Fair Tax

Financial

The FairTax eliminates the tax bias against investment.
Under the FairTax, savings and investments are not taxed at all. As Americans save more money, the pool of funds in lending institutions grows. When you add to this the flood of capital currently trapped offshore, we realize a huge increase in the pool of capital, thereby causing the cost of borrowing funds to drop.
The FairTax dramatically increases investment levels compared to the current income tax system.
Investment is important to all wage earners because of the relationship that exists between real wage rates and the level of capital investment per worker. In fact, the most significant contributing factor to achieving higher real wages is the level of capital investment per worker. A worker or farmer, for example, is more productive if he has more machinery and equipment to work with, particularly new equipment that incorporates the latest technological innovations. Higher productivity leads to higher real wages.
Foreign capital investment will also positively impact domestic wage rates and our economy. After repeal of the income tax, the U.S. will be perhaps the most attractive place on earth to invest, attracting investment capital from around the world that will finance new plants and create jobs here in America.
Interest rates drop.
Interest rates include compensation to the lender for the tax that they must pay on the interest you pay them. Under the FairTax, interest rates drop immediately and quickly by approximately one-quarter toward the current tax-exempt rate.
Financial
The FairTax eliminates the tax bias against investment.
Under the FairTax, savings and investments are not taxed at all. As Americans save more money, the pool of funds in lending institutions grows. When you add to this the flood of capital currently trapped offshore, we realize a huge increase in the pool of capital, thereby causing the cost of borrowing funds to drop.
The FairTax dramatically increases investment levels compared to the current income tax system.
Investment is important to all wage earners because of the relationship that exists between real wage rates and the level of capital investment per worker. In fact, the most significant contributing factor to achieving higher real wages is the level of capital investment per worker. A worker or farmer, for example, is more productive if he has more machinery and equipment to work with, particularly new equipment that incorporates the latest technological innovations. Higher productivity leads to higher real wages.
Foreign capital investment will also positively impact domestic wage rates and our economy. After repeal of the income tax, the U.S. will be perhaps the most attractive place on earth to invest, attracting investment capital from around the world that will finance new plants and create jobs here in America.
Interest rates drop.
Interest rates include compensation to the lender for the tax that they must pay on the interest you pay them. Under the FairTax, interest rates drop immediately and quickly by approximately one-quarter toward the current tax-exempt rate.
Financial
The FairTax eliminates the tax bias against investment.
Under the FairTax, savings and investments are not taxed at all. As Americans save more money, the pool of funds in lending institutions grows. When you add to this the flood of capital currently trapped offshore, we realize a huge increase in the pool of capital, thereby causing the cost of borrowing funds to drop.
The FairTax dramatically increases investment levels compared to the current income tax system.
Investment is important to all wage earners because of the relationship that exists between real wage rates and the level of capital investment per worker. In fact, the most significant contributing factor to achieving higher real wages is the level of capital investment per worker. A worker or farmer, for example, is more productive if he has more machinery and equipment to work with, particularly new equipment that incorporates the latest technological innovations. Higher productivity leads to higher real wages.
Foreign capital investment will also positively impact domestic wage rates and our economy. After repeal of the income tax, the U.S. will be perhaps the most attractive place on earth to invest, attracting investment capital from around the world that will finance new plants and create jobs here in America.
Interest rates drop.
Interest rates include compensation to the lender for the tax that they must pay on the interest you pay them. Under the FairTax, interest rates drop immediately and quickly by approximately one-quarter toward the current tax-exempt rate.
Interest income, like all other income, is not taxed under the FairTax plan. Furthermore, there is no longer any need to track interest paid on loans for the purpose of mitigating income
tax liability. Under our current system a deduction, when applicable, allows taxpayers to make interest payments from pre-tax dollars to the extent of their marginal tax rate. Under the FairTax, people make all interest payments from 100 percent pre-tax dollars.
The FairTax causes the stock market to appreciate.
The value of corporate stock or a corporate bond is the present discounted value of the expected future income stream (net of tax) of the stock or bond. Thus, a stock’s value or a bond’s value is a function of two things: The expected future income from owning the asset and the interest rate. The FairTax increases the expected future return on assets and causes interest rates to fall 25 to 30 percent. Investors prosper greatly under this plan, since corporations face lower operating costs and individuals have more money to save and invest. The reform significantly enhances the retirement savings and/or retirement spending power of most Americans.

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Interest income, like all other income, is not taxed under the FairTax plan. Furthermore, there is no longer any need to track interest paid on loans for the purpose of mitigating income
tax liability. Under our current system a deduction, when applicable, allows taxpayers to make interest payments from pre-tax dollars to the extent of their marginal tax rate. Under the FairTax, people make all interest payments from 100 percent pre-tax dollars.
The FairTax causes the stock market to appreciate.
The value of corporate stock or a corporate bond is the present discounted value of the expected future income stream (net of tax) of the stock or bond. Thus, a stock’s value or a bond’s value is a function of two things: The expected future income from owning the asset and the interest rate. The FairTax increases the expected future return on assets and causes interest rates to fall 25 to 30 percent. Investors prosper greatly under this plan, since corporations face lower operating costs and individuals have more money to save and invest. The reform significantly enhances the retirement savings and/or retirement spending power of most Americans.