[robertpaulsen]

"The effective rate is post prebate. On average the effective rate will be 15.5%."

If it is true that the Fair Tax merely replaces the hidden taxes and other tax costs, then the price we pay for goods and services will remain the same. Why is the prebate necessary? I mean, if the poor have the same amount of untaxed disposable income (or government handouts) and if prices remain the same with the Fair Tax added, why the 500 bucks every month?

The poor are paying these hidden taxes today and nobody's crying for them today saying that these hidden taxes are "falling most heavily on the poor who spend a greater share of income". Why the sudden socialistic compassion for "the poor"? To get their vote?

Eliminate the prebate and tout the Fair Tax at 15%. Wouldn't that be more platable to the American people?

[Man50D]

Why is the prebate necessary? I mean, if the poor have the same amount of untaxed disposable income (or government handouts) and if prices remain the same with the Fair Tax added, why the 500 bucks every month?

You are neglecting a very essential point. The prebate is not a handout. It is not intended to pay bills (i.e. rent, food, shelter, clothing). No family could subsist on only the prebate. It is a refund only of taxes paid on those necessities up to the poverty level. It is somewhat similar to a tax refund under the income tax.

The poor are paying these hidden taxes today and nobody's crying for them today saying that these hidden taxes are "falling most heavily on the poor who spend a greater share of income".

Too few people are saying it today for anybody, regardless of economic class, because most people don't realize they exist! As the old adage goes, out of sight out of mind.

[groanup]

The prebate is necessary so nobody, not even Bill Gates, has to pay taxes on the basics of life. Call it a tax free cost zone. In some states no sales taxes are paid on medicine and food. Can you guess why?