Apparently, the fair tax ties the SS portion of the rate to reported wages. Currently, wages are under reported because people don't want to pay the SS tax. I take only a small salary out of my business for that very reason. Once the fair tax is adopted, people will report higher wages which will cause the fair tax rate to go up automatically. This will also lead to having the SS being on the hook for paying more out in benefits.
Once the fair tax is adopted, people will report higher wages which will cause the fair tax rate to go up automatically. This will also lead to having the SS being on the hook for paying more out in benefits.You forget that people who have income from capital gains and investment income (which includes a large majority of "rich" taxpayers) will also pay into SS under a NST. Also, the current "income cap" which stops the withholding of Social Security taxes over a certain income level would disappear. It doesn't matter if you have wages or not or if you made $20,000 or $200,000, you still pay for SS through a NST.