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To: xcamel
the typical middle-income North Carolinian who earns about $34,000 per year would pay an additional $3,800 in federal taxes

Using the author's numbers if you take $3,800 and divide by 0.23 you get $16,522

34,000-16,522 = $17,478

Assuming this person is single and has no children (although not the "typical North Carolinian is) his/her prebate allowance is $10,210 (ie no taxes paid on this amount)

This means a difference of $7,748, including $1,720 paid in FairTax. $1,720 + $3,800 = $5,520 total Federal Tax

Assuming NO FEDERAL INCOME TAXES PAID AT ALL, and using only Payroll taxes, this person paid $2,550 (NOTE: This ignores the employer contribution, which under the fairtax doesn't exist, and is can be given to the individual)

$5,520 - $2,550 = $2,970

This is a good bit shy of $3,800.

If we INCLUDE the employer contribution (as we should) to the amount of Federal tax paid, then the total is $5,100.

[NOW LET'S LOOK AT THE CURRENT SYSTEM INCLUDING INCOME TAX]
Assume an single individual who made $34,000 last year. According to the 2007 tax tables his standard/personal deductions are: $5,350 + $3,400 = $8,750.

His taxable income is approx $34000 - 8750 = $25,250.

Therefore his Federal income tax is $3,224 (rounding down).

So in conclusion:
Current system $5,774 (total Payroll/Income Tax)
Current system $8,324 (total Payroll/Income tax incl Employer contribution)
FairTax system $5,520 (total)

Where's the $3,800?
15 posted on 01/22/2008 4:12:56 AM PST by RangerM (Jesus was likely a very good carpenter.)
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To: RangerM

As in the devil we know vs. the oily devil we haven’t met, yet. One real answer is to reduce the government by 30% the first year and 10% each year following and to use fair tax calculation in the cuts. Soon we would reach a point at which government was palatable and met its Constitutional roll.

I’m afraid that all of this is wishing as long as Tocqueville’s rule remains, (paraphrased) “The republic is safe until politicians learn that they can bribe you with your own money.”


31 posted on 01/22/2008 4:35:06 AM PST by Steamburg (Your wallet speaks the only language most politicians understand.)
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