This is an update to a previous post of mine “FairTax: YOUR Effective Tax Rate” in which I had created the charts you see below.
Make sure you click on the image below to view the full size image.
Understanding the Prebate
The prebate is multifaceted in that it is necessary for a number of reasons. One reason is to untax poverty level consumption for US Citizens. Nearly every legal US Citizen should qualify for the Prebate, but there are a couple groups of people within the US borders who would NOT qualify. They are:
- Illegal Aliens; and
- Individuals institutionalized (incarcerated) for more than 6 months.
Among those who qualify are any legal US citizen with a Valid (and annually verified) SSN and Legal resident aliens.
As mentioned before, the FAIRtax rebate (prebate) is meant to untax poverty level spending and eliminate any need for politicians to complicate the tax code with a myriad of exceptions for consumption of various items to lower the burden of taxes on the poor. The FAIRtax rebate completely untaxes those living in poverty; and progressively, ones effective tax rate grows the more opulently he lives. But the FAIRtax also promotes adherence to the law because it becomes a carrot for illegals to go home and come over legally.