FairTax Act of 2025

You decide how much federal tax you pay by deciding what to buy new. Nothing is taken before you see your paycheck.

• +Bill §101Repeals the income tax, so earnings are no longer taxed before you can spend, save or invest them.
• +New IRC §101Tax applies only when you buy new goods and services for your own use.
• +New IRC §2(a)(14), §2(a)(16)Used goods, including existing homes, are not taxed.
• +New IRC §301A monthly rebate covers the tax on essential spending up to the poverty line, so no one is taxed on necessities.
• −New IRC §101(b)A 23% tax-inclusive rate (about 30% added at the register) is a large charge on every new purchase.

No tax on work, savings, investment or business growth. This is the bill’s strongest feature.

• +Bill §101Repeals the corporate income tax and taxes on capital gains, dividends and interest.
• +Bill §102Repeals Social Security and Medicare payroll taxes, so workers keep their full paycheck and employers can hire for less.
• +Bill §103Repeals the estate and gift taxes, so family businesses and farms can pass to the next generation intact.
• +New IRC §102, §203Business inputs and exports are not taxed, so American-made goods compete on price worldwide.
• −Bill §104(d)A full switch on January 1, 2027 brings real transition risk for prices and for people who saved under the old system.

Ends the IRS and puts collection in the hands of the states, but adds a new monthly federal payment to every household.

• +Bill §301Phases out administration of the repealed taxes, winding down the Internal Revenue Service.
• +New IRC §401–§404States that sign agreements collect the tax, moving administration closer to the people.
• +Bill §401Ends the sales tax if the 16th Amendment (which allows the income tax) is not repealed, guarding against paying both.
• +New IRC §703The federal, state and local governments pay the tax on their own purchases, so the true cost of government is visible.
• −New IRC §301–§305The monthly rebate is paid by the Social Security Administration to every registered household, a large new federal transfer program.
• −Bill §302Creates new excise and sales tax bureaus in the Treasury to administer remaining federal taxes.

One rate for everyone, with no deductions, credits or carve-outs for favored groups or industries.

• +New IRC §101A single rate on all final consumption, replacing thousands of pages of deductions and credits.
• +Bill §101Ends the special-interest breaks written into the income tax code.
• +New IRC §101Everyone who spends in the US pays, including visitors and people who earn in the underground economy today.
• −New IRC §302(b)Rebate amounts vary by household size and require lawful residency, so treatment depends on status.
• −New IRC §901Several small-seller and other de minimis exemptions add exceptions to the single rule.

Without an income tax, the government no longer needs to know what you earn, own or invest.

• +Bill §101–§103No individual income, payroll, estate or gift tax returns; individuals stop reporting their income to the federal government.
• +Bill §101Savings and investments are no longer taxed each year, protecting what you build.
• −New IRC §302(d)Households that want the rebate must register every member’s name and Social Security number.
• −New IRC §501–§507Retailers become tax collectors, with monthly filings, records and audits.
• −New IRC §801Financial services fees, including implicit fees on loans, are taxed.