Let’s replace the income tax with the “Fair Tax”

Let’s replace the income tax with the “Fair Tax”

© David Burton 2008

Income Taxes

     I’ve written two articles urging an end to the onerous Federal income tax and all that goes with it (Ref. 1 and 2). I called for the income tax to be replaced by a national sales tax or a value added tax. Today, in the mail, I received a “Federal Income Tax Reform Referendum” from the National Taxpayers Union (NTU). The referendum requested a vote for one of three options: 1) Replace the IRS and the current graduated income tax with a national sales tax; 2) Retain the IRS and replace the current graduated income tax with a flat income tax; and 3) Retain the IRS and the current graduated income tax.

     The first option, which is supported by the NTU, calls for the abolishment of the IRS and the constitutional abolishment of the federal income tax which would then be replaced with a national sales tax, called the “Fair Tax”. The Fair Tax abolishes the current, unfair U.S. Tax Code and replaces it with a national sales tax collected at the cash register at time of purchase. It raises the same amount of money as the current system.

     The Fair Tax would do away with a tax code that now exceeds five million words in laws and regulations. “According to the Tax Foundation, the total taxpayer cost for IRS administration, enforcement, record keeping, tax filing, advice and collection was $194 billion last year. This sum is roughly the size of the total federal budget in 1970.” The total taxpayer cost of the IRS system is currently estimated to be $233 billion annually.

     A national sales tax system would allow each citizen to decide when and how much tax to pay, depending upon how much he or she would consume. There would be no tax on pensions, no taxes on income from savings, no death tax, and a rebate system would ensure no taxes on basic necessities.

     According to Wikopedia, the National Taxpayers Union (NTU) is a taxpayers’ advocacy organization, founded in 1969. It is closely affiliated with a non-profit foundation, the National Taxpayers Union Foundation (NTUF). The NTU provides a rating for every member of Congress, indexing how "taxpayer-friendly" it views each representative or senator to be.

     The group is best known for its work to enact constitutional limits on government taxes, spending and debt. It played a major role in passage of Federal income tax indexing, so inflation no longer bumps taxpayers into higher brackets. It also played a major role in passage of the "Taxpayer Bill of Rights" laws that help to safeguard against IRS abuses and legislation protecting innocent spouses from having to pay tax debts.

     NTUF was the first organization to project in detail the direct losses in after-tax personal income that would result in future decades from uncontrolled entitlement growth. Additionally, well before Social Security reform became a "hot topic" among most think tanks, in 1996 NTUF developed a comprehensive "National Thrift Plan" that mapped out a 30-year-plus transition plan to individually owned personal accounts.

     According to Howard Banks (Forbes, August 3, 1993), “in its purest form, a tax on consumption would replace the income tax and would tax only the money that people (or companies) actually spend. Left in the bank, money earned but not spent becomes a kind of universal IRA, tax-sheltered.”

     In a 1994 article, Steven Forbes wrote that the elimination of the income tax code, “would redirect an immeasurable amount of American brainpower from the numbing exercise of coping with the incomprehensible tax code to more productive purposes.” Forbes estimated that eliminating the federal income tax would save $100 billion (in 1994 dollars) spent filling out tax forms and other forms of compliance and another $100 billion wasted from investments being made for tax (avoidance) rather than economic purposes. In addition, Forbes pointed out that eliminating the income tax, “would get rid of a profoundly corrupting influence on our political life: the countless millions of dollars now showered on politicians and bureaucrats to influence tax-related rules and legislation.”

     We need to eliminate the income tax and replace it with a spending tax! At the same time, we can get rid the IRS, the tax avoidance lawyers and the thousands of pages in the current tax code. We can replace it with a streamlined and simplified set of rules that everyone, including the tax bureaucrats, can understand and follow. If you agree, how about letting your congressmen and senators know how you feel? For more information on the Fair Tax, you can contact NTU at www.ntu.org or at

                                      National Taxpayers Union
                                      108 North Alfred Street
                                      Alexandria, VA 22314.


  1. It’s time to get rid of the tax man, David Burton, Article #1 on Sonofeliyahu website (www.sonofeliyah.com), October 8, 2005.
  2. No More Income Taxes!!!, David Burton, Article #22 on Sonofeliyahu website (www.sonofeliyah.com), April 18, 2007.

  14 February 2008 {Article 29; Govt_07}    
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