The Grassroots Corner March 16th, 2026

HOSTILE ARGUMENT: THE FAIRTAX IS UNFAIR TO THE POOR AND A WINDFALL FOR THE RICH - PART THREE

 

        Today, we continue a series of articles about handling attacks on the FAIRtax and conclude a mini-series on why the FAIRtax is anything but regressive. The loudest and most often heard criticism we hear about the FAIRtax is that it’s regressive. People instinctively believe that because it’s a sales tax, the FAIRtax will hurt the poor and will be a windfall for the rich. That may be true of the ordinary sales taxes people are familiar with, but the FAIRtax is not your ordinary sales tax.

        Their argument usually goes something like this. Suppose that Elon Musk, Jeff Bezos, and a single mom on SNAP stand in the checkout line at a grocery store with identical carts of groceries. If groceries were subject to a sales tax, each would pay the same amount of tax. However, the tax represents a much greater percentage of the single mom’s income than it does for Elon and Jeff. So in reality, she’s getting hit much harder than the billionaires, and that’s not right.

        If the FAIRtax were an ordinary sales tax, they’d be right. But again, the FAIRtax is not an ordinary sales tax. In Part 1, published in Grassroots Corner on February 23, 2026, we explained that the prebate is one reason the FAIRtax is not an ordinary sales tax. In Part 2, published on March 2, 2026, we analyzed the removal of the payroll tax, which disproportionately affects low-income earners, and how this removal lowers the pre-tax cost of goods and services for consumers. Today, we conclude with a discussion of several more features of the FAIRtax that make it a great deal for low-income consumers:

        Three additional features deserve a spotlight. Used goods, i.e., goods that previously paid the FAIRtax, do not pay tax again. Consumers will save tax by buying a gently used car. Education, the ticket out of poverty and the key to the American dream, is untaxed. Finally, retirees who rely on Social Security receive an adjusted benefit if the cost of living rises due to the FAIRtax. We pointed out earlier that a sharp rise in prices is unlikely.

        The FAIRtax, unlike a straight sales tax, protects the purchasing power of lower- and middle-income consumers and may even improve it.

        Does the FAIRtax make the rich pay their fair share of taxes? Wealthy people today are adept at minimizing their income tax liability. If Jeff Bezos, for example, were to buy a yacht, he would likely borrow against his Amazon stock rather than sell it and incur a capital gain. That strategy would allow the stock to appreciate without tax. Under the FAIRtax, Jeff would pay tax on the yacht.

        Warren Buffett once claimed that he paid less in income tax than his secretary. Warren lives frugally, so he may not pay much FAIRtax either. But when Warren holds back from consuming his wealth, he invests it, giving others the chance to put his money to work. Whether Warren consumes or invests, the FAIRtax is a win-win.

        So, to summarize this mini-series, the FAIRtax is not just another sales tax. It features a prebate; abolishes the payroll tax and removes embedded taxes passed on to consumers; untaxes used goods and education; adjusts Social Security benefits for seniors; and requires billionaires to pay their fair share of taxes or allows others to put billionaires’ wealth to work.
           
        With this mini-series now at an end, I would love to hear how you would address the criticism that the FAIRtax is unfair to the poor, and how you might turn this lengthy discussion into a sound bite.