This is a busy month for me and probably for you too, so I will be recycling some of my earlier blogs that you may not have read or you may wish to read again. Have a great Christmas Season!
Everyone will receive a Prebate from the federal government. It will be administered through the Social Security Administration and will be figured for each family residence based on the proverty level for the year as figured by the Dep't. of Health and Human Services.
The chart is shown in the FairTax Basics on their website (http://www.fairtax.org/) As an example, a single mother with one child will receive a monthly prebate of $262; a couple with no children will receive $391 per month; a couple with 4 children will receive $658 per month.
These amounts should cover the amount of tax (23% times your proverty level amount divided by 12) you would pay on new goods and services up to the poverty level. There is also a chart in the FairTax Basics showing your effective FairTax Rate for a family of 4 (2 children) beyond the poverty level income. For instance, if you (family of 4) make $54,760 per year, your effective tax rate would be 11.5%; if you make $109,523 your effective rate would be 17.3%. You would have to make $876,160 in order to pay 22.3% in taxes.
So you see, this is a truly progressive tax. The people at the poverty level are entirely untaxed; the prebate ensures this. And please remember, this is a tax replacement. This tax is designed to generate the same amount of revenue that the present tax system does.
The FairTax is just what it says - Fair. Every citizen who signs up for the prebate will receive it. Sure the rich don't need it, but we need to be fair to all, not to just a chosen few. Otherwise it would be like a glorified welfare system, not a truly fair system of no taxes up to the poverty level. There should be no exceptions and no exemptions in order to keep this tax fair to all.
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The prebate will be about 1/4 of the government budget -- which would be paying the government.
Its just silly as it can possibly be. You can't COUNT this money as revenue to the government -- THE GOVERNMENT PAID IT.
But leaving that alone -- will the prebate pay for the taxes a poor person pays? Really? 250 month? A poor person could pay that much tax on their RENT, because rent is taxed.
And the poor person has to pay CAR insurance. Car insurance is taxed.
And the poor person has to pay for MEDICAL expenses. If you say, well the poor person gets free medical care -- doesnt matter. SOMEONE has to pay that TAX.
Much of the fairtax is a total myth -- its the government, paying the government.
If you understand how silly that is, you understand how silly the fair tax is.
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