.25 ? <ul><li>The FairTax proposal is a comprehensive plan to replace federal income and payroll taxes, including personal, gift, estate, capital gains, alternative minimum, Social Security/Medicare, self-employment, and corporate taxes. </li></ul><ul><li>The Fair tax proposal was submitted1/4/2007: </li></ul><ul><ul><li>Referred to the House Committee on Ways and Means. </li></ul></ul><ul><ul><li>3/29/2007:Read twice and referred to the Committee on Finance . </li></ul></ul>
  3. 3. What is the FairTax H.R.25 ? <ul><li>Included in the FairTax Plan is the repeal of the 16th Amendment to the Constitution. </li></ul><ul><li>The FairTax allows Americans to keep 100 percent of their paychecks (minus any state income taxes), ends corporate taxes and compliance costs hidden in the retail cost of goods and services, and fully funds the federal government while fulfilling the promise of Social Security and Medicare. </li></ul>
  4. 4. Americans take home their whole paychecks . <ul><li>Not only do more Americans have jobs, but they also take home 100 percent of their paychecks (except where state income taxes apply). </li></ul><ul><li>No federal income taxes or payroll taxes are withheld from paychecks, pensions, or Social Security checks. </li></ul>
  5. 5. The prebate makes the FairTax progressive . <ul><li>To ensure no American pays tax on necessities, the FairTax Plan provides a prepaid, monthly rebate (prebate) for every registered household to cover the consumption tax spent on necessities up to the federal poverty level. </li></ul>
  6. 6. The prebate makes the FairTax progressive . <ul><li>This, along with several other features, is how the FairTax completely untaxes the poor, lowers the tax burden on most, while making the overall rate progressive . </li></ul>
  7. 7. The prebate makes the FairTax progressive . <ul><li>However, the FairTax is progressive based on lifestyle/spending choices, rather than simply punishing those taxpayers who are successful. </li></ul><ul><li>Do you see how much freer life is with the FairTax instead of the income tax? . </li></ul>
  8. 8. No tax on used goods . <ul><li>With the FairTax you are only taxed once on any good or service. If you choose to buy used goods − used car, used home, used appliances − you do not pay the FairTax. </li></ul>
  9. 9. No tax on used goods. <ul><li>If, as a business owner or farmer, you buy something for strictly business purposes (not for personal consumption), you pay no consumption tax. The FairTax is charged just as state sales taxes are today. </li></ul><ul><li>When you decide what to buy and how much to spend, you see exactly how much you are contributing to the government with each purchase. </li></ul>
  10. 10. No Hidden Tax or Compliance Cost <ul><li>Did you know that income taxes and the cost of complying with them currently make up 20 percent or more of all retail prices? It’s true </li></ul><ul><li>According to Dr. Dale Jorgenson of Harvard University, hidden income taxes are passed on to the consumer in the form of higher prices for everything you buy. . </li></ul>
  11. 11. No Hidden Tax or Compliance Cost <ul><li>If competition does not allow prices to rise, corporations lower labor costs, again hurting those who can least afford to lose their jobs. </li></ul><ul><li>Finally, if prices are as high as competition allows and labor costs are as low as practical, profits/dividends to shareholders are driven down, </li></ul>
  12. 12. No Hidden Tax or Compliance Cost <ul><li>thereby hurting retirement savings for moms-and-pops and pension funds invested in Corporate America. </li></ul><ul><li>With the FairTax, the sham of corporate taxation ends, competition drives prices down, more people in America have jobs, and retirement/pension funds see improved performance. </li></ul>
  13. 13. The FairTax brings jobs home <ul><li>Most importantly, the FairTax does not burden U.S. exports the way the current income tax system does. </li></ul><ul><li>The FairTax removes the cost of corporate taxes and compliance costs from the cost of U.S. exports, putting U.S. exports on a level playing field with foreign competitors. </li></ul>
  14. 14. The FairTax brings jobs home <ul><li>Lower prices sharply increase demand for U.S. exports, thereby increasing job creation in U.S. manufacturing sectors. </li></ul><ul><li>At home, imports are subject to the same FairTax rate as domestically produced goods . </li></ul>
  15. 15. The FairTax brings jobs home <ul><li>Not only does the FairTax put U.S. products sold here on the same tax footing as foreign imports, but the dramatic lowering of compliance costs in comparison to other countries’ value-added taxes also gives U.S. products a definitive pricing advantage which foreign tax systems cannot match. </li></ul>
  16. 16. The FairTax strategy is revenue neutral <ul><li>The FairTax pays for all current government operations, including Social Security and Medicare. </li></ul><ul><li>Government revenues are more stable and predictable than with the federal income tax because consumption is a more constant revenue base than is income. </li></ul>
  17. 17. The FairTax strategy is revenue neutral <ul><li>If you were in a 23-percent income tax bracket, the federal government would take $23 out of your paycheck for every $100 you made. </li></ul><ul><li>With the FairTax, if the federal government gets $23 out of every $100 spent in America, the same total revenue is delivered to the federal government. This is revenue neutrality. </li></ul>
  18. 18. The FairTax strategy is revenue neutral <ul><li>So, instead of paycheck-earning Americans paying 7.65 percent of their paychecks in Social Security/Medicare payroll taxes, plus an average of 18 percent of their paychecks in federal income tax, for a total of about 25.65 percent, consumers in America pay only $23 out of every $100. </li></ul>
  19. 19. The FairTax strategy is revenue neutral <ul><li>Or about 30 percent at the cash register when they elect to spend on new goods or services for their own personal consumption. </li></ul><ul><li>And this tax is collected only on spending above the federal poverty level, providing important progressivity. </li></ul>
  20. 20. Tax criminals don’t make criminals out of honest Taxpayers . <ul><li>Today, the IRS will admit to 16 percent noncompliance with the code. </li></ul><ul><li>FairTax.org will be generous and simply take the position that this is likely a conservative estimate of the underground economy. </li></ul><ul><li>However, this does not take into account the criminal/drug/porn economy, which equally conservative estimates put at one trillion dollars of untaxed activity. </li></ul>
  21. 21. Tax criminals don’t make criminals out of honest Taxpayers . <ul><li>The FairTax does tax this — criminals love to flash that cash at retail — while continuing to provide the federal penalties so effective in bringing such miscreants to justice. </li></ul>
  22. 22. Tax criminals don’t make criminals out of honest taxpayers . <ul><li>The substantial decrease in points of compliance – from every wage earner, investor, and retiree, down to only retailers – also allows enforcement to concentrate on following the money to criminal activity, rather than making potential criminals out of every taxpayer struggling to decipher the current code. </li></ul>
  23. 23. Effect of FairTax on families <ul><li>Based on the 2003 guidelines, a family of four would be able to spend $24,240 annually tax free. </li></ul><ul><li>They would receive a monthly rebate of $465 each and every month ($5,575 annually). Therefore, no family would pay tax on essential goods and services, and middle income families would be effectively exempt from tax on a large portion of their annual spending. </li></ul>
  24. 24. Why is the FairTax 'fair'? <ul><li>According to Rep. Linder, the current tax code violates the principle of equality. </li></ul><ul><li>Special rates for special circumstances violate the original Constitution and are unfair. </li></ul><ul><li>Under the FairTax, all taxpayers would pay the same rate and control their liability through their spending. Tax paid would depend on the individual's chosen life style. Basically, the more you spend, the more tax you pay. </li></ul>
  25. 25. Will the FairTax pass? <ul><li>Probably not, but it does have wider support in Congress than the Flat Tax ever managed to gather. </li></ul><ul><li>The addition of DeLay and 14 other co-sponsors in the last month alone is just the latest positive news regarding the FairTax. </li></ul><ul><li>The report stated that a consumption tax, like the FairTax, could very well be the most suitable replacement for the income tax system. </li></ul>
  26. 26. What is Flat Tax? <ul><li>The flat tax rule simply says this: Everyone -- you, me, even Bill Gates -- would pay 17% of what's left of their total annual income from all wages, salaries, and pensions after subtracting a personal allowance. </li></ul><ul><li>Uh, oh, &quot;allowances&quot;. Here comes the higher math. Here come the forms. Right? Nope. There would be only four allowances: </li></ul>
  27. 27. The Four Personal Allowances <ul><li>- $23,200 for married filling jointly </li></ul><ul><li>- $14,850 for single head of household </li></ul><ul><li>- $11,600 for single </li></ul><ul><li>- $5,300 for each dependent child </li></ul><ul><li>No more, tax credits to figure, deductions to keep up with, or loopholes to look for. In fact, the entire tax return form would be printed -- on a postcard. </li></ul>
  28. 28. Consumption Tax <ul><li>A Consumption Tax is levied on the amount spent on services and goods. </li></ul><ul><li>It is based on consumption. </li></ul><ul><li>It is normally an indirect tax like value added tax or sales tax. </li></ul><ul><li>Although it can be levied as a type of personal direct taxation such as an income tax that does not include savings or investments. </li></ul>
  29. 29. Consumption Tax <ul><li>A tax levied on individual commodities or services and included as part of the retail price of those commodities or services paid by consumers. </li></ul><ul><li>For example, a 25¢ tax levied on a pack of cigarettes is a consumption tax </li></ul>
  30. 30. Facts <ul><li>Our Current Tax code is over 70,000 pages. </li></ul><ul><li>The Fair Tax code is 132 Pages. </li></ul><ul><li>We have had some 16,000 changes to the tax code since the mid-eighties. </li></ul><ul><li>Our tax code has driven $2 trillion into the underground economy costing us about $50 billion in tax collections </li></ul><ul><li>Our tax code has driven $12 trillion into offshore financial centers. </li></ul>
  31. 31. Facts <ul><li>Politicians have been changing the tax code since 1913 to gain the favor of one voting bloc or another.  </li></ul><ul><li>Experts spent some 12 years formulating the FairTax Bill. </li></ul><ul><li>  More than $3.5 billion in taxes is owed by almost half a million Federal employees and retirees? </li></ul><ul><li>Tweaking the Tax Code fixes nothing.  Getting rid of the IRS fixes everything.   </li></ul>
  32. 32. Facts <ul><li>When John Linder and some of his FairTax supporters presented the FairTax Bill to former Secretary of the Treasury, John Snow, he said, “You have just proposed the largest magnet for capital and jobs in history.”  </li></ul><ul><li>It is a good thing for all Americans for the United States to be the outsource destination for jobs.  </li></ul><ul><li>It is a good thing for all Americans for our nation to be the world’s safest and most stable tax haven.  The FairTax will give us these results as well as a business climate that will expand freedom. </li></ul>
  33. 33. Disclaimer Information in this presentation was compiled from several different sources of information. The producer of this presentation has put no “spin” on the information, it has been cut and pasted from its source in its entirety. None of this information was copyrighted