John Linder On Neal Boortz CSPAN To Discuss Fair Tax

[Man50D]

The best thing about the fair tax is that you decide when to pay taxes. If they raise the rate too much, cut your taxes by cutting your spending.

Exactly! By doing so the government will collect less taxes and then they will be forced to cut their spending. The Fair Tax will force Congress to keep the tax rate with in modest bounds if they want to maximize the amount they collect. Alexander Hamilton raised this point in his Federalist Paper #21.

[Man50D]

If monthly consumption spending for the household is $1 million, the prebate will have an almost negligible effect on the effective tax rate. On the other hand, for a household with total spending at the poverty level, the prebate makes the effective tax rate zero.

Another important point is the prebate will be far too little for any family to subsist. The total of their monthly bills will far exceed the monthly prebate. Fair Tax naysayers attempt to mislead people by describing this as a government handout implying this will pay for those costs.