Below is proof of progressive nature of the Fair Tax. With prebates a family of with income of $34,110 will not pay any more to the government as it spends its $34,110. Even at $51,165, with the family receiving partial prebate, the amount they would be paying to the federal government would be only 7.7%
A not well known but very interesting part of the proposed Fair Tax is that it will tax state and local services. Why is this a positive for the economy? The government should not have special advantages over the private economy. There will be incentive therefore for state and local governments to reduce costs by outsourcing core services to private companies. This has been proven to lower costs and improve service (if only we mandated that TSA be private!). CNBC reported on November 7 that more states are using contractors to cut costs. The Fair Tax will accelerate this.
All other criteria are succinctly met. Zero personal and corporate tax rates will increase entrepreneurial activity tremendously. Revenue neutral, eliminating all deductions and the IRS are by design and core to the Fair Tax. Once the private sector starts again generating new jobs that are self sustaining a momentum will build to keep the Fair Tax long term if not indefinitely. It has been proven by many that it is the private sector that creates new industries, products, jobs, ancillary jobs, and sub industries.
Once passed the Fair Tax will be predictable and stable and increase opportunity for all.
Now is the time to eliminate a major albatross around the US Economy’s neck – our archaic tax system. By our 6 criteria, the Fair Tax is the only one that meets all. Visit http://www.fartax.org, http://www.returntoexcellence.net for more information about the Fair Tax. Contact your Senator and Congressman and advise them of your support. Visit my site Economics501.wordpress.com for a gamut of articles and economic analyses in support of free market capitalism.