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Story 1: When Will Trump Propose A Single Federal Broad-based Consumption Tax or Fair Tax Less To Replace All Federal Taxes — Fair Tax Less Now! — Videos — 

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Rep. Woodall Discusses FairTax on House Floor

FairTax

Published on Feb 6, 2017

FairTax
The FairTax is a proposal to reform the federal tax code of the United States It would replace all federal income taxes including the alternative minimum tax, corporate income taxes, and capital gains taxes, payroll taxes including Social Security and Medicare taxes, gift taxes, and estate taxes with a single broad national consumption tax on retail sales The Fair Tax Act HR 25/S 155 would apply a tax, once, at the point of purchase on all new goods and services for personal consumption The proposal also calls for a monthly payment to all family households of lawful US residents as an advance rebate, or “prebate”, of tax on purchases up to the poverty level12 First introduced into the United States Congress in 1999, a number of congressional committees have heard testimony on the bill; however, it has not moved from committee and has yet to have any effect on the tax system In recent years, a tax reform movement has formed behind the FairTax proposal3 Attention increased after talk radio personality Neal Boortz and Georgia Congressman John Linder published The FairTax Book in 2 FairTax
Click for more; http://www.turkaramamotoru.com/en/fai…
There are excerpts from wikipedia on this article and video

Pence on the Fair Tax

The Fair Tax – It’s Time

Summary: H.R.25 — 115th Congress (2017-2018)All Bill Information (Except Text)

There is one summary for H.R.25. Bill summaries are authored by CRS.

Shown Here:
Introduced in House (01/03/2017)

FairTax Act of 2017

This bill is a tax reform proposal that imposes a national sales tax on the use or consumption in the United States of taxable property or services in lieu of the current income and corporate income tax, employment and self-employment taxes, and estate and gift taxes. The rate of the sales tax will be 23% in 2019, with adjustments to the rate in subsequent years. There are exemptions from the tax for used and intangible property, for property or services purchased for business, export, or investment purposes, and for state government functions.

Under the bill, family members who are lawful U.S. residents receive a monthly sales tax rebate (Family Consumption Allowance) based upon criteria related to family size and poverty guidelines.

The states have the responsibility for administering, collecting, and remitting the sales tax to the Treasury.

Tax revenues are to be allocated among: (1) the general revenue, (2) the old-age and survivors insurance trust fund, (3) the disability insurance trust fund, (4) the hospital insurance trust fund, and (5) the federal supplementary medical insurance trust fund.

No funding is authorized for the operations of the Internal Revenue Service after FY2021.

Finally, the bill terminates the national sales tax if the Sixteenth Amendment to the Constitution (authorizing an income tax) is not repealed within seven years after the enactment of this bill.

https://www.congress.gov/bill/115th-congress/house-bill/25?q=%7B%22search%22%3A%5B%22H.R.25%22%5D%7D&r=1

FairTax

From Wikipedia, the free encyclopedia

The FairTax is a proposal to reform the federal tax code of the United States. It would replace all federal income taxes (including the alternative minimum tax, corporate income taxes, and capital gains taxes), payroll taxes (including Social Security and Medicare taxes), gift taxes, and estate taxes with a single broad national consumption tax on retail sales. The Fair Tax Act (H.R. 25/S. 155) would apply a tax, once, at the point of purchase on all new goods and services for personal consumption. The proposal also calls for a monthly payment to all familyhouseholds of lawful U.S. residents as an advance rebate, or “prebate”, of tax on purchases up to the poverty level.[1][2] First introduced into the United States Congress in 1999, a number of congressional committees have heard testimony on the bill; however, it has not moved from committee and has yet to have any effect on the tax system. In recent years, a tax reform movement has formed behind the FairTax proposal.[3] Attention increased after talk radio personality Neal Boortz and Georgia Congressman John Linder published The FairTax Book in 2005 and additional visibility was gained in the 2008 presidential campaign.

As defined in the proposed legislation, the tax rate is 23% for the first year. This percentage is based on the total amount paid including the tax ($23 out of every $100 spent in total). This would be equivalent to a 30% traditional U.S. sales tax ($23 on top of every $77 spent—$100 total).[4] The rate would automatically adjust annually based on federal receipts in the previous fiscal year.[5] With the rebate taken into consideration, the FairTax would be progressive on consumption,[2] but would also be regressive on income at higher income levels (as consumption falls as a percentage of income).[6][7] Opponents argue this would accordingly decrease the tax burden on high-income earners and increase it on the middle class.[4][8] Supporters contend that the plan would effectively tax wealth, increase purchasing power[9][10] and decrease tax burdens by broadening the tax base.

The plan’s supporters state that a consumption tax would increase savings and investment, ease tax compliance and increase economic growth, increase incentives for international business to locate in the US and increase US competitiveness in international trade.[11][12][13] The plan is intended to increase cost transparency for funding the federal government. Supporters believe it would increase civil liberties, benefit the environment and effectively tax illegal activity and undocumented immigrants.[11][14] Opponents contend that a consumption tax of this size would be extremely difficult to collect, and would lead to pervasive tax evasion.[4][6] They also argue that the proposed sales tax rate would raise less revenue than the current tax system, leading to an increased budget deficit.[4][15] Other concerns include the proposed repeal of the Sixteenth Amendment, removal of tax deduction incentives, transition effects on after-tax savings, incentives on credit use and the loss of tax advantages to state and local bonds.

Legislative overview and history

Rep John Linder holding the 133 page Fair Tax Act of 2007 in contrast to the then-current U.S. tax code and IRS regulations.

The legislation would remove the Internal Revenue Service (after three years), and establish Excise Tax and Sales Tax bureaus in the Department of the Treasury.[16] The states are granted the primary authority for the collection of sales tax revenues and the remittance of such revenues to the Treasury. The plan was created by Americans For Fair Taxation, an advocacy group formed to change the tax system. The group states that, together with economists, it developed the plan and the name “Fair Tax”, based on interviews, polls, and focus groups of the general public.[4] The FairTax legislation has been introduced in the House by Georgia RepublicansJohn Linder (1999–2010) and Rob Woodall (2011–2014),[17] while being introduced in the Senate by Georgia Republican Saxby Chambliss (2003–2014).

Linder first introduced the Fair Tax Act (H.R. 2525) on July 14, 1999, to the 106th United States Congress and a substantially similar bill has been reintroduced in each subsequent session of Congress. The bill attracted a total of 56 House and Senate cosponsors in the 108th Congress,[18][19] 61 in the 109th,[20][21] 76 in the 110th,[22][23] 70 in the 111th,[24][25] 78 in the 112th,[26][27]83 in the 113th (H.R. 25/S. 122), and 81 in the 114th (H.R. 25/S. 155). Former Speaker of the HouseDennis Hastert (Republican) had cosponsored the bill in the 109th–110th Congress, but it has not received support from the Democratic leadership.[21][22][28] Democratic Representative Collin Peterson of Minnesota and Democratic Senator Zell Miller of Georgia cosponsored and introduced the bill in the 108th Congress, but Peterson is no longer cosponsoring the bill and Miller has left the Senate.[18][19] In the 109th–111th Congress, Representative Dan Boren has been the only Democrat to cosponsor the bill.[20][22] A number of congressional committees have heard testimony on the FairTax, but it has not moved from committee since its introduction in 1999. The legislation was also discussed with President George W. Bush and his Secretary of the TreasuryHenry M. Paulson.[29]

To become law, the bill will need to be included in a final version of tax legislation from the U.S. House Committee on Ways and Means, pass both the House and the Senate, and finally be signed by the President. In 2005, President Bush established an advisory panel on tax reform that examined several national sales tax variants including aspects of the FairTax and noted several concerns. These included uncertainties as to the revenue that would be generated, and difficulties of enforcement and administration, which made this type of tax undesirable to recommend in their final report.[8] The panel did not examine the FairTax as proposed in the legislation. The FairTax received visibility in the 2008 presidential election on the issue of taxes and the IRS, with several candidates supporting the bill.[30][31] A poll in 2009 by Rasmussen Reports found that 43% of Americans would support a national sales tax replacement, with 38% opposed to the idea; the sales tax was viewed as fairer by 52% of Republicans, 44% of Democrats, and 49% of unaffiliateds.[32] President Barack Obama does not support the bill,[33]arguing for more progressive changes to the income and payroll tax systems.

Tax rate

The sales tax rate, as defined in the legislation for the first year, is 23% of the total payment including the tax ($23 of every $100 spent in total—calculated similar to income taxes). This would be equivalent to a 30% traditional U.S. sales tax ($23 on top of every $77 spent—$100 total, or $30 on top of every $100 spent—$130 total).[4] After the first year of implementation, this rate is automatically adjusted annually using a predefined formula reflecting actual federal receipts in the previous fiscal year.

The effective tax rate for any household would be variable due to the fixed monthly tax rebate that are used to rebate taxes paid on purchases up to the poverty level.[2] The tax would be levied on all U.S. retail sales for personal consumption on new goods and services. Critics argue that the sales tax rate defined in the legislation would not be revenue neutral (that is, it would collect less for the government than the current tax system), and thus would increase the budget deficit, unless government spending were equally reduced.[4]

Sales tax rate

During the first year of implementation, the FairTax legislation would apply a 23% federal retail sales tax on the total transaction value of a purchase; in other words, consumers pay to the government 23 cents of every dollar spent in total (sometimes called tax-inclusive, and presented this way to provide a direct comparison with individual income and employment taxes which reduce a person’s available money before they can make purchases). The equivalent assessed tax rate is 30% if the FairTax is applied to the pre-tax price of a good like traditional U.S. state sales taxes (sometimes called tax-exclusive; this rate is not directly comparable with existing income and employment taxes).[4] After the first year of implementation, this tax rate would be automatically adjusted annually using a formula specified in the legislation that reflects actual federal receipts in the previous fiscal year.[5]

Effective tax rate

For more details on this topic, see Distribution of the FairTax burden.

A household’s effective tax rate on consumption would vary with the annual expenditures on taxable items and the fixed monthly tax rebate. The rebate would have the greatest effect at low spending levels, where they could lower a household’s effective rate to zero or below.[34] The lowest effective tax rate under the FairTax could be negative due to the rebate for households with annual spending amounts below poverty level spending for a specified household size. At higher spending levels, the rebate has less impact, and a household’s effective tax rate would approach 23% of total spending. A person spending at the poverty level would have an effective tax rate of 0%, whereas someone spending at four times the poverty level would have an effective tax rate of 17.2%.[34] Buying or otherwise receiving items and services not subject to federal taxation (such as a used home or car) can contribute towards a lower effective tax rate. The total amount of spending and the proportion of spending allocated to taxable items would determine a household’s effective tax rate on consumption.[34] If a rate is calculated on income, instead of the tax base, the percentage could exceed the statutory tax rate in a given year.

Monthly tax rebate

Proposed 2015 FairTax Prebate Schedule[35]
One adult household Two adult household
Family
Size
Annual
Consumption
Allowance
Annual
Prebate
Monthly
Prebate
Family
Size
Annual
Consumption
Allowance
Annual
Prebate
Monthly
Prebate
1 person $11,770 $2,707 $226 couple $23,540 $5,414 $451
and 1 child $15,930 $3,664 $305 and 1 child $27,700 $6,371 $531
and 2 children $20,090 $4,621 $385 and 2 children $31,860 $7,328 $611
and 3 children $24,250 $5,578 $465 and 3 children $36,020 $8,285 $690
and 4 children $28,410 $6,534 $545 and 4 children $40,180 $9,241 $770
and 5 children $32,570 $7,491 $624 and 5 children $44,340 $10,198 $850
and 6 children $36,490 $8,393 $699 and 6 children $48,500 $11,155 $930
and 7 children $40,890 $9,405 $784 and 7 children $52,660 $12,112 $1,009
The annual consumption allowance is based on the 2015 DHHS Poverty Guidelines as published in the Federal Register, January 22, 2015. There is no marriage penalty as the couple amount is twice the amount that a single adult receives. For families/households with more than 8 persons, add $4,160 to the annual consumption allowance for each additional person. The annual consumption allowance is the amount of spending that is “untaxed” under the FairTax.

Under the FairTax, familyhouseholds of lawful U.S. residents would be eligible to receive a “Family Consumption Allowance” (FCA) based on family size (regardless of income) that is equal to the estimated total FairTax paid on poverty level spending according to the poverty guidelines published by the U.S. Department of Health and Human Services.[1] The FCA is a tax rebate (known as a “prebate” as it would be an advance) paid in twelve monthly installments, adjusted for inflation. The rebate is meant to eliminate the taxation of household necessities and make the plan progressive.[4] Households would register once a year with their sales tax administering authority, providing the names and social security numbers of each household member.[1] The Social Security Administration would disburse the monthly rebate payments in the form of a paper check via U.S. Mail, an electronic funds transfer to a bank account, or a “smartcard” that can be used like a debit card.[1]

Opponents of the plan criticize this tax rebate due to its costs. Economists at the Beacon Hill Institute estimated the overall rebate cost to be $489 billion (assuming 100% participation).[36] In addition, economist Bruce Bartlett has argued that the rebate would create a large opportunity for fraud,[37] treats children disparately, and would constitute a welfare payment regardless of need.[38]

The President’s Advisory Panel for Federal Tax Reform cited the rebate as one of their chief concerns when analyzing their national sales tax, stating that it would be the largest entitlement program in American history, and contending that it would “make most American families dependent on monthly checks from the federal government”.[8][39] Estimated by the advisory panel at approximately $600 billion, “the Prebate program would cost more than all budgeted spending in 2006 on the Departments of Agriculture, Commerce, Defense, Education, Energy, Homeland Security, Housing and Urban Development, and Interior combined.”[8] Proponents point out that income tax deductions, tax preferences, loopholes, credits, etc. under the current system was estimated at $945 billion by the Joint Committee on Taxation.[36] They argue this is $456 billion more than the FairTax “entitlement” (tax refund) would spend to cover each person’s tax expenses up to the poverty level. In addition, it was estimated for 2005 that the Internal Revenue Service was already sending out $270 billion in refund checks.[36]

Presentation of tax rate[edit]

Mathematically, a 23% tax out of $100 yields approximately the same as a 30% tax on $77.

Sales and income taxes behave differently due to differing definitions of tax base, which can make comparisons between the two confusing. Under the existing individual income plus employment (Social Security; Medicare; Medicaid) tax formula, taxes to be paid are included in the base on which the tax rate is imposed (known as tax-inclusive). If an individual’s gross income is $100 and the sum of their income plus employment tax rate is 23%, taxes owed equals $23. Traditional state sales taxes are imposed on a tax base equal to the pre-tax portion of a good’s price (known as tax-exclusive). A good priced at $77 with a 30% sales tax rate yields $23 in taxes owed. To adjust an inclusive rate to an exclusive rate, divide the given rate by one minus that rate (i.e. {\displaystyle .23/(1-.23)=.23/.77=.30}{\displaystyle .23/(1-.23)=.23/.77=.30}).

The FairTax statutory rate, unlike most U.S. state-level sales taxes, is presented on a tax base that includes the amount of FairTax paid. For example, a final after-tax price of $100 includes $23 of taxes. Although no such requirement is included in the text of the legislation, Congressman John Linder has stated that the FairTax would be implemented as an inclusive tax, which would include the tax in the retail price, not added on at checkout—an item on the shelf for five dollars would be five dollars total.[29][40] The legislation requires the receipt to display the tax as 23% of the total.[41] Linder states the FairTax is presented as a 23% tax rate for easy comparison to income and employment tax rates (the taxes it would be replacing). The plan’s opponents call the semantics deceptive. FactCheck called the presentation misleading, saying that it hides the real truth of the tax rate.[42]Bruce Bartlett stated that polls show tax reform support is extremely sensitive to the proposed rate,[38] and called the presentation confusing and deceptive based on the conventional method of calculating sales taxes.[43] Proponents believe it is both inaccurate and misleading to say that an income tax is 23% and the FairTax is 30% as it implies that the sales tax burden is higher.

Revenue neutrality

A key question surrounding the FairTax is whether the tax has the ability to be revenue-neutral; that is, whether the tax would result in an increase or reduction in overall federal tax revenues. Economists, advisory groups, and political advocacy groups disagree about the tax rate required for the FairTax to be truly revenue-neutral. Various analysts use different assumptions, time-frames, and methods resulting in dramatically different tax rates making direct comparison among the studies difficult. The choice between static or dynamic scoring further complicates any estimate of revenue-neutral rates.[44]

A 2006 study published in Tax Notes by the Beacon Hill Institute at Suffolk University and Dr. Laurence Kotlikoff estimated the FairTax would be revenue-neutral for the tax year 2007 at a rate of 23.82% (31.27% tax-exclusive).[45]The study states that purchasing power is transferred to state and local taxpayers from state and local governments. To recapture the lost revenue, state and local governments would have to raise tax rates or otherwise change tax laws in order to continue collecting the same real revenues from their taxpayers.[39][45] The Argus Group and Arduin, Laffer & Moore Econometrics each published an analysis that defended the 23% rate.[46][47][48] While proponents of the FairTax concede that the above studies did not explicitly account for tax evasion, they also claim that the studies did not altogether ignore tax evasion under the FairTax. These studies presumably incorporated some degree of tax evasion in their calculations by using National Income and Product Account based figures, which is argued to understate total household consumption.[45] The studies also did not account for capital gains that may be realized by the U.S. government if consumer prices were allowed to rise, which would reduce the real value of nominal U.S. government debt.[45] Nor did these studies account for any increased economic growth that many economists researching the plan believe would occur.[45][48][49][50]

In contrast to the above studies, William G. Gale of the Brookings Institution published a study in Tax Notes that estimated a rate of 28.2% (39.3% tax-exclusive) for 2007 assuming full taxpayer compliance and an average rate of 31% (44% tax-exclusive) from 2006 to 2015 (assumes that the Bush tax cuts expire on schedule and accounts for the replacement of an additional $3 trillion collected through the Alternative Minimum Tax).[4][15][51] The study also concluded that if the tax base were eroded by 10% due to tax evasion, tax avoidance, and/or legislative adjustments, the average rate would be 34% (53% tax-exclusive) for the 10-year period. A dynamic analysis in 2008 by the Baker Institute For Public Policy concluded that a 28% (38.9% tax-exclusive) rate would be revenue neutral for 2006.[52] The President’s Advisory Panel for Federal Tax Reform performed a 2006 analysis to replace the individual and corporate income tax with a retail sales tax and estimated the rate to be 25% (34% tax-exclusive) assuming 15% tax evasion, and 33% (49% tax-exclusive) with 30% tax evasion.[8] The rate would need to be substantially higher to replace the additional taxes replaced by the FairTax (payroll, estate, and gift taxes). Several economists criticized the President’s Advisory Panel’s study as having allegedly altered the terms of the FairTax, using unsound methodology, and/or failing to fully explain their calculations.[36][45][53]

Taxable items and exemptions

The tax would be levied once at the final retail sale for personal consumption on new goods and services. Purchases of used items, exports and all business transactions would not be taxed. Also excluded are investments, such as purchases of stock, corporate mergers and acquisitions and capital investments. Savings and education tuition expenses would be exempt as they would be considered an investment (rather than final consumption).[54]

A good would be considered “used” and not taxable if a consumer already owns it before the FairTax takes effect or if the FairTax has been paid previously on the good, which may be different from the item being sold previously. Personal services such as health care, legal services, financial services, and auto repairs would be subject to the FairTax, as would renting apartments and other real property.[4] Food, clothing, prescription drugs and medical services would be taxed. (State sales taxes generally exempt these types of basic-need items in an effort to reduce the tax burden on low-income families. The FairTax would use a monthly rebate system instead of the common state exclusions.) Internet purchases would be taxed, as would retail international purchases (such as a boat or car) that are imported to the United States (collected by the U.S. Customs and Border Protection).[54]

Distribution of tax burden

Boston University study of the FairTax. Lower rates claimed on workers from a larger tax base, replacing regressive taxes, and wealth taxation.

President’s Advisory Panel’s analysis of a hybrid National Sales Tax. Higher rates claimed on the middle-class for an income tax replacement (excludes payroll, estate, and gift taxes replaced under the FairTax).

The FairTax’s effect on the distribution of taxation or tax incidence (the effect on the distribution of economic welfare) is a point of dispute. The plan’s supporters argue that the tax would broaden the tax base, that it would be progressive, and that it would decrease tax burdens and start taxing wealth (reducing the economic gap).[9][55] Opponents argue that a national sales tax would be inherently regressive and would decrease tax burdens paid by high-income individuals.[4][56] A person earning $2 million a year could live well spending $1 million, and as a result pay a mere 11% of that year’s income in taxes.[4] Households at the lower end of the income scale spend almost all their income, while households at the higher end are more likely to devote a portion of income to saving. Therefore, according to economist William G. Gale, the percentage of income taxed is regressive at higher income levels (as consumption falls as a percentage of income).[6]

Income earned and saved would not be taxed until spent under the proposal. Households at the extreme high end of consumption often finance their purchases out of savings, not income.[6][38] Economist Laurence Kotlikoff states that the FairTax could make the tax system much more progressive and generationally equitable,[2] and argues that taxing consumption is effectively the same as taxing wages plus taxing wealth.[2] A household of three persons (this example will use two adults plus one child; the rebate does not consider marital status) spending $30,000 a year on taxable items would devote about 3.4% of total spending ([$6,900 tax minus $5,888 rebate]/$30,000 spending) to the FairTax after the rebate. The same household spending $125,000 on taxable items would spend around 18.3% ([$28,750 tax minus $5,888 rebate]/$125,000 spending) on the FairTax. At higher spending levels, the rebate has less impact and the rate approaches 23% of total spending. Thus, according to economist Laurence Kotlikoff, the effective tax rate is progressive on consumption.[2]

Studies by Kotlikoff and David Rapson state that the FairTax would significantly reduce marginal taxes on work and saving, lowering overall average remaining lifetime tax burdens on current and future workers.[9][57] A study by Kotlikoff and Sabine Jokisch concluded that the long-term effects of the FairTax would reward low-income households with 26.3% more purchasing power, middle-income households with 12.4% more purchasing power, and high-income households with 5% more purchasing power.[10] The Beacon Hill Institute reported that the FairTax would make the federal tax system more progressive and would benefit the average individual in almost all expenditures deciles.[7] In another study, they state the FairTax would offer the broadest tax base (an increase of over $2 trillion), which allows the FairTax to have a lower tax rate than current tax law.[58]

Gale analyzed a national sales tax (though different from the FairTax in several aspects[7][46]) and reported that the overall tax burden on middle-income Americans would increase while the tax burden on the top 1% would drop.[6] A study by the Beacon Hill Institute reported that the FairTax may have a negative effect on the well-being of mid-income earners for several years after implementation.[50] According to the President’s Advisory Panel for Federal Tax Reform report, which compared the individual and corporate income tax (excluding other taxes the FairTax replaces) to a sales tax with rebate,[8][36] the percentage of federal taxes paid by those earning from $15,000–$50,000 would rise from 3.6% to 6.7%, while the burden on those earning more than $200,000 would fall from 53.5% to 45.9%.[8] The report states that the top 5% of earners would see their burden decrease from 58.6% to 37.4%.[8][59] FairTax supporters argue that replacing the regressive payroll tax (a 15.3% total tax not included in the Tax Panel study;[8] payroll taxes include a 12.4% Social Security tax on wages up to $97,500 and a 2.9% Medicare tax, a 15.3% total tax that is often split between employee and employer) greatly changes the tax distribution, and that the FairTax would relieve the tax burden on middle-class workers.[2][53]

Predicted effects

The predicted effects of the FairTax are a source of disagreement among economists and other analysts.[42][43][56] According to Money magazine, while many economists and tax experts support the idea of a consumption tax, many of them view the FairTax proposal as having serious problems with evasion and revenue neutrality.[4] Some economists argue that a consumption tax (the FairTax is one such tax) would have a positive effect on economic growth, incentives for international business to locate in the U.S., and increased U.S. international competitiveness (border tax adjustment in global trade).[11][12][13] The FairTax would be tax-free on mortgage interest (up to a basic interest rate) and donations, but some lawmakers have concerns about losing tax incentives on home ownership and charitable contributions.[60] There is also concern about the effect on the income tax industry and the difficulty of repealing the Sixteenth Amendment (to prevent Congress from re-introducing an income tax).[61]

Economic

For more details on this topic, see Predicted effects of the FairTax § Economic effects.

Americans For Fair Taxation states the FairTax would boost the United States economy and offers a letter signed by eighty economists, including Nobel LaureateVernon L. Smith, that have endorsed the plan.[12] The Beacon Hill Institute estimated that within five years real GDP would increase 10.7% over the current system, domestic investment by 86.3%, capital stock by 9.3%, employment by 9.9%, real wages by 10.2%, and consumption by 1.8%.[50]Arduin, Laffer & Moore Econometrics projected the economy as measured by GDP would be 2.4% higher in the first year and 11.3% higher by the 10th year than it would otherwise be.[48] Economists Laurence Kotlikoff and Sabine Jokisch reported the incentive to work and save would increase; by 2030, the economy’s capital stock would increase by 43.7% over the current system, output by 9.4%, and real wages by 11.5%.[10] Economist John Golob estimates a consumption tax, like the FairTax, would bring long-term interest rates down by 25–35%.[62] An analysis in 2008 by the Baker Institute For Public Policy indicated that the plan would generate significant overall macroeconomic improvement in both the short and long-term, but warned of transitional issues.[52]

FairTax proponents argue that the proposal would provide tax burden visibility and reduce compliance and efficiency costs by 90%, returning a large share of money to the productive economy.[2] The Beacon Hill Institute concluded that the FairTax would save $346.51 billion in administrative costs and would be a much more efficient taxation system.[63]Bill Archer, former head of the House Ways and Means Committee, asked Princeton University Econometrics to survey 500 European and Asian companies regarding the effect on their business decisions if the United States enacted the FairTax. 400 of those companies stated they would build their next plant in the United States, and 100 companies said they would move their corporate headquarters to the United States.[64] Supporters argue that the U.S. has the highest combined statutory corporate income tax rate among OECD countries along with being the only country with no border adjustment element in its tax system.[65][66] Proponents state that because the FairTax eliminates corporate income taxes and is automatically border adjustable, the competitive tax advantage of foreign producers would be eliminated, immediately boosting U.S. competitiveness overseas and at home.[67]

Opponents point to a study commissioned by the National Retail Federation in 2000 that found a national sales tax bill filed by Billy Tauzin, the Individual Tax Freedom Act (H.R. 2717), would bring a three-year decline in the economy, a four-year decline in employment and an eight-year decline in consumer spending.[68]Wall Street Journal columnist James Taranto states the FairTax is unsuited to take advantage of supply-side effects and would create a powerful disincentive to spend money.[56] John Linder states an estimated $11 trillion is held in foreign accounts (largely for tax purposes), which he states would be repatriated back to U.S. banks if the FairTax were enacted, becoming available to U.S. capital markets, bringing down interest rates, and otherwise promoting economic growth in the United States.[11] Attorney Allen Buckley states that a tremendous amount of wealth was already repatriated under law changes in 2004 and 2005.[69] Buckley also argues that if the tax rate was significantly higher, the FairTax would discourage the consumption of new goods and hurt economic growth.[69]

Transition

For more details on this topic, see Predicted effects of the FairTax § Transition effects.

Stability of the Tax Base: A comparison of Personal Consumption Expenditures and Adjusted Gross Income.

During the transition, many or most of the employees of the IRS (105,978 in 2005)[70] would face loss of employment.[45] The Beacon Hill Institute estimate is that the federal government would be able to cut $8 billion from the IRS budget of $11.01 billion (in 2007), reducing the size of federal tax administration by 73%.[45] In addition, income tax preparers (many seasonal), tax lawyers, tax compliance staff in medium-to-large businesses, and software companies which sell tax preparation software could face significant drops, changes, or loss of employment. The bill would maintain the IRS for three years after implementation before completely decommissioning the agency, providing employees time to find other employment.[16]

In the period before the FairTax is implemented, there could be a strong incentive for individuals to buy goods without the sales tax using credit. After the FairTax is in effect, the credit could be paid off using untaxed payroll. If credit incentives do not change, opponents of the FairTax worry it could exacerbate an existing consumer debt problem.[71] Proponents of the FairTax state that this effect could also allow individuals to pay off their existing (pre-FairTax) debt more quickly,[11] and studies suggest lower interest rates after FairTax passage.[62]

Individuals under the current system who accumulated savings from ordinary income (by choosing not to spend their money when the income was earned) paid taxes on that income before it was placed in savings (such as a Roth IRA or CD). When individuals spend above the poverty level with money saved under the current system, that spending would be subject to the FairTax. People living through the transition may find both their earnings and their spending taxed.[72] Critics have stated that the FairTax would result in unfair double taxation for savers and suggest it does not address the transition effect on some taxpayers who have accumulated significant savings from after-tax dollars, especially retirees who have finished their careers and switched to spending down their life savings.[39][72] Supporters of the plan argue that the current system is no different, since compliance costs and “hidden taxes” embedded in the prices of goods and services cause savings to be “taxed” a second time already when spent.[72] The rebate would supplement accrued savings, covering taxes up to the poverty level. The income taxes on capital gains, estates, social security and pension benefits would be eliminated under FairTax. In addition, the FairTax legislation adjusts Social Security benefits for changes in the price level, so a percentage increase in prices would result in an equal percentage increase to Social Security income.[16] Supporters suggest these changes would offset paying the FairTax under transition conditions.[11]

Other indirect effects

The FairTax would be tax free on mortgage interest up to the federal borrowing rate for like-term instruments as determined by the Treasury,[73] but since savings, education, and other investments would be tax free under the plan, the FairTax could decrease the incentive to spend more on homes. An analysis in 2008 by the Baker Institute For Public Policy concluded that the FairTax would have significant transitional issues for the housing sector since the investment would no longer be tax-favored.[52] In a 2007 study, the Beacon Hill Institute concluded that total charitable giving would increase under the FairTax, although increases in giving would not be distributed proportionately amongst the various types of charitable organizations.[74] The FairTax may also affect state and local government debt as the federal income tax system provides tax advantages to municipal bonds.[75]Proponents believe environmental benefits would result from the FairTax through environmental economics and the re-use and re-sale of used goods.[76] Former Senator Mike Gravel states the significant reduction of paperwork for IRS compliance and tax forms is estimated to save about 300,000 trees each year.[76] Advocates argue the FairTax would provide an incentive for illegal immigrants to legalize as they would otherwise not receive the rebate.[1][11] Proponents also believe that the FairTax would have positive effects on civil liberties that are sometimes charged against the income tax system, such as social inequality, economic inequality, financial privacy, self-incrimination, unreasonable search and seizure, burden of proof, and due process.[14][77]

If the FairTax bill were passed, permanent elimination of income taxation would not be guaranteed; the FairTax bill would repeal much of the existing tax code, but the Sixteenth Amendment would remain in place. Preventing new legislation from reintroducing income taxation would require a repeal of the Sixteenth Amendment to the United States Constitution with a separate provision expressly prohibiting a federal income tax.[61] This is referred to as an “aggressive repeal”. Separate income taxes enforced by individual states would be unaffected by the federal repeal. Passing the FairTax would require only a simple majority in each house of the United States Congress along with the signature of the President, whereas enactment of a constitutional amendment must be approved by two thirds of each house of the Congress, and three-quarters of the individual U.S. states. It is therefore possible that passage of the FairTax bill would simply add another taxation system. If a new income tax bill were passed after the FairTax passage, a hybrid system could develop; albeit, there is nothing preventing a bill for a hybrid system today. To address this issue and preclude that possibility, in the 111th Congress John Linder introduced a contingent sunset provision in H.R. 25. It would require the repeal of the Sixteenth Amendment within 8 years after the implementation of the FairTax or, failing that, the FairTax would expire.[78] Critics have also argued that a tax on state government consumption could be unconstitutional.[69]

Changes in the retail economy

Since the FairTax would not tax used goods, the value would be determined by the supply and demand in relation to new goods.[79] The price differential/margins between used and new goods would stay consistent, as the cost and value of used goods are in direct relationship to the cost and value of the new goods. Because the U.S. tax system has a hidden effect on prices, it is expected that moving to the FairTax would decrease production costs from the removal of business taxes and compliance costs, which is predicted to offset a portion of the FairTax effect on prices.[11]

Value of used goods

Since the FairTax would not tax used goods, some critics have argued that this would create a differential between the price of new and used goods, which may take years to equalize.[38] Such a differential would certainly influence the sale of new goods like vehicles and homes. Similarly, some supporters have claimed that this would create an incentive to buy used goods, creating environmental benefits of re-use and re-sale.[76] Conversely, it is argued that like the income tax system that contains embedded tax cost (see Theories of retail pricing),[80] used goods would contain the embedded FairTax cost.[72] While the FairTax would not be applied to the retail sales of used goods, the inherent value of a used good includes the taxes paid when the good was sold at retail. The value is determined by the supply and demand in relation to new goods.[79] The price differential / margins between used and new goods should stay consistent, as the cost and value of used goods are in direct relationship to the cost and value of the new goods.

Theories of retail pricing

A supply and demand diagram illustrating taxes’ effect on prices.

Based on a study conducted by Dale Jorgenson, proponents state that production cost of domestic goods and services could decrease by approximately 22% on average after embedded tax costs are removed, leaving the sale nearly the same after taxes. The study concludes that producer prices would drop between 15% and 26% (depending on the type of good/service).[81] Jorgenson’s research included all income and payroll taxes in the embedded tax estimation, which assumes employee take-home pay (net income) remains unchanged from pre-FairTax levels.[4][82] Price and wage changes after the FairTax would largely depend on the response of the Federal Reserve monetary authorities.[29][38][83] Non-accommodation of the money supply would suggest retail prices and take home pay stay the same—embedded taxes are replaced by the FairTax. Full accommodation would suggest prices and incomes rise by the exclusive rate (i.e., 30%)—embedded taxes become windfall gains. Partial accommodation would suggest a varying degree in-between.[29][83]

If businesses provided employees with gross pay (including income tax withholding and the employee share of payroll taxes),[45]Arduin, Laffer & Moore Econometrics estimated production costs could decrease by a minimum of 11.55% (partial accommodation).[48] This reduction would be from the removal of the remaining embedded costs, including corporate taxes, compliance costs, and the employer share of payroll taxes. This decrease would offset a portion of the FairTax amount reflected in retail prices, which proponents suggest as the most likely scenario.[29] Bruce Bartlett states that it is unlikely that nominal wages would be reduced, which he believes would result in a recession, but that the Federal Reserve would likely increase the money supply to accommodate price increases.[38] David Tuerck states “The monetary authorities would have to consider how the degree of accommodation, varying from none to full, would affect the overall economy and how it would affect the well-being of various groups such as retirees.”[83]

Social Security benefits would be adjusted for any price changes due to FairTax implementation.[16] The Beacon Hill Institute states that it would not matter, apart from transition issues, whether prices fall or rise—the relative tax burden and tax rate remains the same.[45] Decreases in production cost would not fully apply to imported products; so according to proponents, it would provide tax advantages for domestic production and increase U.S. competitiveness in global trade (see Border adjustability). To ease the transition, U.S. retailers will receive a tax credit equal to the FairTax on their inventory to allow for quick cost reduction. Retailers would also receive an administrative fee equal to the greater of $200 or 0.25% of the remitted tax as compensation for compliance costs,[84] which amounts to around $5 billion.

Effects on tax code compliance

One avenue for non-compliance is the black market. FairTax supporters state that the black market is largely untaxed under the current tax system. Economists estimate the underground economy in the United States to be between one and three trillion dollars annually.[85][86] By imposing a sales tax, supporters argue that black market activity would be taxed when proceeds from such activity are spent on legal consumption.[87] For example, the sale of illegal narcotics would remain untaxed (instead of being guilty of income tax evasion, drug dealers would be guilty of failing to submit sales tax), but they would face taxation when they used drug proceeds to buy consumer goods such as food, clothing, and cars. By taxing this previously untaxed money, FairTax supporters argue that non-filers would be paying part of their share of what would otherwise be uncollected income and payroll taxes.[11][88]

Other economists and analysts have argued that the underground economy would continue to bear the same tax burden as before.[13][87][88][89] They state that replacing the current tax system with a consumption tax would not change the tax revenue generated from the underground economy—while illicit income is not taxed directly, spending of income from illicit activity results in business income and wages that are taxed.[13][87][88]

Tax compliance and evasion

“No, No! Not That Way”—Political cartoon from 1933 commenting on a general sales tax over an income tax.

Proponents state the FairTax would reduce the number of tax filers by about 86% (from 100 million to 14 million) and reduce the filing complexity to a simplified state sales tax form.[53] The Government Accountability Office (GAO), among others, have specifically identified the negative relationship between compliance costs and the number of focal points for collection.[90]Under the FairTax, the federal government would be able to concentrate tax enforcement efforts on a single tax. Retailers would receive an administrative fee equal to the greater of $200 or 0.25% of the remitted tax as compensation for compliance costs.[84] In addition, supporters state that the overwhelming majority of purchases occur in major retail outlets, which are very unlikely to evade the FairTax and risk losing their business licenses.[45] Economic Census figures for 2002 show that 48.5% of merchandise sales are made by just 688 businesses (“Big-Box” retailers). 85.7% of all retail sales are made by 92,334 businesses, which is 3.6% of American companies. In the service sector, approximately 80% of sales are made by 1.2% of U.S. businesses.[29]

The FairTax is a national tax, but can be administered by the states rather than a federal agency,[91] which may have a bearing on compliance as the states’ own agencies could monitor and audit businesses within that state. The 0.25% retained by the states amounts to $5 billion the states would have available for enforcement and administration. For example, California should receive over $500 million for enforcement and administration, which is more than the $327 million budget for the state’s sales and excise taxes.[92] Because the federal money paid to the states would be a percentage of the total revenue collected, John Linder claims the states would have an incentive to maximize collections.[11] Proponents believe that states that choose to conform to the federal tax base would have advantages in enforcement, information sharing, and clear interstate revenue allocation rules.[90][91] A study by the Beacon Hill Institute concluded that, on average, states could more than halve their sales tax rates and that state economies would benefit greatly from adopting a state-level FairTax.[90]

FairTax opponents state that compliance decreases when taxes are not automatically withheld from citizens, and that massive tax evasion could result by collecting at just one point in the economic system.[38] Compliance rates can also fall when taxed entities, rather than a third party, self-report their tax liability. For example, ordinary personal income taxes can be automatically withheld and are reported to the government by a third party. Taxes without withholding and with self-reporting, such as the FairTax, can see higher evasion rates. Economist Jane Gravelle of the Congressional Research Service found studies showing that evasion rates of sales taxes are often above 10%, even when the sales tax rate is in the single digits.[88] Tax publications by the Organisation for Economic Co-operation and Development (OECD), IMF, and Brookings Institution have suggested that the upper limit for a sales tax is about 10% before incentives for evasion become too great to control.[38] According to the GAO, 80% of state tax officials opposed a national sales tax as an intrusion on their tax base.[38] Opponents also raise concerns of legal tax avoidance by spending and consuming outside of the U.S. (imported goods would be subject to collection by the U.S. Customs and Border Protection).[93]

Economists from the University of Tennessee concluded that while there would be many desirable macroeconomic effects, adoption of a national retail sales tax would also have serious effects on state and local government finances.[94] Economist Bruce Bartlett stated that if the states did not conform to the FairTax, they would have massive confusion and complication as to what is taxed by the state and what is taxed by the federal government.[38]In addition, sales taxes have long exempted all but a few services because of the enormous difficulty in taxing intangibles—Bartlett suggests that the state may not have sufficient incentive to enforce the tax.[43]University of Michigan economist Joel Slemrod argues that states would face significant issues in enforcing the tax. “Even at an average rate of around five percent, state sales taxes are difficult to administer.”[95] University of Virginia School of Law professor George Yin states that the FairTax could have evasion issues with export and import transactions.[39] The President’s Advisory Panel for Federal Tax Reform reported that if the federal government were to cease taxing income, states might choose to shift their revenue-raising to income.[8] Absent the Internal Revenue Service, it would be more difficult for the states to maintain viable income tax systems.[8][94]

Underground economy

Opponents of the FairTax argue that imposing a national retail sales tax would drive transactions underground and create a vast underground economy.[4] Under a retail sales tax system, the purchase of intermediate goods and services that are factors of production are not taxed, since those goods would produce a final retail good that would be taxed. Individuals and businesses may be able to manipulate the tax system by claiming that purchases are for intermediate goods, when in fact they are final purchases that should be taxed. Proponents point out that a business is required to have a registered seller’s certificate on file, and must keep complete records of all transactions for six years. Businesses must also record all taxable goods bought for seven years. They are required to report these sales every month (see Personal vs. business purchases).[41] The government could also stipulate that all retail sellers provide buyers with a written receipt, regardless of transaction type (cash, credit, etc.), which would create a paper trail for evasion with risk of having the buyer turn them in (the FairTax authorizes a reward for reporting tax cheats).[53]

While many economists and tax experts support a consumption tax, problems could arise with using a retail sales tax rather than a value added tax (VAT).[4][38] A VAT imposes a tax on the value added at every intermediate step of production, so the goods reach the final consumer with much of the tax already in the price.[96] The retail seller has little incentive to conceal retail sales, since he has already paid much of the good’s tax. Retailers are unlikely to subsidize the consumer’s tax evasion by concealing sales. In contrast, a retailer has paid no tax on goods under a sales tax system. This provides an incentive for retailers to conceal sales and engage in “tax arbitrage” by sharing some of the illicit tax savings with the final consumer. Citing evasion, Tim Worstall wrote in Forbes that Europe’s 20-25% consumption taxes simply would not work if they were a sales tax: that’s why they’re all a VAT.[96]Laurence Kotlikoff has stated that the government could compel firms to report, via 1099-type forms, their sales to other firms, which would provide the same records that arise under a VAT.[53] In the United States, a general sales tax is imposed in 45 states plus the District of Columbia (accounting for over 97% of both population and economic output), which proponents argue provides a large infrastructure for taxing sales that many countries do not have.

Personal versus business purchases

Businesses would be required to submit monthly or quarterly reports (depending on sales volume) of taxable sales and sales tax collected on their monthly sales tax return. During audits, the business would have to produce invoices for the “business purchases” that they did not pay sales tax on, and would have to be able to show that they were genuine business expenses.[41] Advocates state the significant 86% reduction in collection points would greatly increase the likelihood of business audits, making tax evasion behavior much more risky.[53] Additionally, the FairTax legislation has several fines and penalties for non-compliance, and authorizes a mechanism for reporting tax cheats to obtain a reward.[41] To prevent businesses from purchasing everything for their employees, in a family business for example, goods and services bought by the business for the employees that are not strictly for business use would be taxable.[41] Health insurance or medical expenses would be an example where the business would have to pay the FairTax on these purchases. Taxable property and services purchased by a qualified non-profit or religious organization “for business purposes” would not be taxable.[97]

FairTax movement

A FairTax rally in Orlando, Florida on July 28, 2006.

The creation of the FairTax began with a group of businessmen from Houston, Texas, who initially financed what has become the political advocacy group Americans For Fair Taxation (AFFT), which has grown into a large tax reform movement.[3][29] This organization, founded in 1994, claims to have spent over $20 million in research, marketing, lobbying, and organizing efforts over a ten-year period and is seeking to raise over $100 million more to promote the plan.[98] AFFT includes a staff in Houston and a large group of volunteers who are working to get the FairTax enacted.

In 2007 Bruce Bartlett said the FairTax was devised by the Church of Scientology in the early 1990s,[43] drawing comparisons between the tax policy and religious doctrine from the faith, whose creation myth holds that an evil alien ruler known as Xenu “used phony tax inspections as a guise for destroying his enemies.”[99] Representative John Linder told the Atlanta Journal-Constitution that Bartlett confused the FairTax movement with the Scientology-affiliated Citizens for an Alternative Tax System,[100] which also seeks to abolish the federal income tax and replace it with a national retail sales tax. Leo Linbeck, AFFT Chairman and CEO, stated “As a founder of Americans For Fair Taxation, I can state categorically, however, that Scientology played no role in the founding, research or crafting of the legislation giving expression to the FairTax.”[98]

Much support has been achieved by talk radio personality Neal Boortz.[101] Boortz’s book (co-authored by Georgia Congressman John Linder) entitled The FairTax Book, explains the proposal and spent time atop the New York Times Best Seller list. Boortz stated that he donates his share of the proceeds to charity to promote the book.[101] In addition, Boortz and Linder have organized several FairTax rallies to publicize support for the plan. Other media personalities have also assisted in growing grassroots support including former radio and TV talk show host Larry Elder, radio host and former candidate for the 2012 GOP Presidential Nomination Herman Cain, Fox News and radio host Sean Hannity, and Fox Business Host John Stossel.[102] The FairTax received additional visibility as one of the issues in the 2008 presidential election. At a debate on June 30, 2007, several Republican candidates were asked about their position on the FairTax and many responded that they would sign the bill into law if elected.[30] The most vocal promoters of the FairTax during the 2008 primary elections were Republican candidate Mike Huckabee and Democratic candidate Mike Gravel. The Internet, blogosphere, and electronic mailing lists have contributed to promoting, organizing, and gaining support for the FairTax. In the 2012 Republican presidential primary, and his ensuing Libertarian Party presidential run, former Governor of New Mexico and businessman Gary Johnson actively campaigned for the FairTax.[103] Former CEO of Godfather’s PizzaHerman Cain has been promoting the FairTax as a final step in a multiple-phase tax reform.[104] Outside of the United States, the Christian Heritage Party of Canada adopted a FairTax proposal as part of their 2011 election platform[105] but won no seats in that election.

Supporters in Congress

Congressional FairTax Supporters as of June 2016 – click arrows to sort
Branch State District Party First Last Since Notes
Senate Texas Republican Ted Cruz [106][107]
Senate Oklahoma Republican James Inhofe 2015 [106][107]
Senate Georgia Republican Johnny Isakson 2015 [106][107]
Senate Oklahoma Republican James Lankford 2015 [106][107]
Senate Kansas Republican Jerry Moran 2015 [106][107]
Senate Georgia Republican David Perdue 2015 [106][107]
Senate Kansas Republican Pat Roberts 2015 [106][107]
House Florida 12 Republican Gus Bilirakis 2015 [106][107]
House Utah 1 Republican Rob Bishop 2015 [106][107]
House Tennessee 7 Republican Marsha Blackburn 2015 [106][107]
House Texas 8 Republican Kevin Brady 2015 [106][107]
House Virginia 7 Republican Dave Brat 2015 [106][107]
House Oklahoma 1 Republican Jim Bridenstine 2015 [106][107]
House Alabama 5 Republican Mo Brooks 2015 [106][107]
House Georgia 1 Republican Earl Carter 2015 [106][107]
House Texas 31 Republican John Carter 2015 [106][107]
House Ohio 1 Republican Steve Chabot 2015 [106][107]
House Georgia 9 Republican Doug Collins 2015 [106][107]
House Texas 11 Republican Michael Conaway 2015 [106][107]
House Florida 4 Republican Ander Crenshaw 2015 [106][107]
House Texas 7 Republican John Culberson 2015 [106][107]
House Florida 6 Republican Ron DeSantis 2015 [106][107]
House Tennessee 4 Republican Scott DesJarlais 2015 [106][107]
House South Carolina 3 Republican Jeff Duncan 2015 [106][107]
House Tennessee 2 Republican John Duncan 2015 [106][107]
House Minnesota 6 Republican Tom Emmer 2015 [106][107]
House Texas 27 Republican Blake Farenthold 2015 [106][107]
House Texas 17 Republican Bill Flores 2015 [106][107]
House North Carolina 5 Republican Virginia Foxx 2015 [106][107]
House Arizona 8 Republican Trent Franks 2015 [106][107]
House New Jersey 5 Republican Scott Garrett 2015 [106][107]
House Texas 12 Republican Kay Granger 2015 [106][107]
House Missouri 6 Republican Sam Graves 2015 [106][107]
House Georgia 14 Republican Tom Graves 2015 [106][107]
House Nevada 4 Republican Cresent Hardy 2015 [106][107]
House Maryland 1 Republican Andy Harris 2015 [106][107]
House Texas 5 Republican Jeb Hensarling 2015 [106][107]
House Georgia 10 Republican Jody Hice 2015 [106][107]
House Kansas 1 Republican Tim Huelskamp 2015 [106][107]
House California 49 Republican Darrell Issa 2015 [106][107]
House Kansas 2 Republican Lynn Jenkins 2015 [106][107]
House Iowa 4 Republican Steve King 2015 [106][107]
House Minnesota 2 Republican John Kline 2015 [106][107]
House Missouri 7 Republican Billy Long 2015 [106][107]
House Georgia 11 Republican Barry Loudermilk 2015 [106][107]
House Oklahoma 3 Republican Frank Lucas 2015 [106][107]
House Texas 24 Republican Kenny Marchant 2015 [106][107]
House Kentucky 4 Republican Thomas Massie 2015 [106][107]
House Texas 10 Republican Michael McCaul 2015 [106][107]
House California 4 Republican Tom McClintock 2015 [106][107]
House North Carolina 11 Republican Mark Meadows 2015 [106][107]
House Florida 7 Republican John Mica 2015 [106][107]
House Florida 1 Republican Jeff Miller 2015 [106][107]
House Oklahoma 2 Republican Markwayne Mullin 2015 [106][107]
House Texas 19 Republican Randy Neugebauer 2015 [106][107]
House Florida 11 Republican Richard Nugent 2015 [106][107]
House Texas 22 Republican Pete Olson 2015 [106][107]
House Alabama 6 Republican Gary Palmer 2015 [106][107]
House New Mexico 2 Republican Stevan Pearce 2015 [106][107]
House Texas 2 Republican Ted Poe 2015 [106][107]
House Kansas 4 Republican Mike Pompeo 2015 [106][107]
House Florida 8 Republican Bill Posey 2015 [106][107]
House Georgia 6 Republican Tom Price 2015 [106][107]
House Texas 4 Republican John Ratcliffe 2015 [106][107]
House Virginia 2 Republican Scott Rigell 2015 [106][107]
House Tennessee 1 Republican David Roe 2015 [106][107]
House Florida 17 Republican Thomas Rooney 2015 [106][107]
House Florida 15 Republican Dennis Ross 2015 [106][107]
House Oklahoma 5 Republican Steve Russell 2015 [106][107]
House Arizona 5 Republican Matt Salmon 2015 [106][107]
House South Carolina 1 Republican Mark Sanford 2015 [106][107]
House Missouri 8 Republican Jason Smith 2015 [106][107]
House Indiana 3 Republican Marlin Stutzman 2015 [106][107]
House Texas 13 Republican Mac Thornberry 2015 [106][107]
House Michigan 7 Republican Tim Walberg 2015 [106][107]
House Georgia 3 Republican Lynn Westmoreland 2015 [106][107]
House Virginia 1 Republican Robert Wittman 2015 [106][107]
House Kansas 3 Republican Kevin Yoder 2015 [106][107]
House Florida 3 Republican Ted Yoho 2015 [106][107]
House Alaska Republican Don Young 2015 [106][107]
House Georgia 7 Republican Rob Woodall [107][108]

See also

https://en.wikipedia.org/wiki/FairTax

Story 2: Obama’s Last Job’s Report: U-3 Unemployment Rate 4.8%, U-6 Unemployment Rate 9.4%, Labor Participation Rate 62.9% and Number of Unemployed Americans 7,635,000  — Videos

Civilian Labor Force Level

159,716,000

 

Series Id:           LNS11000000
Seasonally Adjusted
Series title:        (Seas) Civilian Labor Force Level
Labor force status:  Civilian labor force
Type of data:        Number in thousands
Age:                 16 years and over

Download:
Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Annual
2000 142267(1) 142456 142434 142751 142388 142591 142278 142514 142518 142622 142962 143248
2001 143800 143701 143924 143569 143318 143357 143654 143284 143989 144086 144240 144305
2002 143883 144653 144481 144725 144938 144808 144803 145009 145552 145314 145041 145066
2003 145937(1) 146100 146022 146474 146500 147056 146485 146445 146530 146716 147000 146729
2004 146842(1) 146709 146944 146850 147065 147460 147692 147564 147415 147793 148162 148059
2005 148029(1) 148364 148391 148926 149261 149238 149432 149779 149954 150001 150065 150030
2006 150214(1) 150641 150813 150881 151069 151354 151377 151716 151662 152041 152406 152732
2007 153144(1) 152983 153051 152435 152670 153041 153054 152749 153414 153183 153835 153918
2008 154063(1) 153653 153908 153769 154303 154313 154469 154641 154570 154876 154639 154655
2009 154210(1) 154538 154133 154509 154747 154716 154502 154307 153827 153784 153878 153111
2010 153484(1) 153694 153954 154622 154091 153616 153691 154086 153975 153635 154125 153650
2011 153263(1) 153214 153376 153543 153479 153346 153288 153760 154131 153961 154128 153995
2012 154381(1) 154671 154749 154545 154866 155083 154948 154763 155160 155554 155338 155628
2013 155695(1) 155268 154990 155356 155514 155747 155669 155587 155731 154709 155328 155151
2014 155295(1) 155485 156115 155378 155559 155682 156098 156117 156100 156389 156421 156238
2015 157022(1) 156771 156781 157043 157447 156993 157125 157109 156809 157123 157358 157957
2016 158362(1) 158888 159278 158938 158510 158889 159295 159508 159830 159643 159456 159640
2017 159716(1)
1 : Data affected by changes in population controls.

Civilian Labor Participation Rate

62.9%

Series Id:           LNS11300000
Seasonally Adjusted
Series title:        (Seas) Labor Force Participation Rate
Labor force status:  Civilian labor force participation rate
Type of data:        Percent or rate
Age:                 16 years and over

Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Annual
2000 67.3 67.3 67.3 67.3 67.1 67.1 66.9 66.9 66.9 66.8 66.9 67.0
2001 67.2 67.1 67.2 66.9 66.7 66.7 66.8 66.5 66.8 66.7 66.7 66.7
2002 66.5 66.8 66.6 66.7 66.7 66.6 66.5 66.6 66.7 66.6 66.4 66.3
2003 66.4 66.4 66.3 66.4 66.4 66.5 66.2 66.1 66.1 66.1 66.1 65.9
2004 66.1 66.0 66.0 65.9 66.0 66.1 66.1 66.0 65.8 65.9 66.0 65.9
2005 65.8 65.9 65.9 66.1 66.1 66.1 66.1 66.2 66.1 66.1 66.0 66.0
2006 66.0 66.1 66.2 66.1 66.1 66.2 66.1 66.2 66.1 66.2 66.3 66.4
2007 66.4 66.3 66.2 65.9 66.0 66.0 66.0 65.8 66.0 65.8 66.0 66.0
2008 66.2 66.0 66.1 65.9 66.1 66.1 66.1 66.1 66.0 66.0 65.9 65.8
2009 65.7 65.8 65.6 65.7 65.7 65.7 65.5 65.4 65.1 65.0 65.0 64.6
2010 64.8 64.9 64.9 65.2 64.9 64.6 64.6 64.7 64.6 64.4 64.6 64.3
2011 64.2 64.1 64.2 64.2 64.1 64.0 64.0 64.1 64.2 64.1 64.1 64.0
2012 63.7 63.8 63.8 63.7 63.7 63.8 63.7 63.5 63.6 63.8 63.6 63.7
2013 63.6 63.4 63.3 63.4 63.4 63.4 63.3 63.3 63.3 62.8 63.0 62.9
2014 62.9 62.9 63.1 62.8 62.8 62.8 62.9 62.9 62.8 62.9 62.9 62.7
2015 62.9 62.7 62.7 62.8 62.9 62.6 62.6 62.6 62.4 62.5 62.5 62.7
2016 62.7 62.9 63.0 62.8 62.6 62.7 62.8 62.8 62.9 62.8 62.6 62.7
2017 62.9

Employment Level

152,081,000

 

Series Id:           LNS12000000
Seasonally Adjusted
Series title:        (Seas) Employment Level
Labor force status:  Employed
Type of data:        Number in thousands
Age:                 16 years and over

Download:
Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Annual
2000 136559(1) 136598 136701 137270 136630 136940 136531 136662 136893 137088 137322 137614
2001 137778 137612 137783 137299 137092 136873 137071 136241 136846 136392 136238 136047
2002 135701 136438 136177 136126 136539 136415 136413 136705 137302 137008 136521 136426
2003 137417(1) 137482 137434 137633 137544 137790 137474 137549 137609 137984 138424 138411
2004 138472(1) 138542 138453 138680 138852 139174 139556 139573 139487 139732 140231 140125
2005 140245(1) 140385 140654 141254 141609 141714 142026 142434 142401 142548 142499 142752
2006 143150(1) 143457 143741 143761 144089 144353 144202 144625 144815 145314 145534 145970
2007 146028(1) 146057 146320 145586 145903 146063 145905 145682 146244 145946 146595 146273
2008 146378(1) 146156 146086 146132 145908 145737 145532 145203 145076 144802 144100 143369
2009 142152(1) 141640 140707 140656 140248 140009 139901 139492 138818 138432 138659 138013
2010 138438(1) 138581 138751 139297 139241 139141 139179 139438 139396 139119 139044 139301
2011 139250(1) 139394 139639 139586 139624 139384 139524 139942 140183 140368 140826 140902
2012 141584(1) 141858 142036 141899 142206 142391 142292 142291 143044 143431 143333 143330
2013 143225(1) 143315 143319 143603 143856 144006 144318 144304 144466 143577 144536 144741
2014 145055(1) 145102 145715 145673 145819 146222 146461 146501 146845 147426 147361 147521
2015 148061(1) 148108 148244 148522 148792 148742 148890 149092 148932 149255 149419 150030
2016 150533(1) 151043 151301 151028 151058 151090 151546 151655 151926 151902 152048 152111
2017 152081(1)
1 : Data affected by changes in population controls.
Series Id:           LNS13327709
Seasonally Adjusted
Series title:        (seas) Total unemployed, plus all marginally attached workers plus total employed part time for economic reasons, as a percent of all civilian labor force plus all marginally attached workers
Labor force status:  Aggregated totals unemployed
Type of data:        Percent or rate
Age:                 16 years and over
Percent/rates:       Unemployed and mrg attached and pt for econ reas as percent of labor force plus marg attached

Download:
Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Annual
2000 7.1 7.2 7.1 6.9 7.1 7.0 7.0 7.1 7.0 6.8 7.1 6.9
2001 7.3 7.4 7.3 7.4 7.5 7.9 7.8 8.1 8.7 9.3 9.4 9.6
2002 9.5 9.5 9.4 9.7 9.5 9.5 9.6 9.6 9.6 9.6 9.7 9.8
2003 10.0 10.2 10.0 10.2 10.1 10.3 10.3 10.1 10.4 10.2 10.0 9.8
2004 9.9 9.7 10.0 9.6 9.6 9.5 9.5 9.4 9.4 9.7 9.4 9.2
2005 9.3 9.3 9.1 8.9 8.9 9.0 8.8 8.9 9.0 8.7 8.7 8.6
2006 8.4 8.4 8.2 8.1 8.2 8.4 8.5 8.4 8.0 8.2 8.1 7.9
2007 8.4 8.2 8.0 8.2 8.2 8.3 8.4 8.4 8.4 8.4 8.4 8.8
2008 9.2 9.0 9.1 9.2 9.7 10.1 10.5 10.8 11.0 11.8 12.6 13.6
2009 14.2 15.2 15.8 15.9 16.5 16.5 16.4 16.7 16.7 17.1 17.1 17.1
2010 16.7 17.0 17.1 17.1 16.6 16.4 16.4 16.5 16.8 16.6 16.9 16.6
2011 16.2 16.0 15.9 16.1 15.8 16.1 15.9 16.1 16.4 15.8 15.5 15.2
2012 15.2 15.0 14.5 14.6 14.7 14.8 14.8 14.6 14.8 14.4 14.4 14.4
2013 14.5 14.4 13.8 14.0 13.8 14.2 13.8 13.6 13.7 13.6 13.1 13.1
2014 12.7 12.6 12.6 12.3 12.1 12.0 12.2 12.0 11.8 11.5 11.4 11.2
2015 11.3 11.0 10.9 10.8 10.7 10.5 10.3 10.2 10.0 9.8 9.9 9.9
2016 9.9 9.8 9.8 9.7 9.7 9.6 9.7 9.7 9.7 9.5 9.3 9.2
2017 9.4

Unemployment Level

7,635,000

Series Id:           LNS13000000
Seasonally Adjusted
Series title:        (Seas) Unemployment Level
Labor force status:  Unemployed
Type of data:        Number in thousands
Age:                 16 years and over

Download:
Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Annual
2000 5708 5858 5733 5481 5758 5651 5747 5853 5625 5534 5639 5634
2001 6023 6089 6141 6271 6226 6484 6583 7042 7142 7694 8003 8258
2002 8182 8215 8304 8599 8399 8393 8390 8304 8251 8307 8520 8640
2003 8520 8618 8588 8842 8957 9266 9011 8896 8921 8732 8576 8317
2004 8370 8167 8491 8170 8212 8286 8136 7990 7927 8061 7932 7934
2005 7784 7980 7737 7672 7651 7524 7406 7345 7553 7453 7566 7279
2006 7064 7184 7072 7120 6980 7001 7175 7091 6847 6727 6872 6762
2007 7116 6927 6731 6850 6766 6979 7149 7067 7170 7237 7240 7645
2008 7685 7497 7822 7637 8395 8575 8937 9438 9494 10074 10538 11286
2009 12058 12898 13426 13853 14499 14707 14601 14814 15009 15352 15219 15098
2010 15046 15113 15202 15325 14849 14474 14512 14648 14579 14516 15081 14348
2011 14013 13820 13737 13957 13855 13962 13763 13818 13948 13594 13302 13093
2012 12797 12813 12713 12646 12660 12692 12656 12471 12115 12124 12005 12298
2013 12470 11954 11672 11752 11657 11741 11350 11284 11264 11133 10792 10410
2014 10240 10383 10400 9705 9740 9460 9637 9616 9255 8964 9060 8718
2015 8962 8663 8538 8521 8655 8251 8235 8017 7877 7869 7939 7927
2016 7829 7845 7977 7910 7451 7799 7749 7853 7904 7740 7409 7529
2017 7635

Employment Situation Summary Table A. Household data, seasonally adjusted

HOUSEHOLD DATA
Summary table A. Household data, seasonally adjusted
[Numbers in thousands]
Category Jan.
2016
Nov.
2016
Dec.
2016
Jan.
2017
Change from:
Dec.
2016-
Jan.
2017

Employment status

Civilian noninstitutional population

252,397 254,540 254,742 254,082

Civilian labor force

158,362 159,456 159,640 159,716

Participation rate

62.7 62.6 62.7 62.9

Employed

150,533 152,048 152,111 152,081

Employment-population ratio

59.6 59.7 59.7 59.9

Unemployed

7,829 7,409 7,529 7,635

Unemployment rate

4.9 4.6 4.7 4.8

Not in labor force

94,036 95,084 95,102 94,366

Unemployment rates

Total, 16 years and over

4.9 4.6 4.7 4.8

Adult men (20 years and over)

4.5 4.3 4.4 4.4

Adult women (20 years and over)

4.6 4.2 4.3 4.4

Teenagers (16 to 19 years)

16.0 15.2 14.7 15.0

White

4.3 4.2 4.3 4.3

Black or African American

8.8 8.0 7.8 7.7

Asian

3.7 3.0 2.6 3.7

Hispanic or Latino ethnicity

5.9 5.7 5.9 5.9

Total, 25 years and over

4.1 3.9 3.9 3.9

Less than a high school diploma

7.4 7.9 7.9 7.7

High school graduates, no college

5.3 4.9 5.1 5.3

Some college or associate degree

4.2 3.9 3.8 3.8

Bachelor’s degree and higher

2.5 2.3 2.5 2.5

Reason for unemployment

Job losers and persons who completed temporary jobs

3,686 3,542 3,639 3,713

Job leavers

768 934 905 862

Reentrants

2,458 2,266 2,219 2,170

New entrants

834 728 783 813

Duration of unemployment

Less than 5 weeks

2,257 2,415 2,379 2,468

5 to 14 weeks

2,287 2,133 2,156 2,089

15 to 26 weeks

1,140 1,073 1,199 1,192

27 weeks and over

2,094 1,856 1,831 1,850

Employed persons at work part time

Part time for economic reasons

6,035 5,659 5,598 5,840

Slack work or business conditions

3,582 3,485 3,401 3,583

Could only find part-time work

2,133 1,902 1,873 1,944

Part time for noneconomic reasons

20,301 21,059 21,251 20,487

Persons not in the labor force (not seasonally adjusted)

Marginally attached to the labor force

2,089 1,932 1,684 1,752

Discouraged workers

623 591 426 532

– December – January changes in household data are not shown due to the introduction of updated population controls.
NOTE: Persons whose ethnicity is identified as Hispanic or Latino may be of any race. Detail for the seasonally adjusted data shown in this table will not necessarily add to totals because of the independent seasonal adjustment of the various series. Updated population controls are introduced annually with the release of January data.

 

Employment Situation Summary Table B. Establishment data, seasonally adjusted

ESTABLISHMENT DATA
Summary table B. Establishment data, seasonally adjusted
Category Jan.
2016
Nov.
2016
Dec.
2016(p)
Jan.
2017(p)

EMPLOYMENT BY SELECTED INDUSTRY
(Over-the-month change, in thousands)

Total nonfarm

126 164 157 227

Total private

110 178 165 237

Goods-producing

24 35 15 45

Mining and logging

-15 7 2 4

Construction

11 28 2 36

Manufacturing

28 0 11 5

Durable goods(1)

18 3 12 6

Motor vehicles and parts

8.4 1.4 3.1 3.3

Nondurable goods

10 -3 -1 -1

Private service-providing

86 143 150 192

Wholesale trade

3.0 5.6 1.2 3.0

Retail trade

40.4 -12.9 33.5 45.9

Transportation and warehousing

-13.9 21.8 19.3 -4.0

Utilities

-0.7 0.3 0.4 -0.6

Information

1 -12 -4 3

Financial activities

19 12 23 32

Professional and business services(1)

-5 46 32 39

Temporary help services

-43.2 25.5 -12.8 14.8

Education and health services(1)

16 31 45 24

Health care and social assistance

32.7 28.2 44.1 32.1

Leisure and hospitality

30 44 17 34

Other services

-4 7 -17 16

Government

16 -14 -8 -10

(3-month average change, in thousands)

Total nonfarm

212 179 148 183

Total private

196 178 158 193

WOMEN AND PRODUCTION AND NONSUPERVISORY EMPLOYEES
AS A PERCENT OF ALL EMPLOYEES(2)

Total nonfarm women employees

49.4 49.6 49.6 49.5

Total private women employees

48.0 48.2 48.2 48.1

Total private production and nonsupervisory employees

82.4 82.3 82.4 82.4

HOURS AND EARNINGS
ALL EMPLOYEES

Total private

Average weekly hours

34.6 34.3 34.4 34.4

Average hourly earnings

$25.37 $25.91 $25.97 $26.00

Average weekly earnings

$877.80 $888.71 $893.37 $894.40

Index of aggregate weekly hours (2007=100)(3)

105.2 105.8 106.2 106.4

Over-the-month percent change

0.4 -0.1 0.4 0.2

Index of aggregate weekly payrolls (2007=100)(4)

127.5 131.0 131.9 132.3

Over-the-month percent change

0.8 -0.2 0.7 0.3

DIFFUSION INDEX
(Over 1-month span)(5)

Total private (261 industries)

58.8 51.5 61.5 58.8

Manufacturing (78 industries)

60.3 48.7 55.1 48.1

Footnotes
(1) Includes other industries, not shown separately.
(2) Data relate to production employees in mining and logging and manufacturing, construction employees in construction, and nonsupervisory employees in the service-providing industries.
(3) The indexes of aggregate weekly hours are calculated by dividing the current month’s estimates of aggregate hours by the corresponding annual average aggregate hours.
(4) The indexes of aggregate weekly payrolls are calculated by dividing the current month’s estimates of aggregate weekly payrolls by the corresponding annual average aggregate weekly payrolls.
(5) Figures are the percent of industries with employment increasing plus one-half of the industries with unchanged employment, where 50 percent indicates an equal balance between industries with increasing and decreasing employment.
(p) Preliminary

NOTE: Data have been revised to reflect March 2016 benchmark levels and updated seasonal adjustment factors.

Employment Situation Summary

Transmission of material in this release is embargoed until                  USDL-17-0141
8:30 a.m. (EST) Friday, February 3, 2017

Technical information:
 Household data:       (202) 691-6378  *  cpsinfo@bls.gov  *  www.bls.gov/cps
 Establishment data:   (202) 691-6555  *  cesinfo@bls.gov  *  www.bls.gov/ces

Media contact:         (202) 691-5902  *  PressOffice@bls.gov


                      THE EMPLOYMENT SITUATION -- JANUARY 2017


Total nonfarm payroll employment increased by 227,000 in January, and the unemployment
rate was little changed at 4.8 percent, the U.S. Bureau of Labor Statistics reported
today. Job gains occurred in retail trade, construction, and financial activities. 

    _____________________________________________________________________
   |                                                                     |
   |             Changes to The Employment Situation Data                |
   |                                                                     |
   |Establishment survey data have been revised as a result of the annual|
   |benchmarking process and the updating of seasonal adjustment factors |
   |using an improved methodology to select models. Also, household      |
   |survey data for January 2017 reflect updated population estimates.   |
   |See the notes at the end of this news release for more information   |
   |about these changes.                                                 |
   |_____________________________________________________________________|


Household Survey Data

Both the number of unemployed persons, at 7.6 million, and the unemployment rate, at
4.8 percent, were little changed in January. (See table A-1. For information about
annual population adjustments to the household survey estimates, see the notes at
the end of this news release and tables B and C.)

Among the major worker groups, the unemployment rate for Asians (3.7 percent) increased
in January. The jobless rates for adult men (4.4 percent), adult women (4.4 percent),
teenagers (15.0 percent), Whites (4.3 percent), Blacks (7.7 percent), and Hispanics 
(5.9 percent) showed little or no change over the month. (See tables A-1, A-2, and A-3.)

In January, the number of long-term unemployed (those jobless for 27 weeks or more)
was essentially unchanged at 1.9 million and accounted for 24.4 percent of the
unemployed. Over the year, the number of long-term unemployed has declined by 244,000.
(See table A-12.)

After accounting for the annual adjustments to the population controls, the civilian
labor force increased by 584,000 in January, and the labor force participation rate
rose by 0.2 percentage point to 62.9 percent. Total employment, as measured by the
household survey, was up by 457,000 over the month, and the employment-population
ratio edged up to 59.9 percent. (See table A-1. For additional information about the
effects of the population adjustments, see table C.)

The number of persons employed part time for economic reasons (sometimes referred to
as involuntary part-time workers) was little changed in January at 5.8 million. These
individuals, who would have preferred full-time employment, were working part time
because their hours had been cut back or because they were unable to find full-time
jobs. (See table A-8.)

In January, 1.8 million persons were marginally attached to the labor force, down by
337,000 from a year earlier. (The data are not seasonally adjusted.) These individuals
were not in the labor force, wanted and were available for work, and had looked for a
job sometime in the prior 12 months. They were not counted as unemployed because they
had not searched for work in the 4 weeks preceding the survey. (See table A-16.)

Among the marginally attached, there were 532,000 discouraged workers in January, little
changed from a year earlier. (The data are not seasonally adjusted.) Discouraged workers
are persons not currently looking for work because they believe no jobs are available
for them. The remaining 1.2 million persons marginally attached to the labor force in
January had not searched for work for reasons such as school attendance or family
responsibilities. (See table A-16.)

Establishment Survey Data

Total nonfarm payroll employment rose by 227,000 in January. Employment increased in
retail trade, construction, and financial activities. (See table B-1. For information
about the annual benchmark process, see the notes at the end of this news release and
table A.)

Retail trade employment increased by 46,000 over the month and by 229,000 over the
year. Three industries added jobs in January--clothing and clothing accessories
stores (+18,000), electronics and appliance stores (+8,000), and furniture and home
furnishings stores (+6,000).

Employment in construction rose by 36,000 in January, following little change in
December. Residential building added 9,000 jobs over the month, and employment
continued to trend up among residential specialty trade contractors (+11,000). Over
the past 12 months, construction has added 170,000 jobs.

Financial activities added 32,000 jobs in January, with gains in real estate (+10,000),
insurance carriers and related activities (+9,000), and credit intermediation and
related activities (+9,000). Financial activities added an average of 15,000 jobs per
month in 2016.

In January, employment in professional and technical services rose by 23,000, about in
line with the average monthly gain in 2016. Over the month, job gains occurred in
computer systems design and related services (+13,000).

Employment in food services and drinking places continued to trend up in January
(+30,000). This industry added 286,000 jobs over the past 12 months.

Employment in health care also continued to trend up in January (+18,000), following a
gain of 41,000 in December. The industry has added 374,000 jobs over the past 12 months.

Employment in other major industries, including mining and logging, manufacturing,
wholesale trade, transportation and warehousing, information, and government, showed
little change over the month.

The average workweek for all employees on private nonfarm payrolls was unchanged at
34.4 hours in January. In manufacturing, the workweek edged up by 0.1 hour to 40.8
hours, while overtime edged down by 0.1 hour to 3.2 hours. The average workweek for
production and nonsupervisory employees on private nonfarm payrolls was 33.6 hours
for the sixth consecutive month. (See tables B-2 and B-7.)

In January, average hourly earnings for all employees on private nonfarm payrolls rose
by 3 cents to $26.00, following a 6-cent increase in December. Over the year, average
hourly earnings have risen by 2.5 percent. In January, average hourly earnings of
private-sector production and nonsupervisory employees increased by 4 cents to $21.84.
(See tables B-3 and B-8.)

The change in total nonfarm payroll employment for November was revised down from
+204,000 to +164,000, and the change for December was revised up from +156,000 to
+157,000. With these revisions, employment gains in November and December combined
were 39,000 lower than previously reported. Monthly revisions result from additional
reports received from businesses since the last published estimates and from the
recalculation of seasonal factors. The annual benchmark process also contributed to
the November and December revisions. Over the past 3 months, job gains have averaged
183,000 per month.

_____________
The Employment Situation for February is scheduled to be released on Friday,
March 10, 2017, at 8:30 a.m. (EST).


                          Revisions to Establishment Survey Data

In accordance with annual practice, the establishment survey data released today have
been benchmarked to reflect comprehensive counts of payroll jobs for March 2016. These
counts are derived principally from the Quarterly Census of Employment and Wages (QCEW),
which counts jobs covered by the Unemployment Insurance (UI) tax system. The benchmark
process results in revisions to not seasonally adjusted data from April 2015 forward. 
Seasonally adjusted data from January 2012 forward are subject to revision. In addition,
data for some series prior to 2012, both seasonally adjusted and unadjusted, incorporate
other revisions.

The total nonfarm employment level for March 2016 was revised downward by 60,000
(-81,000 on a not seasonally adjusted basis, or -0.1 percent). On a not seasonally
adjusted basis, the absolute average benchmark revision over the past 10 years is
0.3 percent.

The effect of these revisions on the underlying trend in nonfarm payroll employment
was minor. For example, the over-the-year change in total nonfarm employment for 2016
was revised from 2,157,000 to 2,242,000 (seasonally adjusted). Table A presents
revised total nonfarm employment data on a seasonally adjusted basis from January to
December 2016.

All revised historical establishment survey data are available on the BLS website
at www.bls.gov/ces/data.htm. In addition, an article that discusses the benchmark
and post-benchmark revisions and other technical issues is available at
www.bls.gov/web/empsit/cesbmart.htm.


Table A. Revisions in total nonfarm employment, January-December 2016, seasonally
adjusted
(Numbers in thousands)
________________________________________________________________________________________
                  |                                    |                                
                  |                Level               |      Over-the-month change     
                  |---------------------------------------------------------------------
  Year and month  |    As     |           |            |    As    |         |           
                  |previously |    As     | Difference |previously|   As    | Difference
                  |published  |  revised  |            |published | revised |           
----------------------------------------------------------------------------------------
                  |           |           |            |          |         |           
          2016    |           |           |            |          |         |           
                  |           |           |            |          |         |           
 January..........|  143,314  |  143,211  |    -103    |    168   |    126  |     -42   
 February.........|  143,547  |  143,448  |     -99    |    233   |    237  |       4   
 March............|  143,733  |  143,673  |     -60    |    186   |    225  |      39   
 April............|  143,877  |  143,826  |     -51    |    144   |    153  |       9   
 May..............|  143,901  |  143,869  |     -32    |     24   |     43  |      19   
 June.............|  144,172  |  144,166  |      -6    |    271   |    297  |      26   
 July.............|  144,424  |  144,457  |      33    |    252   |    291  |      39   
 August...........|  144,600  |  144,633  |      33    |    176   |    176  |       0   
 September........|  144,808  |  144,882  |      74    |    208   |    249  |      41   
 October..........|  144,943  |  145,006  |      63    |    135   |    124  |     -11   
 November.........|  145,147  |  145,170  |      23    |    204   |    164  |     -40   
 December (p).....|  145,303  |  145,327  |      24    |    156   |    157  |       1   
________________________________________________________________________________________

    p = preliminary.


                Adjustments to Population Estimates for the Household Survey

Effective with data for January 2017, updated population estimates were incorported into
the household survey. Population estimates for the household survey are developed by the
U.S. Census Bureau. Each year, the Census Bureau updates the estimates to reflect new
information and assumptions about the growth of the population since the previous
decennial census. The change in population reflected in the new estimates results from
adjustments for net international migration, updated vital statistics, and estimation
methodology improvements.

In accordance with usual practice, BLS will not revise the official household survey
estimates for December 2016 and earlier months. To show the impact of the population
adjustments, however, differences in selected December 2016 labor force series based on
the old and new population estimates are shown in table B.

The adjustments decreased the estimated size of December's civilian noninstitutional
population by 831,000, the civilian labor force by 508,000, employment by 487,000, and
unemployment by 21,000. The number of persons not in the labor force was lowered
by 323,000. The unemployment rate, employment-population ratio, and labor force
participation rate were unaffected.

Data users are cautioned that these annual population adjustments can affect the
comparability of household data series over time. Table C shows the effect of the
introduction of new population estimates on the comparison of selected labor force
measures between December 2016 and January 2017. Additional information on the
population adjustments and their effect on national labor force estimates is
available at www.bls.gov/web/empsit/cps-pop-control-adjustments.pdf.


Table B. Effect of the updated population controls on December 2016 estimates by sex,
race, and Hispanic or Latino ethnicity, not seasonally adjusted
(Numbers in thousands)
______________________________________________________________________________________
                              |      |     |      |       |        |      |           
                              |      |     |      |       |  Black |      |           
                              |      |     |      |       |    or  |      |  Hispanic 
            Category          |Total | Men | Women| White | African| Asian| or Latino 
                              |      |     |      |       |American|      | ethnicity 
                              |      |     |      |       |        |      |           
______________________________|______|_____|______|_______|________|______|___________
                              |      |     |      |       |        |      |           
  Civilian noninstitutional   |      |     |      |       |        |      |           
   population.................| -831 |-403 | -428 | -469  |  -76   | -258 |    -352   
    Civilian labor force......| -508 |-272 | -236 | -277  |  -44   | -168 |    -244   
      Participation rate......|  0.0 | 0.0 |  0.0 |  0.0  |  0.0   |  0.0 |     0.0   
     Employed.................| -487 |-260 | -227 | -264  |  -41   | -164 |    -230   
      Employment-population   |      |     |      |       |        |      |           
       ratio..................|  0.0 | 0.0 |  0.0 |  0.0  |  0.0   | -0.1 |     0.0   
     Unemployed...............|  -21 | -12 |   -9 |  -13  |   -3   |   -4 |     -14   
      Unemployment rate.......|  0.0 | 0.0 |  0.0 |  0.0  |  0.0   |  0.0 |     0.0   
    Not in labor force........| -323 |-131 | -192 | -192  |  -34   |  -90 |    -109   
______________________________________________________________________________________

   NOTE:  Detail may not sum to totals because of rounding. Estimates for the above
race groups (White, Black or African American, and Asian) do not sum to totals because
data are not presented for all races. Persons whose ethnicity is identified as Hispanic
or Latino may be of any race.


Table C. December 2016-January 2017 changes in selected labor force measures,
with adjustments for population control effects
(Numbers in thousands)
______________________________________________________________________________
                                       |           |            |             
                                       |           |            |  Dec.-Jan.  
                                       | Dec.-Jan. |    2017    |   change,   
                                       |  change,  | population |   after     
                Category               |    as     |   control  | removing the
                                       | published |   effect   |  population 
                                       |           |            |   control   
                                       |           |            |  effect (1) 
_______________________________________|___________|____________|_____________
                                       |           |            |             
  Civilian noninstitutional population.|   -660    |   -831     |      171    
    Civilian labor force...............|     76    |   -508     |      584    
      Participation rate...............|    0.2    |    0.0     |      0.2    
     Employed..........................|    -30    |   -487     |      457    
      Employment-population ratio......|    0.2    |    0.0     |      0.2    
     Unemployed........................|    106    |    -21     |      127    
      Unemployment rate................|    0.1    |    0.0     |      0.1    
    Not in labor force.................|   -736    |   -323     |     -413    
______________________________________________________________________________
                                                                              
   1 This Dec.-Jan. change is calculated by subtracting the population 
control effect from the over-the-month change in the published seasonally
adjusted estimates.
   NOTE: Detail may not sum to totals because of rounding.



 

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