The Grassroots Corner August 4th, 2025

HOSTILE ARGUMENT: IT IS UNFAIR THAT THE FAIRTAX TAXES FOOD, CLOTHING, HOUSING, AND MEDICINE

        Today, we continue a series of articles about handling attacks on the FAIRtax. We often hear that the FAIRtax is actually unfair because it applies to food, housing, clothing, and medicine. Most state sales taxes exempt these items in an attempt to spare poor people a crushing tax burden when they buy the things they need to survive.

        It’s a well-established fact that sales taxes, by nature, are regressive.  “Everyone pays the same percentage” might sound like a fair way to do things.  But when Elon Musk and a single mom on SNAP have to pay the same amount of tax on identical carts of groceries, it’s not hard to see who is getting hit harder.  So, what’s fair about applying the FAIRtax to basic necessities like food, clothing, and medicine?

        There are really two parts to that answer.  The first is that neither Elon Musk nor the single mom on SNAP has to pay the FAIRtax on their basic necessities.  The tax they pay at the cash register for those items is refunded to them in a monthly payment we call the prebate.  The single mom who can’t afford much more than her basic necessities has most, if not all, of the FAIRtax she pays at the register refunded to her, while Musk, who spends at a much higher level, takes a lot more out of his pocket to pay the FAIRtax.

        Secondly, it’s a good bet that the single mom’s grocery cart contains basic ground beef and store-brand pasta while Musk’s cart contains the most expensive steaks and other premium items.  Applying the FAIRtax to all grocery items ensures that those with greater resources will pay more tax.
One of the FAIRtax’s most attractive characteristics is its simplicity.  It doesn’t get into the business of deciding which items are worthy of an exemption and which are not.  By refunding the tax paid on spending up to the poverty level, the FAIRtax empowers consumers, not lobbyists and political special interests, to decide what a household’s basic necessities are.

        Furthermore, staying out of the exemption business ensures that the FAIRtax rate can remain as low as possible.  When you start granting exemptions, the rate on the non-exempt items must rise in order to keep revenue generation steady.

        Also, taxing food targets a population that otherwise evades tax. Undocumented immigrants often work “under the table” for cash and pay no income tax. These immigrants still have to buy food at the grocery store. Charging tax on grocery items turns these tax evaders into taxpayers and taps the underground and shadow economy for the first time.

        Most people don’t realize it, but the prices of every product and service we buy today are inflated by significant tax costs.  These taxes include the corporate income tax, personal income taxes and self-employment taxes for proprietors, and the employer portion of the payroll tax.  You don’t see it.  It’s not printed on your receipt, but all of these tax costs are passed on to consumers in the prices of everything we buy. The FAIRtax eliminates all these costs.

        How the FAIRtax will affect overall retail prices has yet to be determined.  Some studies have indicated that consumer prices could rise slightly with the FAIRtax, but purchasing power will increase, even if prices do rise somewhat.

        Working consumers will bring home their entire paychecks without income tax or FICA withholding. Retirees who receive Social Security will see their benefit adjusted for any increase in consumer costs because of the FAIRtax.

        I would love to hear how you would handle the criticism that taxing food is unfair.
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🇺🇸   Call For Pictures & WriteUps - We need more of you to send in pictures and news. If you have something to share, please send your material to me, Jim.Bennett@FAIRtax.org, (908) 578-4975, or fax (908) 598-2888. When others see your activity, they are inspired, and the process snowballs. When the process snowballs, Congress Members, Senators, and even the President start to listen.