In an effort to keep the FairTax from placing a disproportionate burden on lower-income individuals and families, its designers created the Family Consumption Allowance, better known as the prebate. This monthly subsidy from the government is meant to offset the FairTax charged on the most basic of living expenses. In the spirit of being fair, the FairTax’s authors would award the prebate to everyone, from the poorest to the wealthiest. Bill Gates would get the prebate right along side someone scraping along at minimum wage.
The prebate is a monthly advance given to consumers to cover the cost of the FairTax on all expenses up to the National Poverty Guideline. In other words, every American would have a certain portion ...