What is the Fair Tax?
Posted on Jan 26, 2008 by Paul White
The Fair Tax would be a consumption tax. When you buy items at the store, or go shopping, or fill your car. You pay the price for the item, plus sales tax. If we had a Fair Tax, we would pay for the items, plus local sales tax, plus national sales tax. This would result in a slight increase in just about everything we buy. The benefit would be we are no longer penalized for making money. Money would not be taken out of our pay checks. IF you make $10 / hour and work a 40 hour week, your take home pay is $400. No more withholding for Social security
, or income taxes. The only time you get taxed is when you spend money. This would cause people to be more aware of what they spend, and would be more likely to save money. The FairTax would also do away with deductions. No more claiming the interest on your mortgage. Since people can't deduct the interest they would be more likely to pay off their house. There would also be a Prebate. Any sales tax you pay up to the poverty level you could get back each month. This means those who live at poverty and are legal american citizens pay no taxes. Illegal Aliens would not be able to get these rebates, since they would not be able to prove they are citizens. The result is the more a person or company spends, the more they will pay in taxes. This means if you were able to make a million dollars, and not spend it, you would pay no taxes. The Fair Tax discourages bad spending habbits.
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