The Effective FairTax Rate for most Americans would be less than 11%
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Although the “base” FairTax would seem high, at 23%, the effective FairTax Rate for most Americans would be well below 11%.

A family of four, living at the poverty level (about $30k) would get a $580 “Prebate” chack every month and they would pay $580 in FairTax, on a maximum of $2522 in retail spending every month. Their FairTax rate would net out to zero (0%).

A family of four, living at double the poverty level (about $60k) would get the same $580 “Prebate” as the lower-spending family. But spending at that level would mean that they would pay $1160 in FairTax every month. Their FairTax rate would therefore net out to 11.5%.

When you consider that most US families live at somewhere far less than double the poverty level for their size of family, it means that most US citizens would pay an “effective” FairTax rate of less than 11%. Then consider that there is more embedded tax than that in most of the products that we buy today. So the FairTax would represent a tax cut for most US citizens.

The very wealthy, who live far above the poverty line, would end up paying an effective FairTax rate of 20 to 22.9%. Note that only illegal aliens, who would not get a “Prebate” check, would pay the full 23%.

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The top 1% of taxpayers pay 2.2 times their share, based on income
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The top 1% of income earners earned 16.93% of all US personal income in 2009, but they paid 36.73% of all personal income tax that was actually collected in that same year. That’s collections AFTER all deductions, exclusions and any other tax breaks. In fact, since we’re talking about “collections” it even includes what was collected after any possible cheating. It’s money in the US Treasury.

What this means is that even after all tax breaks, deductions, exclusions and even any possible cheating that occurs at all income levels, the top 1% paid 2.17 times their share, based on income.

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