The FairTax is a revenue-neutral consumption (i.e., sales) tax that would completely replace all other federal taxes, including income, corporate, and the highly regressive payroll taxes. There would be no need to file a tax return, and the hated IRS would be abolished.

Sound interesting? You can learn more at FairTax.org. There are also several books written about the FairTax, including The FairTax Book, which I have read and recommend.

In my own words, here are some other things that I like about the FairTax and one small thing that I don't.

• It is transparent. Politicians and lobbyists would no longer be able to manipulate the tax code behind our backs to favor one group over another.
• It is, as the name implies, fair. Taxpayers at or below the poverty line would pay no tax (due to the "prebate"), and the burden would increase from there as income (manifested in the form of retail spending) increases.
• It would level the playing field for American companies in the global economy and encourage investment and job creation in this country rather than abroad.
• Since it taxes consumption, it would succeed in taxing the underground economy. Wealth obtained illegally would not escape.
• It would encourage legal immigration, since only legal residents would qualify for the "prebate" that offsets the consumption tax spent on necessities.

There is something that I don’t like about the FairTax. Namely, accumulated wealth that has already been taxed under the current system would be taxed again when it is spent at retail. This is offset by the fact that embedded taxes (that would be eliminated under the FairTax) accounts for almost the same amount anyway, so it is actually a very small price to pay for such monumental gains.