AmericansAmericans For Fair Taxation For Fair Taxation

www.FairTax.orgwww.FairTax.org

FairTax Act FairTax Act

The FairTax Act of 2009 is HR 25 and S 296The FairTax Act of 2009 is HR 25 and S 296

Abolishes the IRS within three yearsAbolishes the IRS within three years

Allows You to Keep Your Whole PaycheckAllows You to Keep Your Whole Paycheck

Reduces price of goods and services up to 20%Reduces price of goods and services up to 20%

Un-Taxes the PoorUn-Taxes the Poor

Simple and Revenue NeutralSimple and Revenue Neutral

Invigorates the economy with private fundsInvigorates the economy with private funds

What’s Wrong with the What’s Wrong with the IRCIRC

Source: U.S. Dept of the Treasury, Cornell University Law School, Forbes Magazine and Wikipedia

Internal Revenue Code (IRC) resides in Title

26 of the U.S. Code.

The IRC of 1986 is the governing tax code as amended.

By 2005 amended over 14,000 times.

Updated 969 times by the 110th Congress.

Embedded TaxesEmbedded Taxes

Source: The FairTax Book, FairTax.org Source: The FairTax Book, FairTax.org

The aggregate of all The aggregate of all goods and services goods and services are sold with an are sold with an

estimated average estimated average embedded tax of embedded tax of 22%.22%.

Embedded taxes include:Embedded taxes include: - Hidden Withholding Taxes- Hidden Withholding Taxes - Hidden Corporate Taxes- Hidden Corporate Taxes - Hidden Compliance Costs- Hidden Compliance Costs

Production, Production, Distribution Distribution ororServices Services CostCost

Embedded Embedded TaxesTaxes

Source: FairTax.Org Source: FairTax.Org

Tax Code, Rules and Regulations Page GrowthTax Code, Rules and Regulations Page Growth1913 to 2006 1913 to 2006

19131913 19391939 19451945 19541954 19691969 19741974 19841984 19951995 20002000 20042004 20052005 20062006

10,00010,000

20,00020,000

30,00030,000

40,00040,000

50,00050,000

60,00060,000

70,00070,000

80,00080,000

400400 504504

82008200

14,00014,000 16,50016,50019,50019,500

26,30026,300

40,50040,500

46,90046,900

60,04460,044 61,22461,22467,20467,204

The Income Tax was The Income Tax was a Flat Tax in 1913a Flat Tax in 1913

Who Pays Taxes Corporate Who Pays Taxes Corporate Taxes?Taxes?

Source: The FairTax book

1099 DivTax Year 2008

Total $0.00

1099 DivTax Year 2008

Total $0.00

x$100$110

Corporations do not pay taxes, they collecttaxes; only wage earners can pay taxes and

through …

- Higher product prices,- Decreased dividends and

or,- Employee layoffs

Abolishes the IRSAbolishes the IRS

Enactment in 2010, FairTax in force in 2011Enactment in 2010, FairTax in force in 2011 Taxpayers are still required to file their 2010 income Taxpayers are still required to file their 2010 income

tax returns by April 15, 2011 tax returns by April 15, 2011

The IRS remains in place until September 30, 2013 to The IRS remains in place until September 30, 2013 to reconcile tax returns for the 2009 tax yearreconcile tax returns for the 2009 tax year

September 30, 2013 – No funding of the IRS beyond September 30, 2013 – No funding of the IRS beyond this date as specified in Sec. 301 of HR 25 / S 296this date as specified in Sec. 301 of HR 25 / S 296

The FairTax eliminates all forms of income taxThe FairTax eliminates all forms of income tax• Individual income taxesIndividual income taxes• Social Security taxesSocial Security taxes• Medicare taxesMedicare taxes• Self-Employment taxesSelf-Employment taxes• Alternative Minimum TaxesAlternative Minimum Taxes• Corporate taxesCorporate taxes• Interest and Dividends taxesInterest and Dividends taxes• Capital Gains, Estate and Gift taxesCapital Gains, Estate and Gift taxes

When enacted, Recommends abolishing 16When enacted, Recommends abolishing 16thth Amendment Amendment When enacted, REPLACES the IRS Code, REMOVES When enacted, REPLACES the IRS Code, REMOVES

embedded taxesembedded taxes

Keep Your Whole Keep Your Whole

Paycheck???Paycheck???

THE TAX SYSTEM THE TAX SYSTEM TODAYTODAY

The income tax flow downThe income tax flow down

IRS

IRS FORMS

IRS CODEIRS CODE

COMPLIANCE COSTS

PREPARE FORMS

SUBMIT FORMS

IRS

?????

Taxes what you earnTaxes what you earn

THE FAIRTAXTHE FAIRTAX

23 CENTS OUT OF EACH DOLLAR 23 CENTS OUT OF EACH DOLLAR SPENT ON NEW PURCHASES AND SPENT ON NEW PURCHASES AND SERVICES.SERVICES. 2323

Social Security and MedicareSocial Security and Medicare Trust Funds:Trust Funds:

1515General Revenue Fund:General Revenue Fund:

88

c//c//

c//

IRS

IRS FORMS

IRS CODE

IRS CODE

APRIL 15 HEADACHES

HISTORY’S DUST BINHISTORY’S DUST BIN

Taxes what you spendTaxes what you spend

2009 FairTax Rebate Schedule

Source: Federal Register

FamilyFamily

SizeSize

AnnualAnnual

AllowancAllowancee

AnnualAnnual

RebateRebate

2 2 ParentParent

MonthlMonthlyy

1 1 ParentParent

MonthlMonthlyy

2 2 ParentParent $21,660$21,660 $4,982$4,982 $415$415 $208$208

+ 1+ 1 $25,400$25,400 $5,842$5,842 $487$487 $279$279

+ 2+ 2 $29,140$29,140 $6,702$6,702 $559$559 $351$351

+ 3+ 3 $32,880$32,880 $7,562$7,562 $630$630 $423$423

+ 4+ 4 $36,620$36,620 $8,423$8,423 $702$702 $494$494

+ 5+ 5 $40,360$40,360 $9,283$9,283 $774$774 $566$566

+ 6+ 6 $44,100$44,100 $10,14$10,1433

$845$845 $619$619

+ 7+ 7 $47,840$47,840 $11,00$11,0033

$917$917 $709$709

>7>7 + $3,740+ $3,740+ +

$860.2$860.200

+ + $71.68$71.68

++$71.68$71.68

Effective Tax Rates: 2009Effective Tax Rates: 2009

Which would you rather do?Which would you rather do?

• Pay an average of 33% of what you earn as Pay an average of 33% of what you earn as income taxincome tax

• Pay 23% on what you spend on new goods and Pay 23% on what you spend on new goods and services*services*

* Remember: The rebate totally un-taxes you up to the poverty level* Remember: The rebate totally un-taxes you up to the poverty level

Question?Question?

Only Three Forms Only Three Forms RequiredRequired

Request for PrebateRequest for Prebate

Employer Verification of salary for Social Security Employer Verification of salary for Social Security and Medicareand Medicare

Retailer’s Quarterly Submittal of FairTax to the StateRetailer’s Quarterly Submittal of FairTax to the State

Revenue Neutral and Revenue Neutral and ProgressiveProgressive

Changes from 160 Million Income Tax Payers to 300+ Changes from 160 Million Income Tax Payers to 300+ Million spendersMillion spenders

50 Million Foreign Visitors Pay the FairTax50 Million Foreign Visitors Pay the FairTax

Illegal Immigrants and Criminals contribute ($2 Illegal Immigrants and Criminals contribute ($2 Trillion)Trillion)

Prebate Un-Taxes the PoorPrebate Un-Taxes the Poor

Saves $300 Billion in Compliance CostsSaves $300 Billion in Compliance Costs

Collects $265 Billion Previously Lost to Tax EvasionCollects $265 Billion Previously Lost to Tax Evasion

7.6 Billion Man-hour Reduction in Compliance and 7.6 Billion Man-hour Reduction in Compliance and Record Keeping EffortRecord Keeping Effort

Approximately $13 Trillion Exists in Dollar Approximately $13 Trillion Exists in Dollar Denominated Off-Shore AccountsDenominated Off-Shore Accounts

Within Months, Money, Manufacturing, Jobs Within Months, Money, Manufacturing, Jobs and Many Company Headquarters Would and Many Company Headquarters Would Return to the U.S.Return to the U.S.

The American Jobs Creation Act of 2004 is a The American Jobs Creation Act of 2004 is a Case in PointCase in Point

U.S. -- U.S. -- THETHE Tax Haven Tax Haven

Things to RememberThings to Remember

With the FairTaxWith the FairTax• The Income Tax Code is TOTALLY REPLACEDThe Income Tax Code is TOTALLY REPLACED• Collection is ONLY at the Point of Sale of New Goods Collection is ONLY at the Point of Sale of New Goods

and Servicesand Services• Necessities of Life are Un-taxedNecessities of Life are Un-taxed• Saves Social Security and Medicare for the Near TermSaves Social Security and Medicare for the Near Term• Everyone Gets to Pay: no ExemptionsEveryone Gets to Pay: no Exemptions• The Amount Collected is Revenue NeutralThe Amount Collected is Revenue Neutral• $13 Trillion Dollars Returns to the U.S. Meaning $13 Trillion Dollars Returns to the U.S. Meaning

Manufacturing Facilities, Jobs and even Company Manufacturing Facilities, Jobs and even Company Headquarters Return and Revive our EconomyHeadquarters Return and Revive our Economy

FAIRTAX: The Real Stimulus Plan!FAIRTAX: The Real Stimulus Plan!

Things to DoThings to Do

Contact Congressman Parker GriffithContact Congressman Parker Griffith• Huntsville and Washington OfficesHuntsville and Washington Offices• E.mail, Post Cards are BestE.mail, Post Cards are Best• Respectfully Ask Him to Co-sponsor, Support and Respectfully Ask Him to Co-sponsor, Support and

Promote the FairTax Act of 2009, H.R. 25Promote the FairTax Act of 2009, H.R. 25

Contact Senators Sessions and ShelbyContact Senators Sessions and Shelby• Huntsville and Washington OfficesHuntsville and Washington Offices• E.mail, Post Cards are BestE.mail, Post Cards are Best• Respectfully Ask Them to Co-sponsor, Support and Respectfully Ask Them to Co-sponsor, Support and

Promote the FairTax Act of 2009, S. 296Promote the FairTax Act of 2009, S. 296

Talk to Friends and Neighbors to Spread the WordTalk to Friends and Neighbors to Spread the Word

Source: U.S. Dept of the Treasury and Forbes Magazine

Become an informed taxpayer!Become an informed taxpayer!

Sign the petition at Sign the petition at www.fairfax.org..

Join Alabama Fairtax at Join Alabama Fairtax at www.alfairtax.org

Get involved with your local FairTax Group.Get involved with your local FairTax Group.

Pass the word at every opportunity.Pass the word at every opportunity.

Advertise with signs and stickers on your car.Advertise with signs and stickers on your car.

Write letters to the editor and other publications.Write letters to the editor and other publications.

Do not accept … “It Won’t Happen”. Do not accept … “It Won’t Happen”.

Other Things to DoOther Things to Do