How the FAIRtax Will Make Higher Education More Affordable
Many American families believe that it is important to enable their children to get a college degree. However, the cost of higher education has become a major problem for American families.
For the 2025–26 academic year, average published tuition and fees are approximately:
- $11,950 at public four-year universities for in-state students
- $31,880 at public four-year universities for -out-of-state students
- $45,000 at private nonprofit four-year institutions
- Public two-year colleges in-district: $4,150
- Over four years—and particularly when more than one child attends college—the financial burden can be enormous.
The FAIRtax Act, H.R. 25, offers a fundamentally different approach to education. Instead of taxing Americans when they earn money and then requiring them to pay tuition with what remains after federal taxes, the FAIRtax would repeal federal individual income taxes and payroll taxes and replace them with a national retail consumption tax. Most importantly for students and their families, qualifying tuition would not be subject to the FAIRtax.
H.R. 25 provides, “(4) Education and training.--The term `education and training' means tuition for primary, secondary, or postsecondary level education, and job-related training courses.”
“(D) Education and training.--Education and training shall be treated as services used to produce, provide, render, or sell taxable property or services.”
The FAIRtax recognizes education for what it really is: an investment in human capital rather than ordinary consumption.
It is important to note that more people are electing not to attend traditional colleges but to learn a skilled trade. There are schools that train students to become electricians, plumbers and other well-paid and essential occupations. Tuition to these schools is also exempt under the FAIRtax.
Paying Tuition with Untaxed Earnings
The most important benefit of the FAIRtax becomes apparent when you consider how families pay tuition.
Under today’s system, tuition generally must be paid with after-tax dollars. A parent earns income, federal income tax is imposed, Social Security and Medicare taxes are taken from wages, and only then can the remaining money be used for a child’s education.
Suppose a family needs to pay $25,000 in tuition and has an effective federal income and payroll tax burden of 20 percent. To have $25,000 available after federal taxes, it must earn approximately $31,250.
Obtaining $25,000 to pay tuition requires approximately $31,250 of pretax earnings under that simplified assumption.
Under the FAIRtax, federal income and payroll taxes would be repealed. H.R. 25 specifically repeals the federal income tax, federal payroll taxes and withholding. Because qualifying tuition is also excluded from the FAIRtax, a family could take $25,000 of its earnings and use that $25,000 for tuition without first losing a portion of those earnings to federal income and payroll taxes and without paying the FAIRtax on the tuition payment itself.
That effectively makes education considerably less expensive to purchase.
Lowering Costs for Educational Institutions
There is another important benefit. The FAIRtax removes federal taxes from much of the production process rather than repeatedly taxing income, payroll and business activity.
This is particularly significant for nonprofit educational institutions. H.R. 25 defines qualified nonprofit organizations to include organizations operated exclusively for educational purposes and provides that property and services purchased by qualified nonprofit organizations are eligible for the legislation’s business-purpose exemptions.
That creates the potential for universities and other schools to operate with lower tax-related costs. Lower operating costs do not guarantee that every university will reduce its published tuition dollar-for-dollar. T; tuition is affected by salaries, facilities, financial aid, state appropriations, demand and many other factors. Nevertheless, removing federal tax costs from educational institutions creates economic room for lower tuition, greater financial aid, improved educational services—or some combination of all three.
The FAIRtax also eliminates federal payroll taxes. Under current law, Social Security and Medicare payroll taxes total 15.3 percent for most wages when the employee and employer shares are combined. Payroll expenses are a major component of the cost of operating labor-intensive institutions such as colleges and universities.
Education Should Be Treated as an Investment
There is an important principle behind this policy. When a person buys a television, takes a vacation or purchases another consumer product, the benefit is principally current consumption.
Education is different. A college degree, nursing credential, technical certificate or job-training program can increase a person’s productivity and earning potential for decades.
Tax policy should encourage that investment rather than penalize it.
The FAIRtax does exactly that. It allows Americans to earn money without federal income and payroll taxes and then permits them to invest those dollars in qualifying education without imposing any tax on tuition.
The result is a tax system in which education receives uniquely favorable treatment. Families can devote more of what they earn to tuition, educational institutions can operate without many of the federal tax costs embedded in today’s system, and students are encouraged to invest in improving their skills and productivity.
For a nation that depends upon an educated, skilled and competitive workforce, that is exactly the direction tax policy should take.
CONCLUSION
Isn’t it time that we have a federal tax system that rewards things that benefit society?
People are upset with our present income/payroll tax system because it benefits only a small percentage of the population—the very wealthy and Members of Congress who fund their re-election campaigns by selling favorable tax treatment to the highest bidder.
For the rest of us, it’s an expensive, intrusive, incomprehensible mess that none of us fully understands.
THE FAIRTAX IS THE ANSWER.
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 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
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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.