Is the 9.75% MI FairTax revenue-neutral rate higher or lower when compared to the taxes people pay today?
Most people actually pay that much or more today – much of it is just hidden from view. By eliminating the Michigan income tax, people will keep about 4.35 cents in income and pay 3.75 cents more in sales tax. The prebate and the decreased cost of new goods and services (that no longer would have the imbedded business taxes and tax compliance cost hidden in their prices) balances the application of the new tax rate to all such expenditures. Michigan residents also would save time and money, as we no longer would have to maintain income tax records and prepare and file returns. Since the same amount of revenue would be paid to the state under the MI FairTax as the taxes it replaces, and since all taxes are, in the end, paid by consumers, people will be paying about the same under the MI FairTax as they are paying today. The true savings to Michigan residents would be in the savings in compliance costs we pay today for personal and business taxes.
Related Questions
- Is the 23% FairTax revenue-neutral rate higher or lower when compared to income and Social Security taxes people pay today?
- How does the MI FairTax help seniors who have paid taxes on their retirement savings or invested in Roth IRAs?
- Is the 23% inclusive FairTax rate higher or lower when compared to the income taxes people pay today?
