Back to the Fair Tax
Author and syndicated talk show host Neal Boortz (
www.boortz.com) and Congressman John Linder (co-author) are ffrom Atlanta, so we've had several years of talk about the Fair Tax plan.
Your long post has two mistakes:
1 - everybody gets the monthly pre-bate refund of taxes - rich and poor - so the very basic living items are effectively un-taxed.
2 - seniors are among the biggest beneficiaries. Here's a page from the website (
www.fairtax.org):
What about senior citizens, retired people, and anyone on a fixed income? As a group, seniors do very well under the FairTax. Low-income seniors are much better off under the FairTax than under the current income tax system.
Some erroneously believe that people who live exclusively on Social Security pay no taxes. They may not know it, but with corporate income taxes, they are paying hidden taxes averaging 22 percent (for goods) to 25 percent (for services) on everything they buy. Under the FairTax, they break even from the very beginning because they only pay $0.23 out of every dollar they choose to spend on new goods and services, rather than anywhere from 20 to 30 percent in hidden taxes. And note, they elect to pay these taxes through their lifestyle choices.
It gets better from there. Seniors, like everyone else, receive a monthly rebate, in advance of purchases, for taxes paid on the cost of necessities. If seniors choose to work, they are freed from regressive payroll taxes, the federal income tax on wages, and the compliance burdens associated with each. They pay no more hidden taxes on goods or services, and used goods are tax-free. There is no income tax on their Social Security benefits.
The income tax imposed on investment income and pension benefits or IRA withdrawals is repealed. Pension funds, IRAs, and 401(k) plans had assets of $6.5 trillion in 1994. An income tax deduction was taken for contributions to most of these plans. All beneficiaries and owners of these plans expected to pay income tax on them upon withdrawal but will not be required to do so under the FairTax.
All owners of existing homes experience large capital gains due to the repeal of the income tax and implementation of the FairTax plan. Seniors have dramatically higher home ownership rates than other age groups (81 percent for seniors compared to 65 percent on average). Homes are often a family’s largest asset. Gains are likely to be in the range of 20 percent.
The FairTax makes the economy much more dynamic and prosperous. Consequently, federal tax revenues grow. This makes it less likely that federal budget pressures require Medicare or Social Security benefit cuts.