FairTax

FairTax is a fixed rate sales tax proposal introduced as bill H.R. 25 in the United States Congress every year since 2005. The Fair Tax Act calls for elimination of the Internal Revenue Service and sets the stage for repeal of the Sixteenth Amendment to the United States Constitution. H.R. 25 would eliminate all federal income taxes (including the alternative minimum tax, corporate income taxes, and capital gains taxes), payroll taxes (including Social Security and Medicare taxes), gift taxes, and estate taxes, replacing every extant federal taxes with a single consumption tax levied on retail sales.

The Fair Tax Act (/) would apply a fixed rate sales tax at the point of sale on all new, final goods and services purchased for household consumption. The proposal also specifies a monthly payment made to all households based on household size. Called a "prebate," the monthly payment offsets the regressive nature of a sales tax up to the poverty level. First introduced into the United States Congress in 1999, a number of congressional committees have heard testimony on the bill; however, it did not move from committee. A campaign in 2005 for the FairTax proposal involved Leo Linbeck and the Fairtax.org. Talk radio personality Neal Boortz and Georgia Congressman John Linder published The FairTax Book in 2005 and additional visibility was gained in the 2008 presidential campaign.