The Fair Tax: An Economic Revolution

A Republican revolution swept across America on Election Day. Not only did Donald Trump win the presidency, but Republicans held their majorities in the House and Senate and picked up several Democrat-held state governorships, like Vermont and New Hampshire. It’s been close to a century since the Republican Party last experienced such strength. 

Now that the election is over, the task of governing begins. It’s time to deliver the kind of bold, conservative change that the American people expect from us. We no longer have any excuses as to why we can’t get real results. As Republicans, it’s time to either put up or shut up. 

The first item on our agenda should be overhauling our broken tax code. It seems like Americans can barely earn a few dollars before the government snatches them away and foolishly wastes them. Think of all the taxes that our government levies: personal income tax, corporate income tax, payroll tax, capital gains tax, estate tax, gift tax, etc. The list goes on and on, and it gets longer every year. The current IRS Tax Code is over 70,000 pages long. Outside of lobbyists and tax lawyers, who really knows what’s in there?

Our country was founded on a tax revolt and yet the government today has the ability to confiscate more than half of people’s earnings. What if, instead of reforming our current tax code, we threw it out and completely replaced it? It’s time for a second tax revolt (this time peaceful), and we can accomplish it by implementing the Fair Tax.

The Fair Tax is a national consumption tax that would eliminate every single other federal tax currently being levied. Instead of punishing work, savings, and investment, the Fair Tax incentivizes such activities. It taxes only new goods and services at the final point of consumption; business purchases are not taxed. It eliminates the 8.9 billion hours and $409 billion that Americans spend annually on tax compliance and it completely abolishes the IRS. Revenue collected by businesses would be sent either to the states, which would then send the revenue to the U.S. Treasury after collecting a small fee, or directly to the U.S. Treasury.

Despite what its opponents say, the Fair Tax will not hurt the poor. All adults with a Social Security number will receive a monthly “prebate”, the calculated amount of essential goods and services required by a single person. If a person chooses to spend less than that amount, they will pay a negative effective tax rate. If a person chooses to spend more, their effective tax rate will increase. Everyone will pay the same flat rate at the register, which could initially be set at 30 percent, but the prebates make the Fair Tax progressive. That means that we will no longer have to hear people complaining that the rich aren’t paying “their fair share.” It will be up to every single individual to determine what tax rate he or she pays.

In order for this tax revolt to be truly successful, the Sixteenth Amendment will need to be repealed. Ratified in 1913, it gave Congress broad authority to levy income taxes “from whatever source derived.” Thanks to generations of power-hungry politicians and lobbyists, we now have a tax code that is longer than 90 copies of Harry Potter and the Deathly Hallows stacked end-to-end. If the Sixteenth Amendment were to be repealed, it would go a long way towards restoring sanity to our government and health to our wallets. Our government should not be funded by bleeding people and businesses dry through excessive taxation on productive activities.

Passing the Fair Tax and repealing the Sixteenth Amendment would not be easy, but the odds are steadily improving. More and more members of Congress are becoming co-sponsors of Fair Tax legislation, and more national figures are supporting the idea, as well, including former Arkansas governor Mike Huckabee and Vice President-elect Mike Pence.

Starting in January 2017, 32 state legislatures will be under Republican control. If at least two Democrat-controlled state legislatures join with them, that would constitute the two-thirds supermajority of states required to call a convention of states to propose new constitutional amendments. The Sixteenth Amendment is that close to being repealed.

Imagine the incredible economic growth that the Fair Tax will produce. Wages will increase, prices of goods and services will fall, and more jobs will be created in America. Companies who have left our shores for more economically-competitive countries will return, bringing with them trillions of dollars to invest. Small businesses, free from burdensome income and payroll taxes, will flourish. Declining industries, like U.S. manufacturing, will boom once again, and new industries will be born.

Imagine being able to keep one hundred percent of the money you earn. Imagine not having to keep track of your income because you no longer have to file tax returns. Imagine April 15th being just another day on the calendar.

If we are willing to use our new Republican mandate to enact bold, conservative reforms, these dreams can become reality. It’s time to deliver real change and it starts with the Fair Tax.

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