Fair Tax Act of 2007

The Fair Tax Act of 2007 is a bill intended to repeal the income tax and abolish the Internal Revenue Service.

Bill summary
The Fair Tax Act of 2007 replaces the Internal Revenue Code of 1986 with the Internal Revenue Code of 2007. It repeals the federal income tax, employment tax (Social Security, Medicare), corporate tax, capitol gains, estate tax, and gift tax, and establishes a national sales tax on the use or consumption in the United States of taxable property or services. The sales tax rate, as defined in the legislation, is 23% of the total register price (23¢ of every $1—calculated the same way as income taxes), which is comparable to a 30% traditional state sales tax (30¢ on top of every $1). The tax would be levied on all U.S. retail sales for personal consumption on new goods and services. A good would be considered "used" and not taxable if a consumer already owns it before the FairTax takes effect or if the FairTax has been paid previously on the good, which may be different than the item being sold previously. Exports and the purchase of intermediate business sales would not be taxed, nor would savings, investments, or education tuition expenses as they would be considered an investment (rather than final consumption). It abolishes the Internal Revenue Service by 2011, and establishes an Excise Tax Bureau and a Sales Tax Bureau in the Department of the Treasury. The bill also grants the states the primary authority for the collection of sales tax revenues and the remittance of such revenues to the Treasury.



House
The Fair Tax Act of 2007 (H.R. 25) was introduced in the House on January 4, 2007 by Rep. John Linder (R-Ga.), and referred to the House Committee on Ways and Means.

Co-sponsors in the House
As of January 1, 2008, the House bill was co-sponsored by the following 68 representatives (67 Republicans and 1 Democrat):

Senate
The Fair Tax Act of 2007 (S.1025) was introduced in the Senate on March 29, 2007 by Sen. Saxby Chambliss (R-Ga.), and referred to the Senate Committee on Finance.



Co-sponsors in the Senate
As of January 1, 2008, the Senate bill was co-sponsored by 4 Republicans:


 * Sen. Tom Coburn (R-Okla.)
 * Sen. John Cornyn (R-Texas)
 * Sen. James Inhofe (R-Okla.)
 * Sen. Johnny Isakson (R-Ga.)

External resources

 * THOMAS: H.R. 25
 * THOMAS: S. 1025
 * FairTax in Wikipedia
 * FairTax.org