Answers to FairTax Questions

There are a lot of misconceptions and misunderstandings regarding the FairTax plan. In this article we’ll try to address some of the more common ones.

Is Healthcare taxed? Are mortgages taxed? Is food and water taxed?

Yes, products and services are taxed, but only at the retail level. All the embedded taxes that we are currently paying are removed from the system under the FairTax plan. Rather than prices increasing it is estimated that they will remain at about the same level because the taxes currently being collected by each member of the supply chain no longer exist.

How does the prebate work?

The prebate insures that no one pays any taxes on spending up to the poverty level. Meaning if poverty level income for a family of four is $22,000 then they will be ‘pre-imbursed’ for the taxes they will pay on spending up to that amount. Now, instead of simply not having to pay income taxes they also do not have Social Security, unemployment, and all the other withholding taxes subtracted from their paychecks before they ever see them.

Will we lose the Mortgage Interest Deduction?

The Mortgage Interest Deduction is an income tax deduction, but under the FairTax plan you’re no longer paying taxes on income so there’s no need for a deduction. Additionally, the FairTax only taxes newly constructed homes. Pre-existing home sales are not taxed. And additionally again, when you purchase a home under the current system your dollars have already been taxed. Under the FairTax plan you will receive all of your paycheck up front enabling you to save a bigger down payment in a shorter amount of time, and thus reducing your mortgage payment.

People will just stop spending and there will be no tax revenue.

People will not stop spending. In fact, when we compare our Personal Consumption Expenditures to our Adjusted Gross Income we discover that spending is a much more consistent and reliable measure. When times are good, people spend. When times are tough, people spend. Those of us living paycheck to paycheck may cut back on our discretionary spending, but those who have money continue to spend and some even increase their spending when there are bargains to be had.

What else is in the FairTax?

Lots of things but here’s one more thing to consider. There are millions of tourists and visitors who come to our country every year. Under the present system they contribute nothing in the way of federal revenue, but under the FairTax plan every dollar they spend will be a donation to our federal tax coffers.

Read the Bill (H.R. 25); read the books. Educate yourself. Passing and implementing the FairTax plan could, in one fell swoop, correct the direction of this country and remedy many of our growing problems. It’s fair, transparent, and simple. It’s everything our government doesn’t want so it’s up to us to understand it and insist upon its passage.

For more information and answers to questions about the FairTax plan visit www.FairTax.org.

Exemptions and Exclusions under the FairTax

What’s going to keep tax exemptions and exclusions from undermining the FairTax system?

That’s a fair question. The goal of the FairTax system is to tax everyone fairly. The same tax will apply to everyone and the few exemptions and exclusions that are written into the bill will apply to everyone, as well. Because of this transparency any attempt to tinker with the tax code will also effect everyone. Lawmakers will no longer be able to use the tax code to divide and conquer the people of this country by excluding or exempting certain groups from paying certain taxes, or heaping additional taxes onto specific groups. Because the tax is collected at the retail level at the point of consumption it applies across the board and the power to manipulate the code, and thus the people, simply goes away. Will it be possible for politicians to tinker with the FairTax? Only if we, as a people, let them.

FairTax Plan is Straight Up American

Like so many others I try my hardest to keep up with the important issues and current events of the day. But, with all the demands that work, family and community place on our time it’s near to impossible to actually keep up. I sometimes suspect that we are all too busy to remain fully informed by design, but that’s a political conspiracy theory I’ll save for another day.

I’ve come to realize, though, that by trying to keep up with every issue I am not truly keeping up with any. While I may be somewhat familiar with the issues surrounding border security and immigration, terrorism and terrorists, tax reform, the economy, the environment, our health, our military conflicts, education, the oil spill in the gulf, and the ongoing tragedy of Lindsay Lohan, just to name a few, I can not hope to become and remain fully informed on all of them. So, what’s a voter to do?

I have decided that for the time being and for the foreseeable future I’m going to pick one as my primary issue. I’ll still follow the other important issues, of course, but my primary issue will be my focus. And, this primary issue is going to be tax reform, or more specifically the FairTax.

The November elections will soon be upon us and all the candidates will march about saying all the things they think we want to hear. Their position on most issues is predictable. No candidate is going to come out against border security, or for terrorism. Their positions on most issues will differ only by degrees and approach.

But, the issue of the FairTax is a line in the sand. The FairTax specifically proposes the abolishment of the federal income tax, and its replacement with a national consumption tax. American citizens, tourists, immigrants, anyone who spends money in America at the retail level will contribute to our national coffers. We determine how much tax we pay by how much we spend, and everyone pays the same percentage amount. The government’s ability to control the Country by manipulating the tax code goes away. And, any political candidate who supports handing the reins of the Country back over to the citizens of the Country by passing and enacting the FairTax is worthy of serious consideration.

I chose this as my primary issue because I am convinced that passing the FairTax plan is the single most important step we can take in preserving this republic of the United States of America. Our politicians and our government have become corrupt beyond reason and they will not correct themselves. Only by forcing them to relinquish their power to manipulate the flow of money can we hope to find equilibrium.

This is not to say that the other issues we face are not equally important, but I believe the FairTax is our best chance of returning our Country to prosperity through government by the people.

So, in the coming months we will be looking more closely at the FairTax plan and how it is meant to work. We will also look into the political candidates who support it or don’t support, as well as those who merely claim to support it as a bid for your vote.

If you want to learn more about the FairTax I urge you to visit the Americans for Fair Taxation Web site at www.FairTax.org.