FairTax Act of 2023

The FairTax Act of 2023 proposes a fundamental shift in the American tax system by repealing all federal income, payroll, estate, and gift taxes and replacing them with a single national sales tax on new goods and services. Under this plan, the Internal Revenue Service (IRS) would be eliminated, and taxpayers would no longer file annual income tax returns, as federal revenue would instead be collected at the point of purchase.

For the average citizen, this would mean receiving a 100% "gross" paycheck with no federal withholdings, while paying a 23% tax on most new retail purchases. To offset the cost of essential goods, the bill includes a monthly "Family Consumption Allowance," which is a cash rebate sent to legal residents based on their household size and federal poverty levels. While the bill aims to simplify the tax code and encourage savings, it would also require the repeal of the 16th Amendment within seven years to prevent the simultaneous existence of both an income tax and a national sales tax.