Are you trying to suggest that, apart from Medicare and Medicaid expenditures, the lowest quintile elderly households only currently have $1,300 a year in income?No he's trying to suggest everyone would be better off with the Fairtax and no matter how hard he tries he can't do it. Besides nothing is exempt (they like it that way) so the "in kind" benefits he lists are all taxable services...someone would have to pay them. That's why the bill allows for the bureaucrats at SS to "determine the (sales tax) rate" every year without a vote from Congress or the President....
Of course that is ridiculous. Most likely, the lowest quintile doesn't have two persons in the household. But you had used the FCA for two people, so I used the Medicare expenditures for two people.
FYI, if somebody had never made more than minimum wage and retired today, SS would only be paying them $7,300/yr. That isn't far off from the $11,300 - $5,000 medicare benefit.
Although any measure of income definitely must include "in-kind" benefits, for our purposes in trying to pin down tax burdens, we really need numbers based on "money income" that excludes these things. My alteration of your table was just to demonstrate what happens when you take into consideration that not everything reported as INCOME will actually be spent on FairTaxable items.
This is especially important, because the CBO uses the "fungible" method to place a value on the "in-kind" benefits. This strikes me a bizzare, and I see no way to estimate it properly. We'd have to find their table by quintiles. Even though the benefit costs the government the same no matter who receives it, the fungible method actually alots a higher value to lower money-income recipients.
Much better to find an income and effective tax table that includes the money-income figures.