The biggest group that would benefit from implementation of the Fair Tax — which would replace the current income tax and payroll tax with a national consumption tax on retail sales — would be the working poor. The biggest group not benefiting would be the upper-middle class and the very rich.
The Fair Tax would provide an exemption for the everyday stuff you need to live. That makes the working poor virtually tax exempt. Meanwhile, brand new expensive stuff would be taxed. So if you bought only used stuff, you could escape ever paying the Fair Tax.
The biggest benefit to the working poor would be the expansion of our economy and more good-paying jobs. Domestic manufacturers and service providers would see an immediate reduction in the cost of doing business because part of implementing the Fair Tax is getting rid of all income-based taxes.
One reason the Fair Tax has not been implemented is that it makes fraud against the federal government harder to pull off. Of course, it wouldn’t hurt to be able to pick and choose when and where you pay the Fair Tax. The bottom line is that legal citizens control their participation instead of the IRS.
