Taxes & Tax Reform

Fiscal Federalism – The National FairTax and the States
This report presents research on the implications of the FairTax proposal as it affects the economies and politics of the states.


A Comparison of the FairTax Base and Rate
The U.S. federal tax code has undergone major changes since the last important attempt at tax simplification in 1986. The result is over 60,000 pages of tax code, rules, and rulings that can confuse even the most adept tax professionals.


Tax Administration and Collection Costs
The FairTax would be a much more efficient taxation system from the point of view of the administration, collection, and filing costs that it would bring about when compared to the administration, collection, and filing costs of the current tax system it replaces.


FairTax Reduces Complexity, Compliance Costs, and Noncompliance
In the long-running experiment of the income tax, it is fairly well demonstrated that it is the nature of the income tax that breeds complexity. No one political party can assign blame or take credit: The nature of the income tax as a hidden tax invites complexity through special-interest provisions. The constantly growing complexity of our tax system is part of a trend that began in 1913 and has only accelerated with the nearly perennial enactment of new tax legislation signed by both Democrat and Republican members and administrations.


Taxing Sales Under the FairTax – What Rate Works?
This paper, published as a Tax Analysts Special Report in Tax Notes, Nov. 13, 2006, provides a detailed estimate of the FairTax Base and derivation of the proper rate calculation formula. Bottom line is that the 23% rate works it replaces the revenue generated by the repealed taxes, maintains the real value of federal spending, and imposes no additional fiscal burden on state and local governments.


Comparing Average and Marginal Tax Rates under the FairTax and the Current System of Federal Taxation
Using a state of the art model, Larry Kotlikoff shows that the FairTax would lower average and marginal tax rates on labor and savings compared to the current federal tax system. The paper also computes average remaining lifetime tax rates for both the FairTax and if the current system were to remain in place. It shows that regardless of age, marital status or income, all taxpayers are better off in FairTax future.


A nonpartisan/neutral definition sheet for the various tax proposals vying to replace the current income and/or Social Security tax systems
Only four things can be taxed: Earnings (wages and salaries), income from investments, wealth (property, stocks, etc.), and consumption. The national retail sales tax, the flat income tax, and the value-added tax are different approaches to taxing consumption.


FairTax, flat tax, income tax comparison chart
Compares these three taxes on the basic tax reform criteria


The FairTax (real reform) vs. the flat tax (more of the same): A comparison
The U.S.A. once had a flat tax with its first income tax in 1913. With five simple changes, the flat tax can be converted into a graduated income tax, steps that should be all too familiar with any student of the 20th century.


The FairTax and the federal income tax: A comparative analysis
High rates are required under the current tax system because it is replete with exemptions, deductions, credits, and loopholes that narrow the tax base to benefit the tax lobbies. The FairTax taxes all goods and services at one rate with no exceptions.


The FairTax: What’s in it for the states?
By conforming to the FairTax base, states have the opportunity to address negative aspects of their current tax systems and create a more stable revenue stream that keeps pace with economic growth, and in so doing, foster enhanced economic growth and solid job creation.


What is the difference between statutory, average, marginal, and effective tax rates?
Explains the various ways that tax rates can be computed and why that is important to understanding how taxes affect decision making


Which comes first? The implementation of the FairTax or the repeal of the 16th Amendment?
Passage of the FairTax repeals the internal revenue and payroll tax codes; the IRS disappears, in practice if not yet in fact. Once we experience the growth and enhanced civil liberties under the FairTax, it will be much easier to repeal an amendment.


The FairTax: Good for taxpayers, good for businesses, good for the economy
The national debate over taxation is shifting from the question of whether to alter our current tax system to the question of how to alter it. The taxpayer demand for a simpler, fairer, more efficient, and less intrusive system of taxation is building daily.


What the federal tax system is costing you besides your taxes! Tax compliance facts
Individuals, businesses, and non-profits spent an estimated 6 billion hours complying with the federal income tax code in 2005, at an estimated cost of over $265 billion. This amounts to imposing a 22-cent tax compliance surcharge for every dollar the income tax system collects.