Representative Linder’s bill proposing a National Sales Tax (NST) requires a “pre-bate” of 23% of the poverty level income of $9,310. The pre-bate would be $2,141.30 ($9,310 * .23 = $2,141.30).
A person on a poverty-level income could buy $7,137.66 worth of products and services using the pre–bate to pay the 30% NST (.30x = $2,141.30 therefore x = $7,137.66).
Then this same person would need to use only his remaining $2,172.34 ($9,310 – 7,137.66 = $2,172.34) to buy $1,671.03 worth of products and pay $501.31 for NST (x + .30x = $2,172.34 therefore x = $1,671.03 for products).
$2,172.34 total available minus $1,671.03 for purchases = $501.31 for NST. Read the bill and do the math. Also see the math and a larger discussion on National Sales Tax.
What sort of irrational, cruel people are promoting this system as a fair tax, when a person with a poverty-level income pays $501.31 in federal taxes?
This would severely punish the people living off of Social Security.