Americans For Fair Taxation

1. Americans For Fair Taxation www.FairTax.org

2. FairTax Act • The FairTax Act of 2009 is HR 25 and S 296 • Abolishes the IRS within three years • Allows You to Keep Your Whole Paycheck • Reduces price of goods and services up to 20% • Un-Taxes the Poor • Simple and Revenue Neutral • Invigorates the economy with private funds

3. Internal Revenue Code (IRC) resides in Title 26 of the U.S. Code. • The IRC of 1986 is the governing tax code as amended. • By 2005 amended over 14,000 times. • Updated 969 times by the 110th Congress. Source: U.S. Dept of the Treasury, Cornell University Law School, Forbes Magazine and Wikipedia What’s Wrong with the IRC

4. Embedded Taxes Production, Distribution or Services Cost Embedded Taxes • The aggregate of all goods and services are sold with an estimated average embedded tax of 22%. • Embedded taxes include: - Hidden Withholding Taxes - Hidden Corporate Taxes - Hidden Compliance Costs Source: The FairTax Book, FairTax.org

5. 67,204 61,224 60,044 46,900 40,500 26,300 19,500 16,500 14,000 8200 504 400 The Income Tax was a Flat Tax in 1913 Tax Code, Rules and Regulations Page Growth 1913 to 2006 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 1913 1939 1945 1954 1969 1974 1984 1995 2000 2004 2005 2006 Source: FairTax.Org

6. $110 x $100 • Corporations do not pay taxes, they collect taxes; only wage earners can pay taxes and through … - Higher product prices, - Decreased dividends and or, - Employee layoffs • Div • Tax Year 2008 • Total $0.00 Source: The FairTax book Who Pays Taxes Corporate Taxes?

7. Abolishes the IRS • Enactment in 2010, FairTax in force in 2011 • Taxpayers are still required to file their 2010 income tax returns by April 15, 2011 • The IRS remains in place until September 30, 2013 to reconcile tax returns for the 2009 tax year • September 30, 2013 – No funding of the IRS beyond this date as specified in Sec. 301 of HR 25 / S 296

8. Keep Your Whole Paycheck??? • The FairTax eliminates all forms of income tax • Individual income taxes • Social Security taxes • Medicare taxes • Self-Employment taxes • Alternative Minimum Taxes • Corporate taxes • Interest and Dividends taxes • Capital Gains, Estate and Gift taxes • When enacted, Recommends abolishing 16th Amendment • When enacted, REPLACES the IRS Code, REMOVES embedded taxes

9. IRS IRS ????? IRS CODE IRS CODE IRS FORMS PREPARE FORMS SUBMIT FORMS COMPLIANCE COSTS THE TAX SYSTEM TODAY Taxes what you earn The income tax flow down

10. IRS CODE 23 IRS CODE 15 IRS FORMS General Revenue Fund: 23 CENTS OUT OF EACH DOLLAR SPENT ON NEW PURCHASES AND SERVICES. IRS APRIL 15 HEADACHES HISTORY’S DUST BIN 8 Social Security and Medicare Trust Funds: c c c / / / THE FAIRTAX Taxes what you spend

11. 2009 FairTax Rebate Schedule Source: Federal Register

12. Effective Tax Rates: 2009

13. Question? • Which would you rather do? • Pay an average of 33% of what you earn as income tax • Pay 23% on what you spend on new goods and services* * Remember: The rebate totally un-taxes you up to the poverty level

14. Only Three Forms Required • Request for Prebate • Employer Verification of salary for Social Security and Medicare • Retailer’s Quarterly Submittal of FairTax to the State

15. Revenue Neutral and Progressive • Changes from 160 Million Income Tax Payers to 300+ Million spenders • 50 Million Foreign Visitors Pay the FairTax • Illegal Immigrants and Criminals contribute ($2 Trillion) • Prebate Un-Taxes the Poor • Saves $300 Billion in Compliance Costs • Collects $265 Billion Previously Lost to Tax Evasion • 7.6 Billion Man-hour Reduction in Compliance and Record Keeping Effort

16. U.S. -- THE Tax Haven • Approximately $13 Trillion Exists in Dollar Denominated Off-Shore Accounts • Within Months, Money, Manufacturing, Jobs and Many Company Headquarters Would Return to the U.S. • The American Jobs Creation Act of 2004 is a Case in Point

17. Things to Remember • With the FairTax • The Income Tax Code is TOTALLY REPLACED • Collection is ONLY at the Point of Sale of New Goods and Services • Necessities of Life are Un-taxed • Saves Social Security and Medicare for the Near Term • Everyone Gets to Pay: no Exemptions • The Amount Collected is Revenue Neutral • $13 Trillion Dollars Returns to the U.S. Meaning Manufacturing Facilities, Jobs and even Company Headquarters Return and Revive our Economy • FAIRTAX: The Real Stimulus Plan!

18. Things to Do • Contact Congressman Parker Griffith • Huntsville and Washington Offices • E.mail, Post Cards are Best • Respectfully Ask Him to Co-sponsor, Support and Promote the FairTax Act of 2009, H.R. 25 • Contact Senators Sessions and Shelby • Huntsville and Washington Offices • E.mail, Post Cards are Best • Respectfully Ask Them to Co-sponsor, Support and Promote the FairTax Act of 2009, S. 296 • Talk to Friends and Neighbors to Spread the Word

19. Other Things to Do • Become an informed taxpayer! • Sign the petition at www.fairfax.org. • Join Alabama Fairtax at www.alfairtax.org • Get involved with your local FairTax Group. • Pass the word at every opportunity. • Advertise with signs and stickers on your car. • Write letters to the editor and other publications. • Do not accept … “It Won’t Happen”. Source: U.S. Dept of the Treasury and Forbes Magazine