Frequently Answered Questions

Click on the questions below to view the answers for a particular subject area. If you don't find the answers to your questions in our FAQ's, check the menu under Research at fairtax.org Still can't find the answer to your FairTax question? Please consult the FairTax State Volunteer Directory to contact a FairTax community coordinator near you, or call 1-800-FairTax for further assistance.

  1. What is taxed?
  2. Exactly what taxes are abolished?
  3. How does the rebate work?
  4. Why is the Fair Tax better than our current system?
  5. How is the Social Security system affected?
  6. How does the Fair Tax affect Social Security reform?
  7. How is the tax collected?
  8. Is the Fair Tax fair?
  9. How does the Fair Tax protect low-income families and individuals and retirees on fixed incomes?
  10. What about senior citizens and retired people?
  11. Are Seniors taxed twice on savings, once when they saved it, and now again when the spend it?
  12. How much do prices for goods and services go down under the FairTax?
  13. Is the 23% inclusive Fair Tax rate higher or lower when compared to the income taxes people pay today?
  14. Does the Fair Tax rate need to be much higher to be revenue neutral?
  15. Should the government tax medicine and health care?
  16. Should the government tax services?
  17. How does the Fair Tax affect income tax preparers, accountants, and many government employees?
  18. What about the home mortgage deduction?
  19. Why not just exempt food and medicine from the tax? Wouldn’t that be fair and simple?
  20. What will happen to charitable giving?
  21. Will corporations get a windfall with the abolition of the corporate tax?
  22. Does the Fair Tax burden the retail industry?
  23. How are state tax systems affected, and can states adequately collect a federal sales tax?
  24. How will the plan affect economic growth?
  25. What economic changes come at the retail level with the FairTax?
  26. What happens to interest rates?
  27. What happens to the stock market, mutual funds, and retirement funds?
  28. What happens to tax-free bonds?
  29. How does this affect U.S. competitiveness in foreign trade?
  30. What about border issues?
  31. Does the Fair Tax improve compliance and reduce evasion when compared to the current income tax?
  32. Can the Fair Tax really be passed into law?
  33. What other significant economies use such a tax plan?
  34. What about the flat tax? Would it be better and easier to pass?
  35. Can Congress just simply raise the rate once the Fair Tax is passed into law?
  36. Could we end up with both the Fair Tax and an income tax?
  37. Is the Fair Tax just another conservative tax scheme? Or just another liberal tax scheme?
  38. What assumptions have been made about government spending?
  39. How does the Fair Tax affect government spending?
  40. Why is it necessary to have a constitutional amendment?
  41. How does the income tax affect our economy?
  42. How will this plan affect compliance costs?
  43. What about value-added taxes (VATs), like they have in Europe and Canada? Are they not consumption taxes?
  44. What will we experience in the transition from the income tax to the FairTax?
  45. Can you summarize House Bill HR 25/S1493 - "The Fair Tax Act"?
  46. Who are the Americans for Fair Taxation (AFFT)- FairTax.org?
  47. Is consumption a reliable source of revenue?
  48. I know the Fair Tax rate is 23 percent when compared to current income taxes. What will the rate of the sales tax be at the retail counter?
  49. Is the Fair Tax progressive? Do the rich pay more and the poor pay less as a percentage of their spending?
  50. Is it fair for rich people to get the exact same Fair Tax rebate from the federal government as the poorest person in America?


Prepared by members of the PA Chapter of AFFT - www.pafairtax.org
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