It’s Baaaack! Congressman Woodall Re-Introduces the FairTax

The new session of Congress opened on Tuesday in a snowy Washington, DC, and in what has become a tradition for the first day of the session, Georgia’s Seventh District Congressman Rob Woodall again introduced H.R. 25, A.K.A. The FairTax.

Woodall, who helped draft the original FairTax legislation for his predecessor, John Linder, has long positioned the measure a freedom bill as opposed to a tax bill. In a statement issued on Tuesday, Woodall said,

The current tax code is by far the most effective tool for politicians to use in manipulating the behavior of Americans, and the FairTax removes a very powerful weapon from their arsenal. The fact that there are those in Washington who would resist this can neither surprise, nor discourage us. The immense dedication of those in the FairTax community across the country is directly responsible for the consistent and significant progress we are seeing in Washington, and I’m grateful.

The bill was introduced this year with a record-breaking number of cosponsors, at 58. Georgia Reps. joining Woodall in co-sponsoring the measure include Buddy Carter (1st), Lynn Westmoreland (3rd), Tom Price (6th), Doug Collins (9th), Jody Hice (10th), Barry Loudermilk (11th), and Tom Graves (14th).

Three years ago, another of Gwinnett’s congressman also endorsed the FairTax, although he wasn’t on the sponsor list for 2015.:

It’s not FairTax Friday, but you are welcome to give us your thoughts on the bill in the comments.

40 comments

      • TheEiger says:

        What you are describing is not the Fair Tax it’s a VAT tax. I have no desire to get into a debate over the Fair Tax because in my mind it’s a perfect world scenario of rainbows and unicorns. You can’t have a VAT and property tax, income tax, corporate tax and so on. For the Fair Tax to work you have to get rid of every tax and replace it with only one sales tax for around 30%. The reason the fair tax won’t happen anytime soon is because it is such a drastic change it would have to be implemented in stages. Politicians can’t be trusted to implement it in stages because we would end up with a VAT, income, property and corporate tax and would be worst off than when we started.

        I would prefer to see two tax brackets (one would be better, but let’s get away from the unicorns) 10% and 20% for individuals. 20% for corporations (0 would be better) with all tax deductions done away with for individuals and corporations except for the tax deduction for 501c(3)s. Just my thoughts.

        • John Konop says:

          I actually agree with you…except I would add a small VAT and or NST to replace payroll taxes…it would jump start jobs…..to your point it must replace payroll tax or it would disaster…..

            • John Konop says:

              You are right….my bad should of re read it closer before posting comment….Do you agree with the concept? I am sure you get how it would stimulate the economy?

              • TheEiger says:

                Yeah, I agree with that. Anyone that has ever had to pay both sides of payroll taxes would love to replace it either a NST or VAT.

        • saltycracker says:

          Eiger,

          I moved my comment from a reply….you are correct by taxing levels, that is technically a VAT. I imagine your two tax levels are income taxes.

          We agree politicians can’t be trusted, they must implement complex structures and constantly revise them. We set high levels to be able to selectively pick deductions. The baby step I’d like to test is eliminate schedule A from personal.

          In any case our tax code needs dramatic simplification and uniform across all folk to drive compliance. A Fed, no state, income tax around 5% from $1,000 up and a state sales tax on all transactions around 10%, with a 1% property tax (o homestead).

          • TheEiger says:

            Yes, the tax structure I laid out would be on income.

            You mention increasing the state sales tax to 10% and keep a 1% property tax. Is there a reason you want to keep the property tax or just don’t think we can totally get rid of it?

            • saltycracker says:

              Just threw that in as difficult to end. I think property tax is wrong for a lot of reasons and calculated to run you off unless you increase your income or turn it commercial.
              Bottom line a 30% tax might reduce liquor and cigarette prices but drives a pirate industry sorting out end arounds and exemptions and shelters as the shrinking complaint folks get nailed.

              Prefer we tax the property transaction when money changes hands and we can budget for it, no issue with impact fees, taxing income from it, having ordinances against blighted properties, but taxing property for just holding it? Nah.

              • saltycracker says:

                For giggles here, if we set a property tax at 1% it stays st the value assigned to it when you purchase it until you improve it or dispose of it.
                Just because your neighbor and his agents pull 3 times that 10 years later on a similar property with a nothing down loan has no bearing on your situation. His new buyer calculated he could pay the transaction tax and the 1% on the larger value, not you.

          • gcp says:

            Agree on replacing state income tax with sales tax. As for federal ultimately I would like consumption tax only, however as others have said thats probably not realistic.

            My alternate plan involves flat income tax (would have to determine the %). Because there are no deductions/credits there would be no April 15 filing. Taxes would be paid through your regular payroll deductions much as we do currently. Self employed would pay monthly. Corporate/business tax would also be paid monthly. Such a system would eliminate refund fraud.

            Because many pay no income tax because they don’t report income and other reasons I would include a federal consumption tax (level to be determined) which all would pay.

  1. MattMD says:

    Well, it looks like the circus is back in town.

    And people wonder why we don’t take these clowns seriously.

  2. mlowry says:

    Woodall, Price and the others love this as a campaign issue, but are something less than serious about in-Congress advocacy. It keeps the true conservatives voting for them. When given the chance in 2011 during the only hearing that Ways and Means has ever conducted on it, Woodall was MIA and Price’s questions and comments wouldn’t have convinced anyone to support it.

  3. saltycracker says:

    HR25 as written is DOA.
    $23 of $100 is a 30% sales tax on about everything in our daily life with the dream the new gross price will be unchanged…..like our food, healthcare, cars, homegoods…..
    Property taxes go on. Then we have prebates and exemptions that are sure to morph as that is what lobbyists and legislators do. Tax evasion will be our new cocktail discussion and hobby.

    A Fair national sales tax with no exemptions/exceptions/subsidies with all the net effective rates today should be well under 10%, guess 5%, if applied to all sales – wholesale and retail (yes products sold multiple times could get ugly at retail).

    • Stephen says:

      Sallycracker,

      That prices stay the same was their ORIGINAL lie. They now admit to AT LEAST a 14$ price increase, which I say will be close to the full 30% FairTax.

      How can you get a raise and prices not go up by the same total dollar amount when it is supposed to raise the same total amount of tax revenue??????

  4. gcp says:

    A consumption tax combined with a flat income tax would work but of course it would never pass because too many love the current mess of exemptions, deductions, credits. And those that pay no income tax certainly don’t want to change our current system.

    • TheEiger says:

      We will see. If there was ever a perfect storm for possible tax reform it’s now. The president has said that he is willing to work on it and of course republicans want to lower the rates. The president would like to say he was the one that did away with all of the corporate loop holes and tax breaks for the wealthy. Republicans get to take credit for lowering the tax rates for everyone and corporations. It’s a political win win for the President and republicans. And the taxpayers.

      • Harry says:

        Campaign finance reform would need to happen before tax reform. But, regardless of what they say, both parties are heavily invested in the status quo.

  5. Raleigh says:

    I love it when this subject comes up on this board. Decorum, logic, and thoughtful debate go right out the window. At least it is as entertaining as Saturday Night Live……

    • MattMD says:

      Well, it is a subject that has been beat to death and has a near-zero chance of becoming law.

      The only effect the FairTax will ever have concerning taxes is that those books lowered Boortz’s tax burden due to him donating the book sales to charity.

      • Al Gray says:

        You have to wonder how many more elections that the Grand Old Pharisee base will demand universal fealty to that dead concept. Even Perdue had to climb aboard in 2014.

        The Peach Pundit FairTax Fridays put the thing through a meat grinder several years back, so the PP’ers know the score.

  6. Fairtaxer says:

    The definition of insanity is continuing to sustain the IRS and the whole flawed premise of discriminating against citizens based on their income and all that entails in monitoring and tracking every aspect of people lives:
    http://www.learnvest.com/2015/01/will-this-be-the-worst-tax-filing-season-ever-123

    I’m encouraged that naysayers are laughing and deriding here – that is clearly progress.

    “First they ignore you, then they laugh at you, then they fight you, then you win.” – Mahatma Gandhi

  7. Beverly Martin says:

    Referring to to FairTax as a ‘distraction to real reform’ does a disservice to Americans who understand the detrimental economic and freedom impact of the current tax code. Brushed aside as irrelevant,the FairTax lingers in the House Ways and Means Committee while Americans are led to believe that their only hope of changing the 73,608 page tax code is to ‘fix’ it. The FairTax eliminates the following problems existing within the income tax: Because it is a consumption tax paid at time of purchase it eliminates $378billion and 6.1billion hours of compliance costs to businesses and Iindividuals. TheFairTax reduces the government’s cost of administering the tax structure by 90%. Because businesses and individuals no longer have to make decisions based on how to reduce or pay taxes, the loss of economic transactions (purchasing, investment or savings delayed because of tax considerations) is eliminated. As of 2011, the economic growth that may have been prevented by the tax system was estimated at $148-$609 Billion. (www.tinyurl.com/pazefe6) The FairTax does more than restoring economic prosperity and growth. It restores Constitutional rights by eliminating the IRS. In a court of law, citizens expect to be presumed innocent until proven guilty. Not so with the IRS where the accused is assumed guilty and must prove innocence in a tax court without a trial by jury. To obtain a trial by jury, the accused must first pay all alleged due taxes and fines before appealing for a jury trial. See CATO Institute’s Chris Edward’s “Ten Ways The Income Tax Harms Civil Liberties” http://www.tinyurl.com/me4zseu . There is so much more the FairTax does that no fixing of the current tax structure could or would ever do. Since there are no loopholes, the FairTax eliminates the buying and selling of tax breaks. It specifically sets aside revenue for funding Social Security. It taxes only personal consumption on new goods and services eliminating business-to-business taxation as well as taxation on used goods. It captures the spending done by the currently untaxed $2 -3Trillion economy. By offering the best tax rate (0%) in the global market, it promotes the return of not only the $20Trillion off-shore investments, but it attracts global industry to relocate in the USA. So, rather than attacking the FairTax as a distraction, I would promote the FairTax as the only real tax structure to offer meaningful change.

    • Al Gray says:

      The thing is so dead, and justifiably so, that I won’t be provoked into a point by point rebuttal.

      Evaluate the BILL in the context of its enforcement provisions and one gets a totally different picture.

      There is a blizzard of point-counterpoint on this topic on Peachpundit during several “Fair Tax Friday” threads. You won’t find a better debate on the topic anywhere.

  8. saltycracker says:

    At this junction the best approach for our culture and complex taxation is a flat income tax. It would be easier to absorb, administer and enforce in the current environment. Start at $1,000 with no exclusions, exemptions or rebates. The challenge would be defining income. Inheritances, gifts…might also need to be in conjunction with sales tax reform….tax property sale/purchase or profit…?

    A flat tax would substantially reduce the IRS and facilitate enforcement. It would probably increase revenue at a 5-7% rate.

    The prostitution would be in legislative adjustments to enhance “fairness” such as rebates, particularly when past zero, exclusions, exemptions, exceptions.

    Our culture would move to positive compliance due to equal treatment, revenues would improve and the non-compliant would not be toasted at cocktail parties.

    Just saying this for entertainment as it gives my lawyer, CPA, banker and representative a big nervous laugh.

    • saltycracker says:

      Correction: non-compliant tax category toasted or roasted depending on your wine selection….

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