Abraham Lincoln said, "Elections belong to the people. It's their decision." Earlier this month, the people made their decision and those they elected must now deal with a widening economic crisis that could escalate into a greater depression than that of the 1930s. The country is facing an annual deficit exceeding $1 trillion, more than 12 million Americans are unemployed and a $494 billion tax increase is scheduled to take effect Jan. 1. In addition, $1.2 trillion in mandatory Budget Control Act spending cuts are scheduled to begin in 2013. As Thomas Paine said, "These are the times that try men's souls."

To some the situation seems hopeless, yet the U.S. has a rich history of rising to the challenge when presented with seemingly insurmountable obstacles. The question is, will we as a citizenry hold our newly elected representatives accountable for finding bold solutions to our serious problems, or will we allow them to continue down their prior path of destructive partisan politics?

There are two areas where immediate solutions must be found: spending and revenue. We leave to others the challenge of controlling government spending.

As to revenues, the FairTax plan is respectfully submitted as the only tax replacement plan ready for immediate implementation and capable of providing the necessary revenue to fund our national government.

With more than 73,000 pages, the current income tax code is a lobbyist's dream, but it's America's nightmare. There are virtually no defenders of the code, save those special interests and their advocates who continue to derive significant benefit from the complexity of a system they helped design.

Yet if one asks the citizens of this country what they think about the current tax code, a question we at Americans for Fair Taxation (AFFT) asked through exhaustive polling and focus groups, you will find an overwhelming majority believe it is too complex, impossible to understand, inefficient, a drag on productivity and grossly unfair.

We have conducted significant market and academic research to discern what the people believe to be an optimum tax system, and the critical elements needed to implement such a system. We found that for a tax system to be advantageous for both the people and the government it must:

1 Be fair, simple and universal in application, containing no exceptions or exclusions.

1 Provide a means for each individual or family to provide essential goods and services free of tax.

1 Foster economic growth and efficiency.

1 Fully fund the government.

HR 25/S13, "The FairTax Act," meets these criteria and more. Reduced to its most basic terms the FairTax eliminates taxes on wages while taxing wealth and borrowing when spent. The FairTax Plan eliminates the current income/payroll tax system, and replaces it with a single rate tax on consumption. Included in the plan is a constitutional amendment HJR 16, which repeals the 16th Amendment, making a federal income tax unconstitutional.

In simplest terms, the FairTax:

1 Taxes consumption instead of production. Employees will take home their gross pay - no more federal tax deductions. All taxes on income are eliminated, including dividend, interest, capital gains, payroll (FICA), business (partnerships, sole proprietors, corporations, MLPs), alternative minimum tax, estate tax, etc.

1 Levels the competitive playing field by providing the same tax rate for imported and domestically produced goods. It removes all taxes on exports, restoring the international competitiveness of American manufacturers in the global marketplace, and is border adjustable, which helps the exportation of U.S. goods and services in the world market at competitive prices.

1 Provides a monthly "prebate" to all households, ensuring each family unit can consume essential goods and services tax-free up to the poverty level. This has the overall effect of making the FairTax progressive in application and especially beneficial for poor and middle class families. For a family of four, the prebate equals $6,960 per year.

1 Is revenue neutral. By removing this revenue neutrality feature and simply using the proposed 23 percent tax rate, the Beacon Hill Institute estimates that had the FairTax been enacted in 2009 and 2010, it would have generated $171 billion more in 2009 and $267 billion more in 2010 in revenues than the income tax. If the revenue neutrality feature is removed, we recommend all incremental revenue increases under the FairTax be dedicated to debt reduction.

In exercising their right to vote, the American people have chosen leaders they feel can best solve our nation's crushing economic problems. They have placed their trust in a president, 435 representatives and 100 senators, asking that they immediately deal with the catastrophic impacts the looming tax increases and Budget Control Act (aka sequestration law) will have on jobs, the economy and their financial security.

Tinkering around the edges and kicking the can down the road are no longer viable options for Congress.

Americans for Fair Taxation. and more than half a million of our supporters. implore President Obama and Senate and House leaders to come together to solve our nation's fiscal crisis. HR25/S13 gives them an immediate revenue and tax reform solution. There are also several spending proposals including Bowles/Simpson, the Ryan Plan, the Joint Committee on Deficit Reduction and the Breaux/Mack commission, which could serve as a platform for reform.

Time is of the essence. Our nation needs a permanent solution now, so that individuals and businesses can begin planning without the shroud of uncertainty and ambiguity that currently envelops our crippled economy. By adopting the FairTax plan, our leaders will have responded to this crisis in a manner that provides a solid foundation for immediate job creation and future economic growth. We, the American people, should be satisfied with nothing less.


Linbeck, of Houston, is CEO and co-founder of Americans for Fair Taxation.