FairTax plan presented Thursday
Replacing the U.S. tax system is no easy matter, but supporters of the FairTax plan continue to plug away.
The FairTax, or a tax on consumption, would replace the income tax, which taxes production.
Rob Benson, communications director for FairTax Minnesota, is hosting a discussion of the tax plan 5:30-9 p.m. Thursday at the Hampton Inn & Suites Conference Center in Bemidji.
"The FairTax plan is a comprehensive proposal that replaces all federal income and payroll 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," states the FairTax Web site.
Two Republican Georgia lawmakers are carrying the Fair Tax Act of 2011 -- Sen. Saxby Chambliss and Rep. Rob Woodall.
The legislation "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," the Web site states.
The FairTax rate of about 23 percent on a total taxable consumer base of $11.1244 trillion would raise about $2.586 trillion, some $358 billion more than the current tax system.
"The FairTax taxes us on what we choose to spend on new goods or services, not on what we earn," the Web site states. "TheFairTax is a fair, efficient, transparent and intelligent solution to the frustration and inequity of our current tax system."
By paying a tax on buying items, the worker would keep their entire paycheck. It would refund in advance the tax on purchases of basic necessities. It also allows American products to compete fairly.
The current House resolution has 55 cosponsors, none from Minnesota. U.S. Rep. Collin Peterson, DFL-7th District, has supported the bill in the past but backed off as a lead supporter when assuming the chairmanship of the House Agriculture Committee, a panel now in Republican hands.