If the Fair Tax brings in the same amount of money as the income tax, where will the funding for the new entitlement program come from?
First there is no "entitlement program" and secondly the money for the tax prebate comes form the exact same place as your standard deduction under the income tax does. Taxpayers!
I believe the term is "revenue neutral", not "bring in the same amount of money". The FairTax, AFTER paying the prebate, results in a net tax to the Feds equal to what is now collected.
The prebate is an essential part of the FairTax that keeps it from being regressive. People at the poverty level, after receiving the prebate, net out at a 0% tax rate. At twice the poverty income level, the after prebate tax is 11.5% of the gross. It would be less than 11.5% if some income is saved or if income is spent on non-taxable items like a used car.
I still wonder if people are purposely trying to avoid learning anything about the FairTax because they just love the current system so much.