[Petronski]

I hope this is a trial balloon.


There are plenty of poor families and middle class families who don't pay any federal tax right now, who would now start paying federal tax. Regardless of what economic sense that might make, when this is explained to the public, they will vote against it.

[Remember_Salamis]

"There are plenty of poor families and middle class families who don't pay any federal tax right now, who would now start paying federal tax."

Not true. They all still pay payroll taxes, 7.65% for the employee's share and 7.65% for the employer's share. Most economists believe the employer's share is taken out of the meployee's paycheck, so in essence they're already paying 15%. The FairTax also gives a rebate to EVERY American family for enough taxes to spend up to the poverty line. The closer you are to the poverty line, the lower your effective tax rate. If you're belwo the poverty line, you have a negative tax rate.

[xrp]

There are plenty of poor families and middle class families who don't pay any federal tax right now

Yes they do. They pay the taxes of the companies from whom they buy their goods and services. The hidden tax.

[ancient_geezer]

There are plenty of poor families and middle class families who don't pay any federal tax right now, who would now start paying federal tax. Regardless of what economic sense that might make, when this is explained to the public, they will vote against it.

 

Under HR25, All legal residents will receive a Family Consumption Allowence (FCA) demogrant, equivalent to the FairTax paid on essential goods and services. The FCA will be paid in advance, in equal installments each month. The size of the monthly FCA will be determined by the government's Poverty Level for a particular family size, multiplied by the tax rate.

Every year, the Department of Health and Human Services [HHS] determine the "poverty level" for each family size.

The 2001 "FairTax" Family Consumption Allowance Figures
Family Size	HHS Poverty Level	Annual FCA	Monthly FCA
One	$8,590	$1,976	$165
Two	$17,180	$3,951	$329
Three	$20,200	$4,646	$387
Four	$23,220	$5,341	$445
Five	$26,240	$6,035	$503
Six	$29,260	$6,730	$561
Seven	$32,280	$7,424	$619
Eight	$35,300	$8,119	$677

1) Federal Register: February 16, 2001, Pages 10695-10697).

[ The monthly FCA for each adult is .23 * (HSS poverty level for a single person)/12 to assure no marriage penalty due to the manner in which the poverty level is dependant on family size. The monthly FCA for each child is .23 * (the incremental increase of HSS poverty level for a family with one child over no child) ] A. Geezer

A family of four, for example, could spend $23,220 per year free of tax because they will have received over the course of the year rebates totaling $5,341. $5,341 is the amount of sales tax paid on $23,220 in expenditures. A family spending double the "poverty level" or $46,440 per year will effectively pay tax on only half of their spending and, therefore, have an effective tax rate of 11 ½ percent or half the FairTax rate.

The beauty of the FairTax is that you can control how much you pay in taxes. If you happen to save, invest or spend a portion on used [previously taxed] items, you can get your effective tax rate below 9%.

To illustrate examine the tax burden that a family of four will have at various annual expenditure levels.

H.R.25 "The FairTax Act