You’re interested in the FairTax rate, I get that, but if you were interested in a new car would you accept a price without knowing what’s in the car? What if you were buying a new house, would you agree on a price without knowing what amenities are included? I don’t know anyone who would. So I hope you’ll let me explain what the FairTax provides you before you accept the rate.
Income Tax Brackets
#1 From the table below, know which Income Tax bracket YOU currently fall into. Understand, that percentage is what the FairTax will return to you for the rest of your life.
Marginal tax rates for 2013
|Marginal Tax Rate||Single||Married Filing Jointly or Qualified Widow(er)||Married Filing Separately||Head of Household|
|10%||$0 – $8,925||$0 – $17,850||$0 – $8,925||$0 – $12,750|
|15%||$8,926 – $36,250||$17,851 – $72,500||$8,926 – $36,250||$12,751 – $48,600|
|25%||$36,251 – $87,850||$72,501 – $146,400||$36,251 – $73,200||$48,601 – $125,450|
|28%||$87,851 – $183,250||$146,401 – $223,050||$73,201 – $111,525||$125,451 – $203,150|
|33%||$183,251 – $398,350||$223,051 – $398,350||$111,526 – $199,175||$203,151 – $398,350|
|35%||$398,351 – $400,000||$398,351 – $450,000||$199,176 – $225,000||$398,351 – $425,000|
MOST Americans are in either the 15% or 25%, with the majority of those people being in the 15% bracket.
#2 Know your FICA tax rate. These are more taxes the FairTax will return to you for the rest of your life.
FICA Taxes are your Payroll Taxes; a.k.a. Social Security and Medicare Taxes (SS/MC). For most Americans, our share of FICA taxes are 7.65% and our employers share is an additional 7.65%. But for many Self-Employed Americans (and many Small Businesses) they’re required to pay the full 15.3%.
The FairTax Prebate
#3 Know how much the FairTax will provide your family each month FOR THE REST OF YOUR LIFE.
The FairTax also provides you with this advanced rebate on the taxes you’re expected to spend in the coming month. This is NOT based on income, or even your particular spending habits. The prebate is determine by taking a National Average and is based solely on the size and composition of your family. It’s done this way to ensure everyone is treated equally.
Your current Marginal Tax Rate
So…have you figured out how much the FairTax gives you back immediately?
If not, simply add the percentages from #1 and #2 above.
For most Americans that percentage will equal 22.65%. (15% + 7.65%)
Don’t forget about the Prebate
On top of the taxes FairTax has returned to you, you’re also being afforded the prebate to eliminate all sub-poverty level taxes. Regardless of the size and composition of your family, wouldn’t you agree that any amount from the prebate table above is worth -AT LEAST- 0.45%? I’d say it’s worth ten-times that.
Hidden benefits of the FairTax
I’m not going to get into the details, but I’ll just name off a few that are extremely important:
- Elimination of hidden taxes caused by the income tax.
- Complete destruction of the Internal Revenue System (IRS)
- No more filing taxes
- Everyone on US soil will be paying their fair share (not just you).
The FairTax Rate
What would you expect to pay for what the FairTax is returning to you? Keep in mind that the FairTax is considered “revenue neutral”, so it is designed to bring in the same amount of taxes that it is replacing. Would you agree that twenty-three percent is an acceptable rate to charge everyone in the US? After everything the FairTax is giving us, and everything it is riding us of, I’d say twenty-three percent is perfect.