What is the federal consumption tax rebate?
The federal consumption tax is regressive. In order to protect the poor under Sensible Tax Reform, the amount of FCT taxes that the poor will pay will be rebated to them. For example, a married couple with two children and annual income of $20,000 is considered to be below the poverty level in the United States. At that income level, most families would spend all of their income. The 30% FCT on that amount of purchases would be $6,000. An annual rebate of that amount will be paid to the family. Payment will be made monthly ($6000 12 = $500) to families at the beginning of each month. Thus, the poor would have the necessary funds to pay their FCT each month without suffering any decline in real income or in their standard of living. Indeed, since their Social Security and Medicare taxes will have been eliminated and prices have fallen, the poor will be much better off under STR.
