How the FAIRtax Could Help Reduce Inflation by Increasing the Supply of Goods
Inflation is often described as “too many dollars chasing too few goods.” While that phrase simplifies a complex issue, it captures an important truth: prices rise when the supply of money and purchasing power grows faster than the supply of products and services available for purchase.
If the number of dollars in circulation increases but the economy does not produce more goods, each dollar competes more aggressively for the same limited supply. The result is upward pressure on prices.
The FAIRtax will address the “too few goods” side of that equation by encouraging more production. Unlike the current federal income/payroll tax system, which taxes wages, profits, interest, dividends, capital gains, and business income, the FAIRtax would tax final retail consumption.
The FAIRtax removes federal taxes from the production process and places the tax at the point of retail sale. By doing so, the FAIRtax would stop penalizing work, saving, investment, and business expansion.
Under the present income/payroll tax system, businesses face corporate income taxes, payroll taxes, tax compliance costs, depreciation rules, and other federal tax burdens that raise the cost of producing goods in the United States.
Those costs are built into the prices we pay. They also discourage investment that would otherwise increase factories, equipment, inventory, transportation capacity, and employment.
Like anything else that is punished, when production is taxed, you get less of it than you would otherwise.
Under the FAIRtax, companies earn profits without federal income/payroll tax and workers earn wages without federal income and payroll taxes.
When all of the current tax costs go away, businesses will invest in new machinery, expand facilities, hire workers, and bring production back to the United States.
Investors would also have greater incentive to fund productive enterprises because returns on capital would no longer be reduced by federal income taxation.
More investment means more output. More output means more products available for consumers to buy. When shelves are better stocked, supply chains are stronger, and domestic producers can respond more quickly to demand and inflationary pressure is reduced.
Prices do not rise as fast when businesses can increase supply.
The FAIRtax would also make American-made goods more competitive. Exports would leave the United States free of federal income and payroll tax costs, while imports sold at retail in the United States would face the same consumption tax as domestic goods.
That would reduce the tax disadvantage faced by U.S. producers and could encourage more domestic manufacturing.
The FAIRtax will not magically eliminate inflation. Monetary policy, federal spending, energy costs, global supply chains, and consumer expectations still matter.
But by removing tax barriers to production, the FAIRtax would attack one of inflation’s root causes: scarcity. If inflation is more dollars chasing too few goods, then a tax system that helps create more goods is a powerful anti-inflation reform.
CONCLUSION
The FAIRtax Act (H.R. 25) is more than just a proposal for a retail sales tax; it is a fundamental restructuring of the federal fiscal structure. Unlike other excise taxes which normally are applied to specific products and in different percentage amounts, the FAIRtax applies a 23% rate to all new retail products and retail services.
The FAIRtax helps all of us deal with inflation which is not only increasing prices but eroding the value of the money we earn and save.
THE FAIRTAX IS THE ANSWER.
The FAIRtax is a national retail sales tax on new retail goods and retail services which provides a family credit so that all purchases up to the poverty level for each family are not taxed. There is no withholding from your paycheck, and YOU NEVER HAVE TO FILE A TAX RETURN TELLING THE GOVERNMENT HOW MUCH YOU EARNED AND HOW MUCH YOU SPENT, AND YOU’LL NEVER BE HARASSED BY THE IRS EVER AGAIN.
Many of you have labored tirelessly for freedom from the federal income tax and the IRS. You deserve a great deal of credit for your efforts to educate the American people on the need to fund the American government in a way that is good for America and returns freedom to the American people.
It is imperative, though, that we don’t replace the current income tax and the IRS with an alternative system that can still be manipulated by the Ruling Elite. We must let Congress and the President know that the best way to replace the income tax and the IRS is with the FAIRtax.
Make no mistake about it. The FAIRtax is a grave threat to the Ruling Elites. It will strip them of their power and their ability to control us though the tax system. Their opposition to the FAIRtax will be fierce and unrelenting. And don’t think for an instant that they won’t use half-truths, deception and downright lies in their desperate attempt to hang on to their power.
However, with the support of this President, we can finally eliminate the income tax and the IRS!!!
Of course, the best course of action is to not only repeal the income tax and abolish the IRS but to repeal the 16th Amendment as well so no future administration can ever shackle the American people with an income tax again.
We must come together and ensure that real tax reform, the FAIRtax, is not subverted by the Elites in D.C.
This will take the diligent efforts of all of us. We need your financial assistance, and we need your grass roots assistance.
If you have contacts that will allow us to get more information to President Trump about the FAIRtax please let us know.
Please email us at info@FAIRtax.org and we will give you some options on how you can best help us.
At a minimum, please call your Congressional representative and ask if he or she supports the FAIRtax. If so, thank him/her for their support and suggest they become a cosponsor of HR-25 if they’re not one already. If not, ask why not. If your representative claims to be unfamiliar with the FAIRtax, offer to have someone come to their office and explain it to them.
Please go to this link to invest in AFFT and help us pass the FAIRtax. It’s an investment in your and your family’s future.
THE SOLUTION—PASS THE FAIRTAX!
Why would D.C. pass the FAIRtax and give up this almost unlimited source of donations? The only way that they will is if the rest of us demand it!
Isn’t it time to end this ludicrous tax collection system and the IRS?
HELP BRING ABOUT REAL TAX REFORM AND STOP FUTURE IRS ABUSES
By contributing (investing) $10.40 per month, you help provide a financial base to AFFT. If you can make larger contributions (investments), these will be used not for salaries, as we are all volunteers, but for the needed updates to our economic studies which will be vital for all future years.
Please go to this link to invest in AFFT and help us pass the FAIRtax. It’s an investment in your and your family’s future.