Gary Johnson on a fair tax system for America

Everyone has probably heard the old saying which claims that the only sure things in life are death and taxes.

While each of us is obligated to pay something so our government can function, there is debate over not only how much this should be, but how to pay in the first place. That is where the debate over America’s most famous tax, namely that on earned income, begins.

Some say that the federal income tax should be repealed. They claim that a replacement called the “fair tax” ought to be considered.

Many have heard about the fair tax, but fewer know much about it.

“Simply put, the Fair Tax is a consumption tax, rather than a tax on income,” former New Mexico Governor Gary Johnson explains to Communities Digital News. One of America’s foremost libertarian voices, he stood as a candidate for the 2012 Republican presidential nomination. He ultimately left the GOP to run as the Libertarian Party’s standard-bearer. Today, Gov. Johnson continues his advocacy for individualist public policy.

He continues: “The basic idea, embraced by many economists, is to eliminate virtually all federal taxes, from income taxes to payroll taxes, and replace them with a single tax on purchases.  In the most widely accepted version of this consumption tax, the rate paid on purchases would be 23%, which roughly equates to the lowest current income tax rate of 15% plus payroll taxes.  Key to the concept is a “prebate” that would provide every household with an advance tax refund each month that would have the effect of exempting purchases of necessities from the tax.”