Is the 23% inclusive FairTax rate higher or lower when compared to the income taxes people pay today?
Most people are paying that much or more today much of it is just hidden from view. The income tax bracket most people fall into is 15 percent, and all wage earners pay 7.65 percent in payroll taxes. Thats 23 percent right there, without taking into account the 7.65 percent employer matching! On top of that, you have to add in all of the taxes embedded in the goods you buy (another 20 to 30 percent). EFFECTIVE TAX RATES VS. STATED TAX RATES Because the 23-percent inclusive FairTax (30% sales tax at the register) would not be imposed on necessities (prebate), an individual spending $28,808 on taxable items would pay an effective tax rate of only 15.6 percent maximum, not 23 percent. This rate becomes even lower when adjusted based on spending for nontaxed items. That same individual will pay 17.3 percent of his or her income to federal taxes under current law regardless of their spending choices, and their employee would also pay 7.65% in FICA matching taxes.
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- Is the 23% inclusive FairTax rate higher or lower when compared to the income taxes people pay today?
