Repeal the entire federal income and payroll tax system. All corporate and individual income taxes, payroll taxes, self-employment, AMT, capital gains, estate and gift taxes are eliminated. Without pay-check withholding, gross income becomes net income.

Eliminate the IRS. No federal income tax return means no more crushing compliance burden of $265 billion per year, an amount representing 3% of the GDP and 17% of the tax collected - the equivalent of two Iraq wars annually.

Replace current tax system with a revenue-neutral retail sales tax on all new goods and services for personal consumption. This sales tax of 23 cents of each dollar spent will fund all current federal benefits and expenditures, including Social Security and Medicare, from the more stable and expanding tax base of consumption. Everyone pays a consumption tax, even those who now evade taxes which costs the IRS $350 billion annually.

Reduce prices of U.S. products by 12 to 30% by removing the embedded costs of the current tax system. Therefore, when the FairTax is applied, most retail prices are approximately what they are now.

Prebate monthly, to every citizen with a valid Social Security number, an amount equal to the sales tax on purchases up to the poverty level. In this way, no American pays tax on the purchase of basic necessities. In 2007 this would be $207 per month for a single adult and $516 for a family of four.

Make American goods competitive once again. By eliminating embedded tax costs it reverses the outflow of jobs and reduces our payment imbalance. The U.S. once more becomes the world’s lowest cost producer and experiences tremendous economic growth.

Restore freedom and privacy to all American citizens. The FairTax removes the federal government from the citizens’ personal finances and allows all Americans to control the amount of tax they pay by their purchase decisions.

http://investment-blog.net/the-viable-alternatives-for-the-latest-obama-tax-cut/