1 While the FairTax, as written, calls for a specific sales tax rate, you may be inclined to see how your situation would change if the rate were higher or lower.
Period: Enter the period to use for the periodic numbers that you will enter below. The periodic numbers are Salary / Wages, New Investment, and Spending.
Salary / Wages: Enter the amount you earn from working at jobs for the period that you select below.
We'll use this group of inputs to determine your filing status and standard deduction for the income tax illustration. If the inputs don't apply, just leave the values as zero.
Many taxpayers have some form of income from investments. Under the current income tax system, earnings on investments are taxable. Some of these investment earnings may be taxable at the taxpayer's marginal rate and some may be taxable at capital gains rate. For simplicity, we're not going to differentiate between the two.
Total Existing Investment: Enter the beginning-of-the-year market value of all your investments that earn money during the year.
Period New Investment: Enter the amount of money that you save or invest in the period you selected previously. If the Period Spending amount is less than 150, this number will be treated as a percent. In that case, the sum of the two numbers may not be greater than 150.
Rate of Gain: Enter the percentage that you expect your investments to grow over the course of a year.
Period Spending: Enter the amount of money that you spend in the period you selected previously. Numbers less than 150 will be treated as a percentage of the Salary / Wage number you entered previously.
FairTax Rate: The FairTax bill (HR 25) specifies the FairTax at the tax inclusive rate of 23%. The tax exclusive rate is 30% and that is the rate contained in the form. If you want to illustrate your situation with a different rate, you may enter that rate here.
Local Sales Tax Rate: Enter the rate of the state, county, and local sales that you pay for purchases in your home town.
Local Sales Tax Exempt: All the states that have instituted a sales tax have a list of items that are exempt from the sales tax. Depending on what your state exempts and on what you spend most of your money, some amount less than the full Period Spending amount sales will be taxed. Enter the percentage of your spending that you estimate is taxed.
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Zip Code: We'd like to get a sense of the geographic area we reach with this site.
E-mail: We're going to send you the illustration calculation, so we need this. We may also use the e-mail address to follow up with you.
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