Hello, my name is Michelle Robertson, and I’m here to give two middle fingers to the current tax code and the IRS!

It shouldn’t take a nuclear scientist to understand our tax code, and yet constantly we find CPAs (and hell, even our own Treasury Secretary) struggling to make sense of it. I first heard about a plan called the FairTax through a friend who sent me to their website before the book detailing the plan was released - I couldn’t buy the book fast enough once it did. It took me all of 2 days to read it, because it’s simple and straight forward, just like our tax code should be.

Of course, that’s only one of this plan’s many hooks. The FairTax:

• Takes power away from Washington and it gives it back to the people
• Removes the income tax out of political debate
• Allows you to keep every single dime you earn
• Gives you control over how much money you hand over to the federal government
• Encourages businesses who have fled overseas to escape the current tax code to return to American shores (and it doesn’t take a genius to realize that more domestic business means more job opportunities for you and me)

This is all ignoring the fact that nobody (not even your employer) will have to pay any payroll or corporate taxes! Do you honestly think your current salary isn’t affected by your tax burden resting on the shoulders of your boss? Imagine, as every business, small or large, instantly generates a larger net profit, your salary could actually increase on top of the ability to keep your entire paycheck. And what happens when businesses have more money to invest in productivity? They hire more people, which means more available jobs.

The FairTax also ensures that current tax evaders, be they illegal immigrants, black market criminals, or even just the legally savvy who are able to cheat our currently complicated system (ahem, Timothy Geithner) pay their fair share, without audits or an enormous and invasive bureaucracy.

H.R. 25, the congressional legislation commonly referred to as the FairTax, will repeal the 16th amendment, thereby doing away with the income tax. Ignoring the fact that the personal income tax pays for little more than interest payments on our debt to the Federal Reserve bank, and a handful of redistributive entitlement programs - doing away with the income tax doesn’t mean the federal government goes unfunded. It does mean, however, that the Feds will be funded fairly, primarily by basing taxation on consumption.

Essentially, the government will receive 23% of the price of whatever goods or services you purchase, from movie tickets and cell phones, to your new dream house, to that boat you’ve been dreaming of taking out on the lake. Now, the following caveat is important: this does not mean that those goods will increase in price by 23%. This is a myth perpetuated by folks who don’t understand how much they’re already paying in what are referred to as “embedded taxes” - taxes Uncle Sam is already collecting from the retailer (and any other company involved) in getting vegetables to a supermarket or Chevrolets to a car dealership.

This means your favorite Starbucks’ suppliers can run their business cheaper, while the coffee shop will save a ton itself by not having to shell out taxes for Social Security, Medicare, or corporate taxes, and instead will collect 23% of the base price of a latte (while saving a boatload in the process).

So, while the price of coffee may go up in the beginning, the Caribou down the street, understanding and responding to the nature of a free market system, will see every reason to match increased revenue with lower prices, effectively competing with Starbucks (and every other coffee shop in town) by affecting prices across the board. Under the FairTax, companies who didn’t adjust to the new price equilibrium and put their customers at a disadvantage, would be at a disadvantage themselves.

Another perk for Americans is that the thinkers who devised this plan (Harvard economists, mind you), don’t think you should pay the federal government to consume essential goods and services, or “poverty level expenditures.” The amount of the FairTax paid for these items (which include food, clothing, transportation, medical care, etc) depends on the size of your household, and is paid to you every month in the form of a “prebate check,” no matter how much or little you make, essentially making all essential goods and services tax-free.

Not exempting anyone from the prebate is a good thing; it keeps the Washington lobbyists out of the equation as they would just continue to barter your power for their own. I can only imagine an election where the income tax was not up for debate! With the FairTax, no longer can a politician swear to lower your withholdings or demand they increase, much less pledge to transfer this wealth to someone else. All while the federal government remains as well-funded as it is today (in fact, more so).

Where did this magical 23% figure come from? Unlike the money we borrow from the Federal Reserve, it didn’t just come out of thin air. The economists who were determined to change the current tax code calculated that with a 23% consumption tax the government could be equally funded and the tax would be “revenue neutral.” If you have more questions on why the number is 23% - read the bill - it’s only 131 pages. Our current tax code is tens of thousands of pages, and no, I am not making this up.

Wouldn’t politicians just increase this percentage as they see fit? Well, yes they could, but with one catch: They’d have to look all 300 million Americans in the eye and say, “If elected, I will increase taxes for every single one of you.” This is why your vote will always count.

What if the majority fails to consume as much as they used to? Do you think that’s going to happen? Isn’t it more likely that a lot of individuals who instantly find themselves sitting on a bigger pile of cash will invest more of their money? After all, it’s tax-free, and those investments will only boost our economy further while creating more opportunities for anyone willing to seek them out. Hell, even foreign businesses will join in the fun!

I hear this one a lot: “Michelle, I think the FairTax is a great idea, but do you honestly believe it could happen?” Hell yes, I believe it can happen. We’ve got a black quarterback now, don’t we? And no matter what side of the political fence you sit, a lot of people never thought that could happen either. You are “The People,” people! Write your Senators and Congressmen and tell them that you support the FairTax, and that you’re out to vote for someone who does as well.

Is it going to be difficult? Of course it is! Do you know why? Because the FairTax takes power away from the politicians who are supposedly representing your best interest and gives it back to you! Don’t you know what’s in your best interest better than they do?

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