One of the most attractive elements of the FairTax idea is the fact that after enactment, Americans will take home their whole paycheck, free of federal withholding of income taxes and Social Security and Medicare payroll taxes. This increase in “take home” pay will act as a permanent economic stimulus.

Some perennial critics who seem to live only to pick at the FairTax proposal have suggested that it is misleading to use the shorthand, “take home your whole paycheck” because health insurance co-payments, retirement fund deductions and state and local taxes are often also withheld from paychecks and won’t be affected by passage of HR 25, the FairTax legislation now pending in Congress.

In an effort to be crystal clear that paychecks will get much larger after enactment of the FairTax, recent communications have almost always appended the statement “…free of federal withholding and payroll taxes.” Naysayers aside, the largest deductions from most people’s paychecks are Social Security taxes (7.65%) and income tax withholding. The elimination of these two federal taxes withheld from your take home pay will dramatically increase most Americans’ paychecks. Even for those whose income is so low that no income tax payments are withheld from paychecks, the additional almost eight percent in take home pay can be a lifesaver.

For the self employed, the effect of elimination of federal payroll taxes and withholding can be far more dramatic. The self-employed pay a full 15.3% of wages up to about $100,000 of annual earnings toward FICA (Social Security and Medicare) taxes. Income tax payments are made not out of every paycheck but are estimated and paid quarterly. Both erasing the “self-employment” tax, as the FICA payments are commonly called for this group, and the elimination of quarterly and annual income tax payments can mean a very dramatic increase in funds available to the self-employed.

Most American workers live somewhere between the two extremes and will also see dramatic increases in available income for savings, spending, investment and peace of mind. In essence, the FairTax allows each American to decide, through personal consumption choices, the timing and amounts of federal taxes paid. To see what your paycheck will look like after enactment of the FairTax, just take a hard look at your own pay check “stub” and add back into your future take home pay the amounts now withheld for FICA payments and income taxes.

Our country is on the Path of Unsustainable Debt.

Experts and average people alike worry that the United States is headed for second rate status as a world power because we are “mortgaged” to the hilt to foreign creditors. One recent USA Today analysis found that our real federal debt amounted to more than $500,000 per American household. Much of the true federal (American taxpayer) debt is not even commonly tallied–such as more than $32 trillion in pending Social Security obligations. In addition to its other advantages, the FairTax is the easiest, simplest and best way to expose the true cost of government in every purchase –leading to voter awareness that will restrain politician’s penchant for spending money we don’t have.

Never before has the world seen its richest and most powerful nation so deeply in debt to even the poorest of countries. It is bad enough that we owe a trillion dollars to China, but we even owe money to Botswana!

Today there are few politicians from either political party who can resist the easy reelection strategy of promising and legislating more and more spending. More worrisome is the fact that for many in the voting public, such spending seems divorced from our own earnings. The idea that government spending must eventually come from our own paychecks is obscured because our taxes are largely hidden from sight through payroll withholding and payroll taxes. Thus, many celebrate the refund of a few hundred dollars after April 15th but overlook the fact their refund is but a tiny piece of the thousands of dollars that have been withheld from their paychecks throughout the year. What we are actually doing is making a big interest free loan to our government throughout the year.

Few members of the public would agree that the lucrative industry that has grown up around the tax code justifies the damage to our economy caused by the income tax system. It’s a really attractive system for a very small population of both Republicans and Democrats in Washington, D.C. and a really bad deal for all the rest of us. Love of power over the tax system and the profits derived from those close to the inner workings of these Congressional committees unite both Democrats and Republicans in Washington–and makes clear the distance between what is good for these few and what is good for the nation.

Because our taxes become obvious with every purchase under the FairTax–instead of hidden from us in payroll taxes–we will all begin to see the true cost of the federal government every time we shop. It’s right there on every receipt instead of hidden from us through payroll withholding. Many believe that when we finally “connect” the cost of the federal government with what comes out of our personal spending, a far different attitude about vote-buying spending promises will make “earmarks” like the “bridge to nowhere” a thing of the past. Families well understand that incurring debt beyond one’s ability to pay is a dangerous path. The FairTax makes obvious how much our government costs us, making unchecked government spending recognized as equally irresponsible and makes it far less acceptable to the American public. The FairTax is the most direct path to healing our nation’s finances.