...illegal immigrants, they would not get that monthly payment, but would have to pay the 23% on everything new they purchased.And how long would that last? They were not supposed to get Welfare, Medicare, or Social Security, either.
Why have a prebate in the first place?
If you can determine what the essentials are well enough to prebate back the 1/12 of the poverty line amount in taxes paid on them each month, you can damn well exempt the essentials entirely and do away with the entire bureaucracy needed to issue prebates and track the position, presence/affiliation, and bank account numbers of every American citizen on at least a monthly basis.
Or is the whole deal just not going to sell unless you can give the impression that the government is giving away money?
If that is the case, it is part of the problem (the Government giving away our money), and doing more of it is not the solution.
If you can determine what the essentials are well enough to prebate back the 1/12 of the poverty line amount in taxes paid on them each month, you can damn well exempt the essentials entirely
There are two problems with exemptions:
1. The more income a person has the more they tend to spend including necessities. Consequently wealthier people tend to spend more on these items than poorer people. The result being the wealthy would benefit more from exemptions.
2. Exemptions exist thanks to the thousands of lobbyists who distort the tax code. Exempting certain items will cause lobbyists in other industries to demand exemptions. In the end many items at the very least would be exempt.
Fair Tax FAQ #4