WATCH ROB DISCUSS THE FAIRTAX IN THE VIDEO BELOW
The FairTax isn’t about taxes. It is about freedom. It is about jobs. It is about small government. It is about returning power to the people. It is about ensuring America’s economic growth. These are all topics that are easy to get excited about. The FairTax began as a blank piece of paper. It is the answer to the question, “We know that we need to collect taxes, but how can we collect them in the least intrusive, least economically destructive way possible?” After years of research and focus groups, the FairTax was created as the answer to that question.
On January 3, 2011, the first day of the 112th Congress, I introduced the FairTax with more original co-sponsors than ever before. This success is the direct result of grassroots work from individuals across this nation. Citizens are calling their Member of Congress and demanding that he or she be a part of this big idea. In April of 2011, when the House Committee on the Budget passed the Path to Prosperity, the House’s proposal to bring America’s finances back in balance, we included the FairTax in the Budget report as an example of how fundamental tax reform could explode economic growth in America. This is the first time the FairTax has ever been referenced by the House Budget Committee. In the Summer of 2011, the Ways and Means Committee—the committee that writes tax legislation—held a hearing on the FairTax. This is the first hearing to be held on the FairTax in more than ten years. Clearly, FairTax supporters have much to celebrate in this Congress and we will continue to do more.
What is so special about the FairTax? Many things, but I’d like to focus on just three.
First, transparency. Under the FairTax, we all pay the same tax rate at the cash register for absolutely every new product that we buy. We all pay; we all pay on everything; and we all pay the same rate. These simple principles assure the nation that everyone is paying their share and ensure the nation that everyone has “skin in the game.”
Second, simplicity. The current tax code is a monstrosity, created by Congress to manipulate human behavior. The FairTax eliminates all of the manipulation; it eliminates all of the exceptions, exemptions, deductions, credits, loopholes, and favors. It replaces all of these confusing elements of the code with one simple concept: the prebate. The prebate is a tax refund that comes at the beginning of the month to ensure that every American citizen can purchase his or her essentials completely “tax free.” It uses the Poverty Level to decide how much “essentials” cost, and it rebates the tax on spending up to this level to ensure that essentials are completely tax free. Beyond the essentials, we all pay on all new goods and services that we buy. Everything is taxed once, but only once. Beyond the prebate, there are no exemptions and no exceptions.
Third, freedom. By eliminating all of the manipulative language in the current tax code and replacing it with a simple retail tax and the prebate, we all regain our freedom from the Federal government. Today, through tax credits, tax deductions, and tax hikes, the federal government tries to control the life of every American. Buy this, do that, live here, open a business there, and on and on. The FairTax eliminates the tool of manipulation that is the income tax. Could Congress abuse the FairTax as it has the income tax? Absolutely. Only the American people can control Congress. But, having started with a blank sheet of paper, the FairTax makes it easy for the American people to keep a watchful eye on Congressional action.
Transparency, simplicity, and freedom -those are admirable goals, and I am pleased that the FairTax can deliver on them all. These are all important philosophical ideas, and they reflect the goals of our founding fathers. But there is one more important aspect of the FairTax that must be mentioned here: jobs. Jobs, jobs, jobs. The current tax code is stealing jobs from America and transferring them overseas. In hearing after hearing in Congress, American businesses say that they want to stay in America but they are forced to move overseas for one reason: taxes. It’s true, and everyone in Washington – whether on the left, the right, the center or elsewhere– knows it. In fact, when the Joint Committee on Taxation in Congress studied what would happen if America moved to a true consumption tax like the FairTax, absolutely every economist (from the far left to the far right) said that the American economy would grow faster under a true consumption tax than under the current system.
So, given all of this, why doesn’t America have the FairTax already? Three reasons: transparency, simplicity, and freedom. That’s right. The very same principles that the FairTax achieves are the same reasons that the FairTax is opposed; because all of these principles boil down to taking power away from Congress and Washington, D.C. If we implement a transparent tax code, how will we punish our enemies and reward our friends? We won’t…not with the tax code; and some people want that power. If we implement a simple tax code, how will we manipulate the behavior of the nation? We won’t…not with the tax code; and some people want that power. Eliminating our current burdensome tax code and replacing it with the FairTax would represent the largest transfer of power away from the central government and into the hands of the people since the Revolutionary War…and there are a lot of people with power in the central government who don’t want to see that happen.
The FairTax is about freedom. It is about jobs. It is about our founding fathers. It is about the future of our great land. I am proud to be a champion for the FairTax, and I am proud to have the support of literally millions of Americans across this country who believe, as I do, that the FairTax holds the promise for the future of our nation and for the prosperity of our children and grandchildren.