Americans For Fair Taxation

Americans For Fair Taxation (AFFT), also known as FairTax.org, is a United States political advocacy organization focused on replacing the federal tax system rather than making incremental changes to existing income-tax rules. Its central policy proposal is the FairTax, legislation intended to eliminate federal individual and corporate income taxes, payroll taxes, estate taxes, gift taxes, and the Internal Revenue Service's role in administering those taxes, replacing them with a national retail sales tax. The proposal also includes a monthly payment, commonly called a prebate, intended to offset the tax on consumption up to a specified poverty-level spending amount for citizen and legally resident households. The organization was established in 1994 by Houston businessmen Jack Trotter, Bob McNair, and Leo Linbeck Jr. The founders initially committed $1.5 million each to investigate weaknesses in the existing federal tax structure, study public attitudes toward tax reform, and develop an alternative system. They later raised an additional $17 million to support nationwide focus groups and tax-policy research. The work involved economists and policy specialists associated with institutions including Harvard University, the Massachusetts Institute of Technology, the University of Maryland, Rice University, the Baker Institute for Public Policy, the Heritage Foundation, the Cato Institute, and the National Bureau of Economic Research. AFFT's advocacy centers on the Fair Tax Act, identified in the reference material as H.R. 25 in the House of Representatives and S. 122 in the Senate. The organization presents the proposal as a simpler and more transparent system based on consumption rather than earnings, arguing that it would broaden the tax base, remove federal taxation from wages and investment income, and reduce the administrative burden associated with the Internal Revenue Code. It describes its governing ideals as simplicity, fairness, and freedom and operates primarily through volunteer and grassroots activities. The organization has stated that it has more than 800,000 supporters and has characterized itself as the largest single-issue grassroots taxpayers' union in the United States; those figures are organizational claims rather than independently verified measurements in the supplied material. A recurring issue in public discussion of the FairTax is how its rate is expressed. AFFT commonly describes the proposal as a 23 percent tax-inclusive rate, meaning that 23 cents of each dollar paid by a consumer would represent tax. Critics note that most American retail sales taxes are quoted on a tax-exclusive basis, under which a 23 percent tax-inclusive rate corresponds to approximately a 30 percent addition to the pre-tax price. AFFT defends the 23 percent presentation as a comparison with income-tax rates and points out that the inclusive formulation is used in the legislative proposal. The group has also faced questions about alleged connections between the FairTax concept and Scientology-affiliated tax-reform efforts. In 2007, Bruce Bartlett argued that an earlier version of the idea had been devised by the Church of Scientology. AFFT founder and chairman Leo Linbeck Jr. rejected that account and stated that Scientology had no role in the organization's founding, research, or development of the legislation. The supplied material does not establish that AFFT itself was involved in a scandal or legal violation. Its public identity remains that of a single-issue advocacy organization seeking congressional adoption of a fundamental federal tax replacement plan.

Americans For Fair Taxation was founded in 1994 by Houston businessmen Jack Trotter, Bob McNair, and Leo Linbeck Jr. The organization emerged from an effort to investigate whether the United States needed a fundamental replacement for its federal tax code. Each founder pledged $1.5 million in seed funding. The initial objective was not simply to promote a preselected tax rate, but to commission research into perceived defects in the existing system, ask citizens what they wanted from tax reform, and develop a replacement based on the results. The founders subsequently raised an additional $17 million for public-opinion focus groups and tax-policy studies conducted across the country. The research program drew on economists and policy specialists connected with several universities, think tanks, and research institutions. The supplied reference material identifies contributors or advisers associated with the Heritage Foundation, the Cato Institute, Harvard University, the Massachusetts Institute of Technology, the University of Maryland, Boston University, Rice University, the Baker Institute for Public Policy, the National Bureau of Economic Research, and the Argus Group. Their work helped shape the proposal that became known as the FairTax. The FairTax framework promoted by AFFT would replace federal personal and corporate income taxes, payroll taxes, and several transfer-related taxes with a national retail sales tax on new goods and services. The system would be administered at the point of retail consumption rather than through taxation of wages and investment returns. To reduce the burden on low-income households, the proposal includes a prebate: a recurring payment intended to cover the tax on spending up to a defined poverty-level amount for eligible citizens and legal residents. AFFT presents this structure as a simpler, more visible, and more economically neutral alternative to the existing federal tax system. The group's principal legislative objective has been enactment of the Fair Tax Act, cited in the reference material as H.R. 25 and S. 122. Its activities have included volunteer organizing, taxpayer education, public advocacy, and support for congressional consideration of the proposal. AFFT has described itself as a large single-issue grassroots taxpayers' organization and has claimed more than 800,000 supporters. The proposal has attracted sustained criticism, particularly concerning the way its rate is communicated. AFFT generally uses a 23 percent tax-inclusive figure: from every dollar spent by a consumer, 23 cents would be tax. Critics compare that figure with the tax-exclusive convention commonly used by American states and municipalities, under which a product priced at $100 before tax would cost approximately $130 if a 30 percent rate were applied. AFFT responds that the inclusive figure is the one used in the legislation and offers a more direct comparison with income-tax brackets, where tax is stated as a share of income. In 2007, writer Bruce Bartlett linked the origins of the FairTax idea to the Church of Scientology and its affiliated tax-reform activities. The claim was disputed by John Linder and Leo Linbeck Jr.; Linbeck stated that Scientology played no part in AFFT's founding, research, or drafting of the FairTax legislation. The available material records this as a controversy over intellectual and organizational origins, not as a finding of misconduct by AFFT. The organization is based in Clearwater, Florida, and remains identified with advocacy for comprehensive federal tax replacement.

• 2007

  Dispute over the proposal's alleged Scientology connection

  [1]Americans For Fair Taxationen.wikipedia.org

  Public commentary linked the FairTax idea to Scientology-affiliated tax reform, while AFFT representatives rejected that account of the organization's origins.

• 1994

  Organization founded

  [1]Americans For Fair Taxationen.wikipedia.org

  Jack Trotter, Bob McNair, and Leo Linbeck Jr. established Americans For Fair Taxation and supplied initial funding for research into replacing the federal tax code.

• 1994

  National tax-reform research begins

  [1]Americans For Fair Taxationen.wikipedia.org

  AFFT funded focus groups and policy studies intended to identify public preferences and design an alternative to federal income-based taxation.

Single-issue conservative-leaning tax-policy advocacy focused on replacing the federal income and payroll tax system with a national retail sales tax.

• Tax-reform proposal

  FairTax

  AFFT's central policy proposal is a national retail sales tax intended to replace federal individual and corporate income taxes, payroll taxes, and certain other federal taxes. The framework includes a monthly prebate for eligible citizen and legal-resident households to offset tax on basic consumption. AFFT presents the model as simpler and more transparent than the existing income-tax system, while critics focus on its rate presentation, administration, and likely economic effects.

• Legislative advocacy

  Fair Tax Act advocacy

  AFFT's principal advocacy program supports congressional enactment of the Fair Tax Act, identified in the supplied reference as H.R. 25 and S. 122. The program combines grassroots support, public education, research communication, and lobbying for comprehensive replacement of federal income and payroll taxation.

• FairTax Act grassroots campaign

  United States

  AFFT organizes volunteer and taxpayer advocacy around congressional adoption of the FairTax Act, seeking to build public support for replacing federal income and payroll taxes with a national retail sales tax and prebate.

  Outcome. The legislation remains the organization's central advocacy objective; the supplied material does not document enactment.

  Source

• 1994

  Pursue fundamental tax-code replacementStrategy

  Background

  The founders sought an alternative to incremental amendment of the federal tax code and funded research into public preferences and systemic weaknesses.

  Action taken

  AFFT adopted advocacy for a national retail sales tax with a household prebate as its core organizational strategy.

  Aftermath

  The FairTax became the group's defining policy platform and legislative objective.

  Source

• Use the tax-inclusive FairTax rate in public advocacyStrategy

  Background

  AFFT presents the proposed rate as a share of the final transaction value, while many American sales taxes are quoted as a percentage added to the pre-tax price.

  Action taken

  The organization continues to describe the proposal using the 23 percent tax-inclusive formulation and compares it with income-tax rates.

  Aftermath

  Critics have argued that the presentation understates the rate when translated into the tax-exclusive convention; AFFT maintains that its formulation follows the legislation.

  Source

• 2007

  Scientology connection to FairTax origins disputed[1]Americans For Fair Taxationen.wikipedia.org

  Other

  Bruce Bartlett argued that the FairTax concept originated with a Scientology-affiliated effort. Leo Linbeck Jr. and Representative John Linder rejected the characterization as an account of AFFT's origins, with Linbeck stating that Scientology had no role in AFFT's founding, research, or legislative work.

• Americans For Fair Taxation promotes the FairTax Act[1]Americans For Fair Taxationen.wikipedia.org

  Other

  The organization continues to advocate congressional legislation identified as H.R. 25 and S. 122, which would replace federal income and payroll taxes with a national retail sales tax and household prebates.

• Critics dispute the presentation of the FairTax rate[1]Americans For Fair Taxationen.wikipedia.org

  Other

  Policy critics have argued that AFFT's frequently cited 23 percent rate is tax-inclusive and therefore corresponds to a higher tax-exclusive rate when expressed in the more familiar retail-sales-tax format. AFFT maintains that its presentation is consistent with the legislation and facilitates comparison with income-tax rates.

1. 1Americans For Fair Taxationen.wikipedia.org
2. 2FairTax.orgfairtax.org