A subtle point you can bring up when discussing the FAIRtax is how the measure helps Americans take ownership of government benefits and question government spending. As you may find obvious, people value goods and services most when they pay for them. When people receive goods and services for free, they value those goods and services less.

The following table illustrates this principle:

So, how does the FAIRtax come in? Section 509 of the FAIRtax bill, “Other Administrative Provisions: Tax To Be Separately Stated and Charged,” requires the seller to provide the purchaser a receipt showing 1) the price, excluding the tax, 2) the tax, 3) the price, including the tax, and 4) the tax rate. 

There are only two exceptions to this rule. The first is sales from a vending machine of goods costing ten dollars or less. The second exception is from a sales category known as "financial intermediation services." These are generally banking and brokerage services. The financial products are not subject to the FAIRtax, but the inputs of the bank or broker are, and the tax appears on their statements. Many receipts are electronic today, but the principle will remain the same.

So, with the FAIRtax becoming 91.31% of all federal revenue (with the remaining 8.69% [for fiscal year 2020] being excise taxes and borrowing [source: National Priorities Project “Federal Revenue: Where Does the Money Come From”]), Americans start to see just how much government is costing them. 

More importantly, when the cost of government is clearly printed on every retail receipt, people will become more acutely aware that THEY are the ones who are paying for it.  When American taxpayers realize that the cost of government is being taken directly out of their pockets, they will care a lot more about both the quality and the price of government services.

The end result is that the FAIRtax makes the government more accountable to the people since the people will be paying a lot more attention to what they’re getting for their money.

To keep government in check, Americans need to care about both the price and the quality of government-provided benefits. The FAIRtax will bring the price into much clearer focus.
 

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