[Guvmint_Cheese]

Could someone please explain how the sales tax rebate would work? Would I be required to keep every single receipt I get? Just curious.

[CSM]

Ancient_Geezer has a great table that shows how it works and he is much better at answering to the specifics that me, but I'll give it a shot.

Basically, the poverty levels dictate the amount of tax-exempt spending by an individual or family. Depending on the size of the family, the amount of spending that is tax-exempt will fluctuate. Assuming the poverty level is $20,000 for an individual, my first $4,600 in spending would be considered "tax-exempt" (20K*.23). Since it isn't possible (that I can figure) to track that spending by any specific individual, they would send me a monthly stipend of $383.333333.

A few of the FR opponents of the fair tax have brought up a valid concern for me. That is that this system would put all citizens on the government payroll, everyone would receive a monthly check. However, I see this one potential negative to be far outweighed by the positives of the entire paradigm shift.

[KarlInOhio]

Could someone please explain how the sales tax rebate would work? Would I be required to keep every single receipt I get? Just curious.

The government figures out what the "poverty level" is for each family size. You tell the government where you live and they send you a check for the sales tax that would paid on the poverty level amount. No recordkeeping needed for the citizen. For example (numbers made up), if the poverty level for a family of 4 is $2,000 per month and the tax rate is 23%, that family would get a check for $460 every month. In effect, that family would have a net tax rate of 0%.

If Bill Gates had a family of 4, they would also get the same $460 monthly rebate. But his overall sales tax rate would be almost the full 23% because (presumably) he spends a lot more than $2000 per month.

I may have the tax-inclusive vs. tax-exclusive method of calculating messed up, but you should get the idea.

[looscnnn]

No receipts needed. They use a formula using family size, national poverty level and assumed amount spent on necessities.

[kevkrom]

Could someone please explain how the sales tax rebate would work? Would I be required to keep every single receipt I get? Just curious.

No receipt keeping... it's not actually a rebate, it's more like an allowance (similar to the standard deduction/personal exemption of the income tax). It's a fixed amount based solely on poverty-line spending, but it's available to all legal U.S. residents, regardless of race/class/religion/income/etc.

[Remember_Salamis]

Here's a FairTax FAQ thread:

http://www.freerepublic.com/focus/f-news/1155628/posts

[Still Thinking]

No, its like the standard deduction on your income tax. As the article says, its based upon what a family the size of yours is expected to spend on necessities (however that is defined) and you get the tax on that baseline amount rebated, whether you spend that amount, or more, or less.

[ancient_geezer]

Could someone please explain how the sales tax rebate would work? Would I be required to keep every single receipt I get? Just curious.

You will not be required to keep receipts.

All legal residents will receive a Family Consumption Allowence(FCA) demogrant equivalent to the FairTax paid on essential goods and services. The FCA will be paid in advance, in equal installments each month. The size of the monthly FCA will be determined by the government's Poverty Level for a particular family size, multiplied by the tax rate.

Every year, the Department of Health and Human Services [HHS] determine the "poverty level" for each family size.

The 2001 "FairTax" Family Consumption Allowance Figures
Family Size	HHS Poverty Level	Annual FCA	Monthly FCA
One	$8,590	$1,976	$165
Two	$17,180	$3,951	$329
Three	$20,200	$4,646	$387
Four	$23,220	$5,341	$445
Five	$26,240	$6,035	$503
Six	$29,260	$6,730	$561
Seven	$32,280	$7,424	$619
Eight	$35,300	$8,119	$677

1) Federal Register: February 16, 2001, Pages 10695-10697).

[ The monthly FCA for each adult is .23 * (HSS poverty level for a single person)/12 to assure no marriage penalty due to the manner in which the poverty level is dependant on family size. The monthly FCA for each child is .23 * (the incremental increase of HSS poverty level for a family with one child over no child) ] A. Geezer

A family of four, for example, could spend $23,220 per year free of tax because they will have received over the course of the year rebates totaling $5,341. $5,341 is the amount of sales tax paid on $23,220 in expenditures. A family spending double the "poverty level" or $46,440 per year will effectively pay tax on only half of their spending and, therefore, have an effective tax rate of 11 ½ percent or half the FairTax rate.

The beauty of the FairTax is that you can control how much you pay in taxes. If you happen to save, invest or spend a portion on used [previously taxed] items, you can get your effective tax rate below 9%.

To illustrate examine the tax burden that a family of four will have at various annual expenditure levels.

H.R.25 "The FairTax Act

Not only does every family receive a FCA based on family size, not income, but they will also receive 100% of their paycheck:

Fedup Smith makes $39K per year...once the FairTax is the law of the land he will receive an instant increase in pay of $200.00 per week. Since he has a family of four, he will receive a FCA of $445 per month, for a total of $1,305.00 additional income per month that he can do with as he sees fit