If you’re here in search of information on “Footnote 19”, you’ve probably run into the infamous Mark D. Curran (aka TruthSeeker, FilmCriticOne, Truth, BullShipDetector, Mark Douglas, Mark Curran, Mark Douglas Curran, Mark D, Seeker, Math Matters, 12FlyMe, ItchMyFoot – and many other aliases that we haven’t picked up on yet).
You can find the document Mark is referencing here: A COMPARISON OF THE FAIRTAX BASE AND RATE WITH OTHER NATIONAL TAX REFORM PROPOSALS. I encourage you to read it in its entirety when you have spare time. It is a study that compares the Base and Rate of the FairTax to the flat tax plan, the BTT, and our current tax system.
A major point to note is that this information is coming FROM A STUDY, NOT FROM THE FairTax Act itself. What you are reading does not mean that it will be enacted as written.
Footnote 19 reads:
The FairTax adopts a pre-payment approach to taxing government investment since much of the consumption generated by government investment would otherwise never be taxed.
And is lead in by:
B. The FairTax Base
H.R. 25 calls for a tax on “all consumption of goods and services in the United States.” That consists, for the most part, of what the NIPA defines as “personal consumption expenditures” and “government consumption expenditures and investment.”
Our (unconfirmed) analysis of the term “pre-payment” is that it means “paying the tax when the purchase is made versus paying it at the end of the month“. We do not believe that the authors of the above noted study inferred, in any way, that the State or Government agencies would have to relinquish funds that a) they do not have yet, and b) cannot feasibly estimate.