The 60 Second Update with

Congressman John Linder

1. What is the Fair Tax and why do you call it that?

The FairTax is a fundamental tax reform plan that eliminates all Federal income-related taxes. This includes all income taxes, all taxes on capital gains, all payroll taxes, the self-employment tax, and the gift and death taxes. In the place of these assorted burdens on the average American, the government would impose a 23 percent tax on the personal consumption of new goods and services. Additionally, every family would receive a prebate of the sales tax on spending up to the Federal poverty level, to be paid monthly in advance. This would allow a family of four to spend $29,140 annually without having to pay a single penny in Federal taxes.

We call it the FairTax, because quite frankly, it truly is fair – not just for some Americans, but for all Americans. An individual will be taxed only as much as he desires to be taxed, for the individual has ultimate control over how much he spends. There can be no fairer method of raising government revenue.

 Question 2. How would we transition from an income based system
to a consumption based system?