The Fair Tax Act

The Fair Tax Act aims to replace federal income, payroll, estate, and gift taxes with a national retail sales tax of about 23%. Under this system, individuals pay taxes when they purchase new goods and services, rather than on income earned. The idea is to simplify the tax code, encourage saving and investment, and eliminate tax loopholes. The act would exempt used items and necessities like food and healthcare from the new sales tax. Proponents believe it makes the tax system more transparent and fair, while opponents argue it could raise costs for low-income households.