Fair Tax Act would eliminate IRS and establish a 30% federal sales tax
GovTrack.us
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The article fails to recognize that almost no American household spending under $1,600,000 per year on new goods and services will pay the full 23% inclusive/30% exclusive rate as a NET EFFECTIVE RATE. The difference is the offset of a standard deduction produced by the Family Consumption Allowance. No American citizen or registered legal resident alien pays a dime in unreimbursed federal FAIRtax until they spend more than the defined poverty level for their size household. So those in the lowest spending levels from 1–3 x’s poverty level pay the least tax and have a significant increase in purchasing power. The effect of the pre-refund known as a prebate is to eliminate the regressive effect of the tax. As to the “rich” as you like to refer to them, they will also benefit from FAIRtax but at a lower rate. When you take the tax base from 92–118 million workers (many of whom have gone 1099 and are not reporting income like Uber drivers) to a tax base of 300 million consumers (many of whom are foreign visitors, visa holders, illegals and those now in the underground economy who will not get the Family Consumption Allowance) and when you eliminate payroll taxes, income taxes, investment taxes, and the compliance costs associated with those taxes the economy will soar. Please read the fine research of Dr. Laurence Kotlikoff confirming that all households he modeled from $12,000 to $500,000 benefited from FAIRtax. Comparing Average and Marginal Tax Rates under FT and Current- Kotlikoff shows lower average and marginal rates on labor and savings — http://www.nber.org/papers/w11831.pdf

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