HOW DOES THE FAIRTAX TREAT LOW-INCOME FAMILIES AND INDIVIDUALS?
Under the current tax system, the poor pay Federal taxes hidden in the prices of everything they buy. As much as 20 cents out of every dollar they spend today in the stores goes to pay hidden corporate income and payroll taxes that businesses pass on to the consumer in the form of higher prices. The FairTax abolishes all of these hidden taxes. Under the FairTax, poor people will pay no federal taxes at all. Every household will receive a rebate that is equal to the federal sales tax paid on essential goods and services, and wage earners will no longer be subject to the most regressive and burdensome tax of all, the payroll tax. Those spending at twice the poverty level will pay a tax of only 11.5 percent – a rate much lower than the income and payroll tax burden they bear today. Moreover, slow economic growth and recessions have a disproportionately adverse effect on lower income families. Breadwinners in these families are more likely to lose their jobs, are less likely to have the re
