1 of 24: This post is the first of a long series of (at least 24) posts that refute what FairTaxFraud wants you to think about the FairTax. We hope to get you the remaining 23 posts within the next few weeks (or maybe months), so please keep watching.
FairTax FACT: Americans take home their whole paychecks.
FairTaxFraud: There’s no miracle that occurs and wipes out all other taxes as is implied by that statement. State and local taxes and deductions will still be taken out the same as the existing tax plan. Deductions for health insurance, IRAs, 401K’s, union dues, etc. will still be taken out as always. You just get to see a little more of it before you purchase your $5 Big Mac (with 30% FairTax tax added). The real alternative to the FairTax called the No-Tax Plan will allow you to not only take home your entire paycheck, it will let you consume as much as you want and buy anything you want tax free.
FAIRTAXER: The first thing to note here is that the document FairTaxFraud used to gather their information clearly states:
Not only do more Americans have jobs, but they also take home 100 percent of their paychecks (except where state income taxes apply). No federal income taxes or payroll taxes are withheld from paychecks, pensions, or Social Security checks.
That tells me FairTaxFraud is merely trying to discredit a well researched plan with trickery and deceit. Regardless, FairTaxFraud is partially correct there. I mean, there really isn’t any “miracle”, and yes, state and local taxes will still be taken from your paycheck, BUT, you will no longer be taxed on FEDERAL income that you haven’t seen yet; and you will no longer be paying those horrendous FICA taxes. Besides, most of those other deductions are voluntary and have nothing to do with Federal Taxes anyways. In most states, you don’t even “have” to have withholding for state income taxes, and those states, after passage of the FairTax, may shift to a sales tax basis anyway. For those of us “lucky enough” to work for a company, we only pay 7.65% each month to our FICA taxes alone. Our EMPLOYERS ALSO PAY 7.65% to match what we put into FICA. That is a total of 15.3%; which is also paid by those of you who are unlucky enough to be Self-Employed.
So, in answering: Does the FairTax give you your WHOLE paycheck back? Yes it does, with the exception of any voluntary deductions and state/local taxes – giving you 22.65% to 43.3% more than you’re getting now, depending on your tax bracket and whether or not you’re self-employed. You do the math! It looks pretty cut & dry to me.
I feel it is also worth noting that the National Small Business Association Endorses FairTax. So if you own or work for a Small Business (I believe most of us do nowadays) it would be in your best interest to get your employers or employees on track with the FairTax.