How will the FairTax affect military personnel?

I’m a Veteran of Desert Shield and Desert Storm. I also keep in touch with some of my old Navy buddies and others that I knew from my 8 (active) years in the U.S. Navy. I’ve only mentioned the FairTax in a couple related Facebook groups once or twice and been bashed for doing so. Because I so boldly endorsed the FairTax I was considered “un-American” because many of them believe the FairTax is a scam.

Because I didn’t have as broad a knowledge of the FairTax at the time, I didn’t really know how to defend it against an attack from that direction. I have since learned much more about the FairTax and (at the risk of once again being called “un-American”) offer this:

When I was in the Navy I was no more and no less of an American than any other person born on U.S. Soil. But when I was in the Navy, E1 to E5 (the lowest pay grades) earned chump change compared to their civilian counterparts. I doubt anything has changed in that aspect in the past 13 years. For a married E4, times were real tough on ~$1,300 per month. Once taxes were taken out, we were looking at about $500-$550 per paycheck, if that. And that had to go towards food, rent, utilities, and gas to get to and from the base. Not fun trying to balance that budget, I assure you. Point being that the majority of the military is not well paid. I would even consider most of the “well-paid” officers in the military to be just middle-class when compared with their civilian counterparts at the time.

So where does the FairTax fit into all this?

First, the FairTax gives you back your FICA payment (Social Security and Medicare). Your SS/MC payment is 7.65% of your monthly pay.  So, in 2011, an E4 with over 4 years of service can expect to pay about $200 towards FICA.

Second, it gives you back the Income Taxes you’ve paid monthly. So now, instead of just your “combat” or “hazardous duty” paying tax-free, ALL of your pay is tax-free. That same E4 will be in the 15% tax bracket regardless of marital status. That’s an additional $350 you’ll get back every month from not having to pay those horrendous Income Taxes anymore.

Third, it gives you the taxes that you will be expected to pay out for your necessities in the coming month. Now this is based on your marital status and size of your family. I’ll let you use the image below to pick which value best fits your family (click the image to view larger).

2011 FairTax Prebate Schedule

2011 FairTax Prebate Schedule

In total, the FairTax has given you back: FICA + INCOME + PREBATE. ($200 + $350 + ($209 to $930) = $759 to $1,480). Remember, that’s just a rough estimate, but it should be compelling enough to get you to think about the FairTax. Even without the prebate, $500 extra dollars in my pocket would have allowed us to live in a better area and the prebate would have provided us with better meals during those tough times.

What is asked of you in return?

The ONLY thing that is asked of you, like ALL other red-blooded Americans, is that you pay taxes on the NEW goods and services you buy (on base, and off). You’re not being asked to do anything that anyone else in the United States won’t have to do. I would say that doing this is a mere drop in the bucket compared to the sacrifices you’re already making for your country.

Here is an Official response to “How will the FairTax affect military personnel?” from FairTax.org. I hope you take the time to read it. If you have further questions, concerns, or wish to bash me for “being un-American”, I welcome all comments and will ensure they are posted.

Thank you for your dedicated service to this great United States of America.

~Robert Williams
MM2, USN

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Posted in FairTax, HR-25, Income Tax, Prebate
One comment on “How will the FairTax affect military personnel?
  1. That’s excellent, Robert

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