>>>An example for us to look at (assume single no state withholding): You earn $2,000.00 per week ...You earn $2,000.00 per week ...
I think this is an example of a person that is already paying taxes and in the top 15% of earners, not exactly middle class household that I was referring to. What about the family of four that earns $800 per week. How does that scenario work out?
Your example for us to look at ((assume family of 4 - husband/wife/2 children - no state withholding, earning $800.00 per week:
Weekly Gross Pay - $800.00
Federal Withholding - $ 27.88
Social Security - $ 49.60
Medicare - $ 11.60
Net Pay - $710.92
1st - you keep the $89.08 in payroll taxes per week. ($4,632.16 annual savings of payroll taxes - $89.08 times 52 weeks)
2nd - Prebate of (2009) $559/mo or $6,702/yr. (see http://www.fairtax.org/site/PageServer?pagename=about_faq_answers)
The prebate covers your first $559 per moth in taxes paid out. Buy more it is not covered for anyone.
So this family gets the prebate annually of $6,702 plus the payroll tax savings of $4,623.16 total annual $11,325.16 to spend or save as they see fit.
This is good. Every thing is proportional to the funds that individual/family have available. It will not bring the poor up to the middle class or the middle class to wealthy ... no tax reform will ever do that. That will take the individual getting raises at work ... I know for some work is a dirty word.
What this shows me is that you do not want to be burdened with researching this matter yourself. Therefore, I don’t believe you will ever understand what the FairTax is all about. You will always have a uneducated point to bring forth. People learn by doing ... not having others do for them. I really wonder about folks who choose to question and not research the facts for themselves.