The rich people who already paid taxes before putting their take home pay in their savings, will have to pay tax on it again when the FairTax is passed, at the register. Poor people who have no savings will only be spending money they made from which no withholdings were taken.
Middle class people will be able to get interest on their savings, without paying income tax on the interest, so it compounds faster. They still pay tax when they buy stuff in retirement, but this way they get to make the money in time for retirement.
No social security or any other withholdings would come out of your pay check. You only pay tax when you buy stuff.
Because we have a spectrum of old and young people, the revenue will still be constant. Income goes up and down, as does income tax revenue. Sales tax is a combo of savings, loans, and income, and is much smoother, so government budgets can be planned.
You only pay the tax on NEW stuff. The 23% figure is based on that. No tax on used stuff. Poor people often buy used cars and used houses. No tax on your rent, since the owner already paid tax when buying the house. Currently, the income you use to pay rent was already taxed, and only rich people who can buy houses can write off the house interest. Not fair. So pick the FairTax.
Many rich people don't pay taxes, or pay little. Now they would pay taxes when they buy stuff, making the tax percent spread evenly around.
And you get a monthly pre-bate auto-deposited into your checking account equal to tax on spending up to the poverty line, which can be adjusted by politicians, along with the percentage rage.
Currently, you got a deduction on tax day of about $8,000, and then graduated tax tables. But you lost 8% to social security.
If the poverty line is $12,000 per year for a single person, and the tax rate is 25%, then they pay you $3000 per year in monthly pre-payments so you are covered for the $3000 in tax you would pay at the register that year.
Don't think $12,000 is enough? Tell your representative to vote for a higher poverty line. Think 25% is too high or too low? Tell your representative to change it, or vote accordingly on election day.
Never have to file taxes again.
Politicians will have to focus on HOW to spend taxes, instead of on how to trick us into thinking they made someone else besides you pay them.
Middle class people will be able to get interest on their savings, without paying income tax on the interest, so it compounds faster. They still pay tax when they buy stuff in retirement, but this way they get to make the money in time for retirement.
No social security or any other withholdings would come out of your pay check. You only pay tax when you buy stuff.
Because we have a spectrum of old and young people, the revenue will still be constant. Income goes up and down, as does income tax revenue. Sales tax is a combo of savings, loans, and income, and is much smoother, so government budgets can be planned.
You only pay the tax on NEW stuff. The 23% figure is based on that. No tax on used stuff. Poor people often buy used cars and used houses. No tax on your rent, since the owner already paid tax when buying the house. Currently, the income you use to pay rent was already taxed, and only rich people who can buy houses can write off the house interest. Not fair. So pick the FairTax.
Many rich people don't pay taxes, or pay little. Now they would pay taxes when they buy stuff, making the tax percent spread evenly around.
And you get a monthly pre-bate auto-deposited into your checking account equal to tax on spending up to the poverty line, which can be adjusted by politicians, along with the percentage rage.
Currently, you got a deduction on tax day of about $8,000, and then graduated tax tables. But you lost 8% to social security.
If the poverty line is $12,000 per year for a single person, and the tax rate is 25%, then they pay you $3000 per year in monthly pre-payments so you are covered for the $3000 in tax you would pay at the register that year.
Don't think $12,000 is enough? Tell your representative to vote for a higher poverty line. Think 25% is too high or too low? Tell your representative to change it, or vote accordingly on election day.
Never have to file taxes again.
Politicians will have to focus on HOW to spend taxes, instead of on how to trick us into thinking they made someone else besides you pay them.