The FairTax Impact On Seniors
We often get inquiries from senior citizens asking how the FairTax®
plan will affect Social Security and Medicare. Because of this interest, we
thought we would address it in today’s FairTax Friday.
FairTax does not change the way benefits are paid. The benefit calculation formula (based on
individual earnings history) will be the same as it is under current law.
Under the FairTax, the funding source changes from a narrow, regressive
payroll tax paid by current workers to a broad-based, progressive national
sales tax. This tax is a faster growing,
less volatile revenue source and is paid by hundreds of millions.
Seniors no longer earn wages nor pay payroll taxes; yet individual and
corporate income taxes and payroll taxes are still built in the cost of
everything you buy, and increase the price of the goods and services you purchase. Under
the FairTax, those same prices will almost certainly be reduced because taxes are no longer built into
the cost of goods and services.
Under the FairTax all new goods
and services are taxed, including Medicare and supplemental insurance premiums;
however the FairTax Prebate makes
all spending up to the poverty level tax-free.
Example: Average Social
Security benefits for a retired couple are $22,360 per year. If this couple
spends all of their income, their tax would be $5,142.8, however, the FairTax
“Prebate” of $440 received on the first of each month would actually pay
all of the FairTax. As a result, their net
tax would be zero under the FairTax. In addition, to further ensure
that seniors’ purchasing power is maintained, the law requires that Social
Security cost of living adjustment be adjusted to take into account the
In summary, the FairTax benefits seniors in numerous
ways. It also ends all tax related record keeping and return filing
– no more tax preparation fees. If one still works, no payroll tax on wage
earned, no tax when you sell your home and heirs do not pay estate taxes under
the FairTax plan.
Most importantly, the FairTax generates an economic
boom ensuring Social Security and Medicare will not go bankrupt – almost a
certainty unless something is done soon. Just a 1 to 2 percent increase in our economic
growth rate would fully fund these programs, thus securing your retirement and
ensuring your grandchildren have the same opportunity that you did.
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The FairTax Act In The News
'Fair tax' vs. flat
income-tax rate debated – Times
All of the participants at a town hall meeting Monday agreed
that America’s current system of taxation doesn’t work and needs to be
Where they differed was on what should replace it.
U.S. Rep. Bill Johnson, R-Marietta, moderated a debate
between Steven L. Curtis, an advocate for the “fair tax” — a national sales tax
— and Curtis Dubay, who spoke in favor of a flat income-tax rate for all
About 100 people attended the event, held at the McDonald
Marlite Conference Center in New Philadelphia.
Johnson opened the session by declaring that the current tax
code is too big, too complex and “too onerous for the American people.” He said
he favors abolishing the Internal Revenue Service, adding that if it were
replaced, billions of dollars would be saved every year.
Without speaking on behalf of the fair tax or flat tax,
Johnson said, “Anything is better than what we’ve got today.”
Curtis, state director for Ohio Fair Tax group, then
outlined how the fair tax would work…
IRS used only for
political and social control, should be replaced with FairTax – Ravalli
Now is the time, more than ever, for us, the people, to act
and let our congressperson hear our voice. The Internal Revenue Service’s
recent incident is a catalyst that we must use to remove unfair taxes imposed
on us, the people. In fact, we should remove the IRS from the tax picture, as
it is only used for political and social control.
Tell Congress to remove federal income taxes including
personal, estate, gift, capital gains, alternative minimum, Social Security,
Medicare, self-employment and corporate taxes by supporting FairTax bills H.R.
25 and S122. FairTax is the only proposal in the Ways and Means Committee that
repeals the 16th Amendment and removes the IRS.
Please contact your representatives, telling them you want
the FairTax. For more information, and to check this information out, go to www.fairtax.org, or search for FairTax in
your favorite search engine.
- Walter Wesley Snyder V - Pottstown, PA