Only one candidate running for president espouses the FairTax.

The FairTax would abolish all federal income and payroll taxes: personal federal, corporate federal, gift, estate, capital gains, alternative minimum, Social Security, Medicare and self-employment taxes.

Without Social Security and Medicare taxes, every working American immediately gets a 7.65 percent pay raise. And all employers get a 7.65 percent payroll expense reduction.

Mind you, the FairTax enables the continuation of Social Security and Medicare benefits. The difference is how we pay for those benefits.

The FairTax will replace the Internal Revenue Code with a consumption tax, like the taxes on retail sales that 45 states and the District of Columbia have now. All of us will get a monthly rebate that will reimburse us for taxes on purchases up to the poverty line, so that we’re not taxed on necessities. That means people below the poverty line won’t be taxed at all.

We’ll be taxed on what we decide to buy, not what we happen to earn. We won’t be taxed on what we choose to save or the interest those savings earn. The tax will apply only to new goods, so we can reduce our taxes further by buying a used car or computer.

Some say that the FairTax will increase prices. Not so. With abolition of corporate federal income taxes, companies will be forced to return their tax savings (as much as 39 percent of profits) to remain competitive. Companies will also have their share of abolished payroll taxes (7.65 percent of payroll) to further enhance their competitiveness through commensurate price reductions.

In addition to the 7.65 percent pay raise we receive from the abolition of federal payroll taxes, well get another raise by avoiding as much as 35 percent in federal income taxes. A 42.65 percent pay raise is a beautiful thing. The FairTax, proposed by some as a federal sales tax of 27.5 percent, will certainly take a bite out of our FairTax pay raise, but the net effect will be to dramatically increase our spending power.

But that’s just the beginning of benefits American taxpayers will receive from the FairTax. President Bush has just proposed spending $11.4 billion to operate the IRS in the 2008 budget year. Implementation of the FairTax would certainly reduce that expense by half, or more. And here’s the best part: The IRS has recently identified a $290 billion-a-year tax gap, which it defines as the difference between what the IRS collects and what it should be collecting.

Since the FairTax is collected at the point of purchase, it eliminates the tax gap and should capture that $290 billion for further taxpayer relief.

The FairTax will instantly make American products 12 to 25 percent more competitive because the cost of those goods will no longer be inflated by corporate taxes, costs of tax compliance and Social Security matching payments. When we buy products now, those taxes are built into the cost, so all of us pay corporate taxes indirectly on top of the personal taxes we pay directly.

Compliance costs are just make-work with no real added value, yet they consume as much as 3 percent of our gross domestic product annually. These costs are an especially heavy burden on small businesses, which generate most of our jobs.

Will you get another opportunity to vote for the FairTax? Only John McCain knows.

Bob Bilbrough

Gainesville