With the Fair Tax, you pay tax only when you choose to spend money on services and new goods. Every
legal resident receives a monthly sum (a “prebate”) based on family size.
The refunds become pre-funds ( rebates→ prebates) for the purpose of untaxing legal residents up to
the poverty level (determined annually by HHS). The prebate is delivered to you for your use at the
beginning of each month. You are not forced to use it as tax relief of purchases you might or might not
wish to make. How about starting a “rainy day fund”, or……….? The prebate is self-funding (doesn’t add
to the deficit). All Income Tax is gone, allowing you to control your entire paycheck and any and all
Besides legal/illegal residents making their voluntary taxable purchases at the retail level, the Fair Tax
will have hugely expanded the tax base and virtually eliminated tax evasion. Taxing consumption (70%
of GDP) is a more reliable source of revenue even during economic downturns.