**Introduction**

Imagine a tax system that:

-   allows you to keep 100% of your paycheck, pension, and Social
    Security payments.

-   frees up the time wasted on filling out cumbersome I.R.S. forms.

-   makes taxation of income unconstitutional by repealing the 16th
    Amendment.

-   exempts all taxpayers from federal taxation, up to the poverty
    level, through a monthly rebate.

-   ensures that all Americans pay their fair share of taxes.

-   dramatically lowers tax rates for low-income and middle-income
    Americans.

-   Dramatically reduces the cost of goods and services by 20% to 30%.

-   allows families to save more for home ownership, education, and
    retirement.

-   protects and ensures the funding of Social Security and Medicare.

-   leaves unchanged the amount of money raised by the federal
    government.

-   Makes American products more competitive overseas.

**How?** This tax system is the most researched, and we think you\'ll
agree, the best tax reform plan \-- it\'s called the FairTaxSM.

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top](http://www.fairtaxvolunteer.org/materials/talking_points.html#top)

**The Problem is the Current Income Tax Code**

A. The current tax code is unfair, costly, and unreasonably confusing.

-   Because the tax code is so complex and easy to evade, many of us pay
    more in taxes per year than we should! The I.R.S. estimates that
    over 40% of Americans no longer comply with the current tax code!
    This makes the rest of us pay over 30% more in taxes.

-   Over half of American taxpayers seek professional help simply to
    prepare their returns. And according to Money Magazine, chances are
    99% that you will pay someone to file an incorrect return!

-   Compliance with the tax code is not only very difficult and
    complicated, but unreasonably expensive as well. It is estimated
    that it costs taxpayers \$225 billion for tax filing, tax record
    keeping, and tax reduction advice. That\'s the equivalent of about
    \$850 for every man, woman and child in America! We have taxation
    without comprehension!

B. The current income tax code unfairly hampers personal financial
opportunity.

-   When citizens are taxed on their earnings and on what they produce,
    hard work is discouraged.

-   The current income tax code inhibits economic growth, capital
    formation, and, most importantly, job creation.

-   The current income tax code punishes personal savings and
    investments; and sometimes these are unfairly subjected to double
    and even triple taxation.

C. The current income tax code tax is grossly unfair to all wage-earning
Americans.

-   Payroll taxes are taken out of our paychecks, and we all have no
    control or choice over when we pay or how much we pay in taxes. They
    are deducted from our paychecks before we can save or spend it.

-   The payroll tax is the most regressive and unfair feature of our
    current tax system. The current payroll tax applies only to wages,
    and hurts the most important tool by which anyone who is not born to
    wealth has to get ahead.

D. The current tax system allows for massive loopholes encouraging
politicians and lobbyists to pick winners and losers.

-   The tax code is filled with loopholes that are manipulated by
    high-priced lobbyists for their clients, and by other special
    interests.

-   The complexity of the current income tax code is an open invitation
    to those with the means to manipulate the tax code.

-   There are more lobbyists registered in Washington for taxes than for
    any other issue.

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top](http://www.fairtaxvolunteer.org/materials/talking_points.html#top)

**The Solution is the FairTax**

The FairTax is fair to all Americans and simple to understand. Under the
FairTax, all wage earners will keep 100% of their paychecks, prices will
drop dramatically, and Social Security and Medicare funding will be more
secure.

The FairTax frees up financial opportunity by restoring choice in
spending, encouraging savings and investment, and dramatically reducing
tax evasion. With the elimination of virtually all compliance costs,
\$225 billion will be restored to the economy. The FairTax offers an
unprecedented opportunity for lower and middle-income wage earners to
get ahead, to save to buy a house, to educate themselves and their
children, and to save for a dignified retirement. And under the FairTax,
all Americans, regardless of their income level, will be better off with
the FairTax.

-   Everyone will be subject to the same consumption tax rate with no
    exceptions and no exclusions, and those least able to share in the
    cost of government will carry no federal tax burden at all.

-   The FairTax increases individual purchasing power, making it easier
    to get ahead financially by eliminating:

    -   the individual income tax, including capital gains taxes

    -   the payroll income tax

    -   the inheritance tax and the gift tax

    -   the self-employment tax

    -   the corporate income tax

The solution we propose involves two actions:

-   Passage of legislation that institutes a single-rate, FairTax on all
    final sales of new goods and services. This tax would become the
    chief source of revenue for the United States government, replacing
    all federal income and payroll taxes, yet generating the same
    revenue. The legislation provides for a tax rebate equal to the
    consumption tax paid on essential goods and services. The rebate
    ensures that no American will pay tax on the purchase of
    necessities.

-   A constitutional amendment that would repeal the 16th Amendment and
    make a federal income tax unconstitutional.

[Back to
top](http://www.fairtaxvolunteer.org/materials/talking_points.html#top)

**We Can Win!**

Bringing the FairTax to a vote only requires 31 members of Congress! If
eleven members of the Senate Finance Committee and twenty members of the
Ways and Means Committee support the FairTax, they can bring the FairTax
Bill out of their respective committees and onto the floor of both the
House and the Senate. At that point, it would be the leadership\'s
decision to go to a full vote by the entire membership. It can be done,
and we are well on our way there.

Polling shows that the American people understand and favor fundamental
reform such as a federal consumption tax. The national groundswell of
support is growing in leaps and bounds. Thousands of Americans are
expressing their support for the FairTax through phone calls, e-mails,
letters, and faxes. FairTax Volunteers are growing by the hundreds. The
possibility of bringing about peaceful change is one of the great
strengths of the American system. It is obvious that the FairTax is a
reasonable solution whose time has come.

Let me repeat the tremendous benefits of the FairTax plan. The FairTax
plan:

-   Allows you to keep 100% of your paycheck, pension, and Social
    Security payments.

-   Frees up the time wasted on filling out cumbersom I.R.S. forms.

-   Makes taxation of income unconstitutional by repealing the 16th
    Amendment.

-   Exempts all taxpayers from federal taxation, up to the poverty
    level, through a monthly rebate.

-   Ensures that all Americans pay their fair share of taxes.

-   Dramatically lowers tax rates for low-income and middle-income
    Americans.

-   Dramatically reduces the cost of goods and services by 20% to 30%.

-   Allows families to save more for home ownership, education, and
    retirement.

-   Protects and ensures the funding of Social Security and Medicare.

-   Leaves unchanged the amount of money raised by the federal
    government.

-   Makes American products more competitive overseas.

As Americans come to understand that the FairTax will close tax
loopholes and make everyone pay their fair share of taxes, it will be
passed into law. Fully 85% of Americans informed about the FairTax are
likely to support the tax change that makes the closing of these
loopholes a reality. And the FairTax offers not only this, but many
other benefits:

-   You never pay another hidden tax again. The FairTax is printed on
    every receipt for every purchase.

-   All taxpayers are treated fairly. No loopholes for anyone.

-   Individuals have more control and choice. People can make choices
    about how much to pay in taxes, by deciding when to buy and what to
    buy.

-   Virtually all economic models project a much healthier economy under
    the FairTax. Real investment will grow by an estimated 76.4 percent.
    Exports will jump by an estimated 26.4 percent. Interest rates will
    drop between 20 and 30 percent.

-   Small businesses never have to track tax withholdings or deductions.

-   Tax evasion will dramatically decrease. No more income-reporting
    means the end of \"hiding\" income from tax authorities.

-   Compliance costs will be slashed. Compliance costs will drop by over
    90%, from \$225 billion.

**Concluding Remarks**

It is time for the FairTax. For nearly 100 years, we have carried the
burden of an oppressive and counterproductive tax system which has
punished work and achievement, savings, and investment. The current tax
code has been grossly manipulated to reward elite political interests,
and it hurts the average American. The current tax code has hidden the
true cost of government from the very taxpayers who pay for it.

Americans are not obligated to accept a tax system that penalizes the
average working American while giving special consideration to those who
buy favors and perks in Washington, D.C. To be competitive in the next
century, and to renew the American dream, we must change the way we fund
our national government. It is time for the FairTax.

The FairTax will allow Americans to keep 100% of their paychecks,
dramatically reduce prices, protect and ensure funding of Social
Security and Medicare, empower low-income taxpayers, and put choice and
control back into the hands of all Americans. All the crucial elements
are in place: a public, eager and ready for a tax system that is fair,
and a Congress seriously willing to consider genuine tax reform. It only
takes thirty-one Congressmen, and we will win.

Americans for Fair Taxation is a 501c(4) non-profit, non-partisan
organization, headquartered in Houston, Texas with an office in
Washington, D.C. Since it was founded in 1995, Americans for Fair
Taxation has grown to become the largest tax reform organization in the
United States with over 400,000 supporters and members. Americans for
Fair Taxation advocates the elimination of the current income tax code
and proposes to replace it with the FairTax, a single-rate, federal
consumption tax collected only once, at the final point of purchase for
personal consumption.