What is the Fair Tax Act ?

The FairTax is a proposed change to the federal tax laws of the United States that would replace allfederal income taxes[1] with a single national retail sales tax. The plan has been introduced into the United States Congress by two Georgia Republicans, Representative John Linder and Senator Saxby Chambliss, as the Fair Tax Act (H.R. 25/S. 296). The tax would be levied once at the point of purchase on all newgoods and services for personal consumption. The proposal also calls for a monthly payment to all familyhouseholds of lawful U.S. residents as an advance rebate, or 'prebate', of tax on purchases up to the poverty level.[2][3] The sales tax rate, as defined in the legislation, is 23 percent of the total payment including the tax ($23 of every $100 spent in total—calculated similar to income taxes). This would be equivalent to a 30 percent traditional U.S. sales tax ($23 on top of every $77 spent—$100 total).[4]