Peter J. Reilly, of Forbes Magazine, has made available for download his article, How The Fair Tax Act Of 2023 Might Work, published in Forbes. The abstract is as follows:
The Readers Digest version of the Fair Tax Act of 2023 is that it replaces the income tax, payroll taxes that fund Social Security and Medicare and transfer (estate and gift) taxes with a very broad sales tax. For 2025 the tax inclusive rate is 23% which translates to an add on rate, as sales tax is usually expressed, of 29.87% and change. After 2025 the tax inclusive rate is 14.91% plus what Social Security Administration actuaries determine the rate to be that will yield what the repealed payroll taxes would have collected.
The Fair Tax enthusiasts paint a “What A Wonderful World” picture of what it will be like as we go from 70,000 pages to 131 and abolish the IRS. I’ve been through the bill numerous times now and will here try to lay out how I think it might work in practice for different sorts of taxpayers when we ring in the jubilee in 2025.
Click here to view Peter J. Reilly’s summary of How the Fair Tax Act of 2023 Might Work.
Posted by, Kaitlyn Bare, Associate Editor, Wealth Strategies Journal.
Wealth Strategies Journal 