Frequently Asked Questions - Answers
Add to what you read below the fact that Fairtax will remove about 22% of Federal taxes hidden in the price of USA made goods. Jobs anyone?
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- What is taxed?
The FairTax is a single-rate, federal retail sales tax collected only once, at the final point of purchase of new goods and services for personal consumption. Used items are not taxed. Business-to-business purchases for the production of goods and services are not taxed. A rebate makes the effective rate progressive.
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- Exactly what taxes are abolished?
The FairTax is replacement, not reform. It replaces federal income taxes including personal, estate, gift, capital gains, alternative minimum, Social Security, Medicare, self-employment, and corporate taxes.
Back to FAQ Index - How does the prebate work?
All valid Social Security cardholders who are U.S. residents receive a monthly prebate equivalent to the FairTax paid on essential goods and services, also known as the poverty level expenditures. The prebate is paid in advance, in equal installments each month. The size of the prebate is determined by the Department of Health & Human Services' poverty level guideline multiplied by the tax rate. This is a well-accepted, long-used poverty-level calculation that includes food, clothing, shelter, transportation, medical care, etc. See chart in Figure 1 below. ...cont
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If everyone knew all there is to know, they would not do half the things they do, including myself, therefore I must foregive them, including myself.
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