The individuals are responsible for their tax burden, and the Fair Tax would eliminate that burden from them.If the individuals are performing a service their gross income could be subject to the 23% fairtax....then they'd pay tax again when they spend what's left.
In the mean time the IRS has strict requirements for determining independent contractors from employees...tell your brother to be careful.
Thats a stretch. By that reasoning, all workers are providing a "service," and should pay that tax now, irrespective of a fair tax enactment.
Now, they don't tax service professionals in this state.
They may in some others, but those are professional services, as in doctors and lawyers.
The requirements for IRS independent contractors are pretty easy to follow.
Its the state requirements that seem to be a bitch.
We use them every day in our business.
Individuals who own a business can assign themselves a salary. That salary will not be subject to a 23% tax. Plus, even if they just took their gross income,and lived off of that without assigning themselves a salary, the purchaser of the services would pay the 23% tax, not the provider of the service.