To lessen the burden on those who spend all of their income on necessities, we untax necessities by providing a cash distribution to every family, based on the size of the family.
How do we define necessities? The federal government makes a determination each year as to how much it costs a given sized family to buy its essential purchases. For a single person that number is $11,490. For a family of four it is $31,020. The PRE-bate, coming at the beginning of each month, for a family of four will be $595. Used goods are not taxed. Nothing should be taxed more than once.
To receive the prebate, each family will provide the name, birth date, address and Social Security number of each member of the family just as is done today with Food Stamp applications. That data will be crosschecked against Social Security records to ensure accuracy before an electronic transfer is made.
A study by Dr. David Tuerck, Chairman of the Economics Department and Executive Director of the Beacon Hill Institute at Suffolk University in Boston, concludes that the FairTax-generated revenues would have exceeded actual revenues by $171 billion in 2009 and $267 billion in 2010.
Repealing the code and abolishing the IRS will end the abuses that we have all become familiar with. That agency is out of control and cannot be “fixed.”
Businesses will be able to do their planning based on the interests of their shareholders, their employees and their customers. Government will no longer have a seat at the table. You will make your personal decisions regarding how to save, invest and donate based on what you choose to do without any tax considerations.
Studies show that 22% of what you currently spend represents the embedded costs of our current tax code. By eliminating those costs, competition will drive them out of the price system. The combination of reduced prices and increased take-home pay will give those who spend all of their income on living expenses a 22% increase in purchasing power.
Twenty trillion dollars, now sitting in offshore financial centers, will pour into our markets, our banks and our businesses creating a booming economy and millions of jobs.
The FairTax rewards hard work and savings and taxes consumption. And, for the first time in over 100 years we will tax wealth rather than wages. We will tax what we take out of society rather than what we put into it.
Eliminating the 73,000 pages of current regulations will save the $500 billion to $1 trillion that we spend each year just to comply with the code and remit our share. Paying nearly a trillion dollars to comply with a law that collects less than three trillion dollars is worse than inefficient…it is stupid!
Moving to a consumption tax will make each of us voluntary taxpayers. We will pay taxes when we choose, as much as we choose, by how we choose to spend and we will be given the greatest gift a free society has to give…anonymity. No government agency should know more about us than we are willing to tell our children!