When you look at a fountain, you observe water spewing forth, filling a container below causing it to
overflow into the bottom basin. What is the source of the water spewing forth from the top? The
fountain’s water source is therefore self-contained, recirculating from the bottom reservoir to the top.
The identical process occurs when The Treasury via the same office that issues social security checks,
sends out the prebate (Family Consumption Allowance) stipends to legal residents who have
successfully applied for them. The purpose is to pay the national sales tax for purchases made up to
the poverty level for the individual or family unit.
The prebate stipends are intended to be spent as taxes. When spent as taxes, they are collected by
retailers of new goods and services and by law sent back to The Treasury.
When you use the image of a fountain which recirculates water, imagine the water to be sales tax.
The Treasury gives the tax stipend (prebate), consumers spend it to pay sales tax, retailers collect it
and send it back to the Treasury so the Treasury can send you the same stipend amount the first of
the next month.* And so it repeats and repeats month after month.
The Fair Tax has a pump, as does the fountain. If the pump on either is stopped, the final monthly
prebate stipend will flow through the process back to the source, The Treasury. The prebate is
therefore self-funding (the only self-funding program provided by the government).
*The stipend you receive each month doesn’t have to be spent as a tax. If you are a wise consumer, you
will be able to use it in any way you wish. (Since necessities need to be purchased each month, it is
assumed you will spend most or all of the stipend to pay the sales tax.)