Is the MI FairTax fair?
Yes, the MI FairTax is fair, and in fact, much fairer than the income tax. Every household of the same size receives the same prebate, and everyone is taxed at the same rate when they buy something. The prebate protects the poor and fixed income households and causes the effective tax rate to be graduated (the more that is spent the greater the effective tax rate). Wealthy people often spend more money than other individuals do. They can buy expensive cars, big houses, and yachts. They can buy filet mignon instead of hamburger, fine wine instead of beer, and designer dresses and expensive jewelry. The FairTax taxes them on these purchases. If, however, they use their money to build job-creating factories, finance research and development to create new products, or fund charitable activities (all of which help improve the standard of living of others), then those activities are not taxed.