All services are taxed, and services typically make up half of the family budget. There are no untaxed groceries or restaurant meals. No untaxed gas for the car or gas/oil for heating your home. Nothing untaxed at Wal-Mart or any of the big box stores. I couldn’t find any used item purchases in last years budget. How about you?

I have read some absolutely silly arguments about how one can go live in a cave and grow one’s own food, etc. Yes, it is possible, but not very probable. Everyone has the right to buy their underwear at Goodwill, but the vast majority will simply pay the tax and stick with their current standard of living. Keep in mind that everyone but the middle class retirees will probably have more purchasing power under the Fairtax, so drastically reducing their standard of living just won’t be necessary–or smart.

Hank is right. Basically, -YOU- decide what your necessities are; NOT the government.

If -YOU- feel that -YOU- can live off of bread & wine for the month, that is -YOUR- choice. But if you’re like most responsible adults, you will put that money towards your groceries, or rent, or utilities.

But does it really matter -where- you put that money? Even if you put it in a savings account, you will have it to spend later. And when you do spend it, it will be taxed accordingly.

Another good installment, Bob. Thanks for this information.

Sounds good, but your description about the purpose of the prebate is flawed. There is nothing in HR25 that mandates that the basic necessities will be “untaxed”. In fact, the Family Consumption Allowance (prebate) can be spent on anything you wish. It is a monthly income supplement that adds to everyone’s gross income and comes at a cost of an estimated $600 billion annually. The prebate will be scored by CBO as a cash grant entitlement, not as a tax refund as so many Fairtaxers want to claim.

Entitlements are rapidly squeezing out discretionary spending in the federal budget, and we can’t stand for another huge entitlement. Perhaps a targeted entitlement for the really poor at one tenth the cost would be a better plan?