The Truth About the Fair Tax

Thanks to all of you who are getting refunds this year.
We taxpayers appreciate the interest-free use of your money!
If you had not over-paid your taxes, then the Treasury
Department would have had to issue debt instruments and pay
interest.
The income tax - as you know - is taken out before
you get it. The Fair Tax is different. You decide when you
will pay it. There is no April 15 or IRS or 16th Amendment.
There are no tax forms or deadlines. If you are paid
$3,000/month, then your pay will be $3,000 (minus the state's
tax if not FL, TX, etc).
You still have to pay taxes - some things never change! When
you decide to buy something new, you will pay a 23% sales tax
in addition to the purchase price. That sounds really bad,
and critics only talk about this aspect. What they fail to
tell you is the Fair Tax replaces the Federal income tax, FICA
Social Security and FICA Medicare. Corporations will pay
nothing! If you have a poverty-level income, then you will pay
no tax at all, and you may get money back if you are frugal.
The Fair Tax will encourage saving and discourage wasteful
spending. The "rich" will continue to pay most of the tax.
What is the prebate? If your poverty-level income is
$36,000/year, then the Federal government will send you a monthly
check for $690 or $8280/year. If you spend less than $36,000,
then you will receive more than you are taxed. Every taxpayer
gets a check - even Bill Gates!
Look at a hypothetical example for a family of 4 with an income of
$36,000/year, and assume that the poverty level for a family of 4
is $36,000. Also assume no state income tax. The family paycheck
each month will be $3,000. The prebate check will be $690 each
month. The family has $3,690/month to spend. Assume they spend
$3,690/month including the sales tax. Their tax burden is $0.
What if they only spend $2,000 + 23% ($2,460)? They will still
get $3,690/month, so they will have $1,230 to save or invest.
What if they spend $4,000 + 23% ($4,920)? They will have to take
$1,230 from savings to make up the difference.
The current system actually encourages waste. The poor may have
trouble affording a car and the tax on it. They are forced to shop
for groceries and necessities at high-priced "convenience stores."
The Fair Tax will encourage frugality and savings.
Note that the 23% sales tax is only on NEW items. There is no tax
on used goods.
Politicians do not like the Fair Tax. Much of their power comes
from bribing us to do things their way. We subsidize the Real
Estate industry with mortgage tax deductions and first-time home
buyer tax credits. We subsidize the auto industry with
"Cash-for-Clunkers" tax credits. The list goes on for thousands
of pages of IRS code. We structure our lives according to the IRS
code - much of it not voted on by the people's representatives in
Congress.