FairTax :: FAQs



	Does the FairTax affect all of those taxes on my phone bill? What is the FairTax? Will the FairTax affect my Social Security or Medicare benefits in any way? How much money will I receive each month in my prebate check? Isn’t it a big deal to tax services for the first time? It has never been done before. Why do some people say the rate is 30 percent instead of 23 percent? Does the FairTax repeal the 16th Amendment? The 23% tax rate seems too high. I just did my taxes, and after all of my deductions and exemptions, I only paid 14% of my income in taxes. Why is the FairTax a good deal for me? How can we be sure that the costs associated with the embedded taxes will disappear? How are state tax systems affected, and can states adequately collect a federal sales tax?

Find out what your state is doing to promote the FairTax:

Q:

How will the FairTax affect charitable giving?

A:

Charitable contributions depend on one factor more than any other: The health of the economy (not tax benefits). As a wide range of economists agree on the economic expansion the FairTax delivers, charitable contributions benefit also. For all of the money that pours into churches every Sunday and into a broad range of charities every day, only the 30 percent who itemize get any tax benefit. The other 70 percent have given and keep giving with no tax benefit whatsoever. The FairTax allows people to make charitable contributions out of pre-tax dollars. Thus those generally less affluent taxpayers who do not itemize see their cost of charitable giving go down under the FairTax. Finally, the wealthy make decisions on charitable giving based on the cause. Once they have determined the cause is worthy, their contribution is structured to maximize the gift and minimize the tax. But the intention to give comes first; taxes simply determine the structure – rarely the amount – of the gift.




	Will the FairTax affect my Social Security or Medicare benefits in any way? How much money will I receive each month in my prebate check? Why do some people say the rate is 30 percent instead of 23 percent? How much do Americans pay each year in Federal income tax compliance costs? Once the FairTax is passed and becomes law, what protection is there against a reinstitution of the income tax at a later date? Does the FairTax repeal the 16th Amendment? Is it safe to base American tax revenue on the sales tax? Isn’t consumption volatile? Isn’t it a big deal to tax services for the first time? It has never been done before. Has anything like the FairTax ever been tried before? Won’t people simply avoid the tax by trading and bartering rather than purchasing? Why is the FairTax helpful for capital formation in this country? Today, employers pay 7.65 percent of their payroll to the Federal government in a payroll tax. Do you expect that when the FairTax eliminates this tax that the employers will reduce their prices by this amount or increase wages by this amount? Does the FairTax affect all of those taxes on my phone bill? The 23% tax rate seems too high. I just did my taxes, and after all of my deductions and exemptions, I only paid 14% of my income in taxes. Why is the FairTax a good deal for me? How can we be sure that the costs associated with the embedded taxes will disappear? Right now I can deduct business lunches and other business expenses. I'm still going to have to take clients to lunch, but now I'll have to bear the entire cost. Does the FairTax have an answer to this problem? How will the FairTax affect charitable giving? How are state tax systems affected, and can states adequately collect a federal sales tax? What is FairTax.org? What is the FairTax? How would the FairTax be collected? What is taxed? What taxes does the FairTax replace? Does the FairTax rate need to be much higher to be revenue neutral?


		The GAO (Congress's auditing branch) found that all of the exemptions, exclusions, and special favors in the current tax code drain federal receipts by $728 billion each year. That is almost as much as the nation spends on Medicare and Social Security combined and 60% more than the nation spends on national defense. The FairTax eliminates all deductions, credits, and carve-outs to ensure that everyone pays his or her fair share.

Q:

How will the FairTax affect charitable giving?

A:

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