HR 25

After reading Paul Siegel’s post regarding a national sales tax from yesterday along with many of the responses that were either wrong or misinformed I decided to go ahead with this post that addresses HR 25, the implementation of the fair tax plan instead of addressing them in the comments of his post, which was directed more generally at sales taxes. First, let’s simply state what HR 25 is.

(PDF of HR 25)

To promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national sales tax to be administered primarily by the States.

Now, what does this mean? We would eliminate the income taxes currently collected from private citizens and businesses as well. This will eliminate the ‘imbedded taxes’ that we all pay for all consumer goods. Imbedded Tax, what’s that? Let’s say we have a transmission that we are going to buy to replace one that has gone out in our car. The price we will pay to ‘company A’ will have imbedded taxes in them that will be passed on to you. The bearings that company A purchases from company B will include the offset of the taxes that they had to pay for their employees to design and make the bearings as well as the taxes that company C, who provided the steel and company D, who provided the machine parts, etc… By the time you see the final price of the transmission, all of those taxes are included into that price, YOU end up paying for the taxes.

Yikes! How much is that we end up paying? According to Dr. Dale Jorgenson of Harvard University, hidden income taxes are passed on to the consumer in the form of higher prices – from an average 22 percent on goods to an average 25 percent on services – for everything you buy. With the Fair Tax plan, the sham of corporate welfare ends. Over. No longer will we be able to give ‘incentives’ to corporations that are then passed on to the consumer, all taxes on you will be visible. And the good part is that after adding the sales tax onto the price and removing the imbedded taxes on goods and services and competition works it’s way through the system to lower costs, we will end up paying roughly the same for the goods we buy now. All while we are able to retain all of our paychecks.

But what about the poor? There are some who say that this ‘fair tax’ is repressive. Unfortunately, that viewpoint is based on many misunderstandings. HR 25 has been called the most progressive tax possible because the poor will no longer have to pay any taxes at all. Each month, a check for the amount of taxes that they would have paid for goods and services is electronically deposited in their bank account, offsetting the taxes that they pay during that month. The imbedded taxes will be gone, so instead of the current situation where the poor end up paying a huge tax bill that they never see, they will be paying no taxes at all. How much more progressive can you get than that?

And, with no more worry about paying corporate taxes, one of the main reasons that businesses take their business to other countries is now eliminated. We can keep more jobs at home and lose fewer jobs overseas, making our economy even stronger.

I know that there are many more questions by those of you that are curious but cautious about such a large overhaul to the system. You can find answers to your questions at the FAQ page of the Fairtax org page. And I know that there are those who will be opposed to the plan because of a variety of reasons. All I ask is that you look at those FAQs before posting your disapproval so that we can discuss things that haven’t already been discussed and countered well by others. I will do my best to address the issues presented as long as you are willing to view the plan with an open mind.

And those of us who have been touting the plan for the past few years, keep up the fight. Thanks to congressman Linder and Neil Boortz for their excellent book on the subject we are getting more and more discussion that I’ve ever seen before.

2 responses to “HR 25”

  1. Mark Avatar

    Fairtax is such a crock of nonsense.

    For one thing – it depends on the whacked out absurdity of the GOVERNMENT paying ITSELF 800 billion dollars a year.

    Thats right – these morons think the federal government will just pay itself. Don’t believe me?

    Read page 148 of the Fairtax book “The federal government ITSELF will become a MAJOR taxpayer.”

    Major my asp. What a crock. If the government does write itself a check — you idiots — it has to PAY the checks, moron. So it can’t count that as income. DUH. But thats exactly what they morons believe — or pretend to.

    They don’t really believe the federal government can pay a major portion of its own taxes — but the have to SAY such crap, cause thats the only way they can show a 23% tax rate.

    Take that nonsense farce away — DONT pretend the government can pay its own taxes — and the tax rate goes to about 60%. They don’t want you to know that.

    Another thing – you THINK you can keep your entire paycheck under Fairtax? Wrong. Fairtax experts who DEFEND the fairtax told me personally that there Fairtax does not even IMPLY you can keep your entire paycheck. I was stunned — but thats what THEY say. They say no one said or implied wage earners would get their gross pay. Want proof? If this link works, go to it. Read it. Here is a quote of a guy telling me that “keeping your whole paycheck” does NOT mean you will keep the money you paid in FICA or income tax before — he is a Fairtax expert, one of the big people in the movement.


    yes, i’m saying that “keeping 100% of your paycheck” merely points out that you will no longer see income tax and payroll tax withholding on your paycheck. it does not suggest or even imply that your after FT paycheck will be bigger, smaller, or the same as your current paycheck.


    SO you folks who believe Fairtax means you keep the money in your pocket — the Fairtax experts sy they dont even IMPLY or SUGGEST that.

    How do you like that?

    So between the absurd lunacy of pretending the GOVERNMENT will pay itself HUGE taxes each year – AND you don’t really keep your whole paycheck — guess what’s a crock?

    Fairtax is a crock/

    Sorry boys, you got fooled by a bunch of hucksters.

    Oh – one more thing — no one is pushing this in Congress — yes there are 67 sponsors, but NO one is pushing for hearings, or a vote, or anything like it. Why? Because they KNOW its a crock. They know they are fooling you gullible souls. They want to CONTINUE to fool you.

    IF this tax plan did anything like it said – business and corporations would be demanding it. THis is all posturing for you gullible fools. Wake up. The government CANT pay its own taxes, the Fairtax leaders DENY you will keep ANY more of your paycheck, and no one is pushing this farce in congress.

    Its a F A R C E — farce. Look up the word, cause that’s what this is. BULLSHIP.

  2. Rhinehold Avatar

    So many things wrong with this tirade it’s hard to know where to start.

    First, it does not suggest that anyone is paying itself anything. The federal government, when purchasing something, would pay the same fairtax sales tax that anyone else would. That is what is being stated, I’m not sure what about that you have a problem with…

    The way it shows a 23% tax rate is because that’s what economists have calculated the rate of tax we pay as income tax now on every product. When you purchase a shovel, for example, you pay 5.00 for it. 23% of that 5.00 actually goes for income taxes paid up and down the line of production for that server. It is hidden in every product and service we buy. We just want to make it visible now so that when we give low income people a break, they really do see one and aren’t thinking they are paying zero taxes when they really are.

    As for getting all of your paycheck, that’s true and false. You will keep your paycheck, but it will most likely not be as much. The *NET* will be the same. BUT you will be keeping it all.

    In the end, we should see the amount we get in and spend out be the same. BUT we will see it out in the open, not hidden as we do now. We want transparent government.

    Apparently you have a beef with it. Not sure what that is because most of the points you bring up aren’t correct or they have been public since the plan was put together.

    As for businesses demanding it, they are, but remember that the current political landscape tells us that businesses are the enemy so they aren’t being listened to. In fact, a recent poll of the top 50 international companies, they were asked, if the Fair Tax were implemented, where would you build your next plant? 49 said the US and 10 said that they would move their headquarters… In times of recession, what a better way to get the economy rolling, imo.

Leave a Reply

Your email address will not be published. Required fields are marked *