FAIRtax (FT) INCREASES Tax Welfare
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2025 Poverty Guidelines
Poverty Guidelines are issued (as adjusted for inflation) annually by the US Department of Health and Human Services - see detailed-guidelines-2025 PDF (aspe.hhs.gov)
The "family" is considered to live in poverty if they spend no more than the following guideline amounts for residents of the 48 contiguous States and the District of Columbia - separate tables are provided for residents of Hawaii (15% higher) and for Alaska (25% higher).
HHS Poverty Guidelines (in dollars)
# of
Persons 2019 2020 2021 2022 2023 2024 2025
1 $ 12,490 12,760 12,880 13,590 14,580 15,060 15,650
2 16,910 17,240 17,420 18,310 19,720 20,440 21,150
3 21,330 21,720 21,960 23,030 24,860 25,820 26,650
4 25,750 26,200 26,500 27,750 30,000 31,200 32,150
5 30,170 30,680 31,040 32,470 35,140 36,580 37,650
6 34,590 35,160 35,580 37,190 40,280 41,960 43,150 7 39,010 39,640 40,120 41,910 45,420 47,340 48,650
8 43,430 44,120 44,660 46,630 50,560 52,720 54,150
Note: For each additional person, add (for 2025) $5,500.
2025 FT Prebate
FAIRtax's ASSUMED Annual Spending & Prebate - 2025
1 Adult Prebate** 2 Adults* Prebate**
$15,650 $3,600 $31,300 $7,200
+1 21,150 4,865 36,800 8,465
+2 26,650 6,130 41,300 9,730 +3 32,150 7,295 46,700 10,995
+4 37,650 8,560 52,200 12,260 +5 43,150 9,825 57,700 13,525
+6 48,650 11,090 63,200 14,790 +7 54,150 12,355 68,700 16,055
*FAIRtax gratuitously "corrects" for a non-existent "marriage penalty" and so it pays an extra $2,335 (see above, 2 adults = $7,200 versus $4,865 for 1 "adult" + 1 non-spouse "person").
HHS Guidelines use "PERSON", while FAIRtax uses "Adults" + "children" – see illustration, below. Thus, the HHS Guidelines do not care if the "person" is an adult or child nor whether the 1st and 2nd "persons" are single or married.
**Assumed spending Prebates shown (rounded) are for residents of the lower 48 States & DC. For Hawaii, add 15%, for Alaska add 25%
ILLUSTRATION
The FT’s Prebate is a tax WELFARE check that leaves many dependent upon the govt for a large portion of their monthly income – which is a terrible idea. Although FT’ers often claim that the Prebate is a return of money “wrongfully” taken from taxpayers, the Prebate is not a refund of FT paid but a new independent $700+B ENTITLEMENT, that will only increase in the future – it is the very last thing we can afford and it would be yet another Cloward-Piven step towards the destruction of our Republic.
FT marketers rationalize the Prebate claiming it is necessary to ensure the poor pay no FT, assuming (incorrectly) that we all agree with that goal. This Illustration exposes that the Prebate goes much further – it gives the poor a large FT PROFIT, i.e., it is disguised additional tax welfare a/k/a Communist Manifesto wealth redistribution.
The Prebate gives every family a monthly check purportedly to cover the FT they would pay assuming they made the highest level of “poverty level purchases” as defined by the US HHS Dept.’s Poverty Guidelines. FT then artificially inflates that amount as explained above and below (i.e., it is not based upon actual purchases of specific necessities).
The Prebate next “assumes” that EVERY family of each size spends the same maximum number of specified dollars (for 2025; $15,650/adult, $5,500 "child") which times 23% (i.e., FT's deceptive tax-INCLUSIVE rate) yields the Prebate that will reimburse them for 100% of the FT ($3,600/"adult", $1,265/"child") that they THEORETICALLY paid.
To illustrate, assume a family of 5; Husband, Wife, 2 kids, and the Wife’s Sister lives with them. They would be “assumed” to spend a total of $57,950 ($15,650 x 3, plus $5,500 x 2). Their 2025 Prebate would be $13,330 ($57,950 x 23%, i.e., i.e., the deceptive “tax-inclusive” FT rate) or (Prebates $3,600 x 3 + $1,265 x 2, rounding difference). The $13,330 Prebate is calculated to pay back 100% of the FT THEORETICALLY paid by the family, but as shown below it greatly OVERPAYS the amount of FT ACTUALLY paid by the family.
Point 1. The FT corrects for a non-existent “Marriage Penalty”
There is NO “Marriage Penalty” in the underlying HHS Guidelines – they were developed as impervious to age or marital status. They provide $15,650 in spending for the 1st PERSON in the household (who is assumed to pay the “rent”) and $5,500 for each added PERSON – it does not matter whether a PERSON is an adult or a child or whether they are married or single. The Prebate “makes believe” that the HHS Guidelines say “Adult” & “Child” and then is more generous to marrieds – the Prebate generously gives away more money, YOURS.
RESULT: The Prebate assumes this family spends $10,150 MORE than the Poverty Guidelines (i.e., $15,650 - $5,500) and thus OVERPAYS them by $2,335 ($10,150 x 23%).
Point 2. The Prebate more generously defines “family”
FT’s more limited (than the HHS guidelines’) definition of “Family” allows for more FT “families” in a single physical household than the underlying HHS Guidelines would allow. A FT “family” includes only lineal ancestors/descendants (plus adopted). Thus, the Wife’s Sister would be treated as a separate family under FT, and thus as an adult (this would NOT occur if the HHS Guidelines were followed).
RESULT: The Prebate assumes this family pays $9,680 MORE (i.e., $15,650 - $5,500) and OVERPAYS them by $2,335 ($910,150 x 23%).
Point 3. The Prebate “assumes” that ALL spending is made AT the poverty dollar limit
If the family ACTUALLY spends LESS than the maximum amount a family can spend and still be at the HHS Guidelines’ limit, they will be overpaid. This family is “assumed” to spend $57,950 ($15,650 x 3 + $5,500 x 2).
RESULT # 1: If they ACTUALLY spend $5,000 less than the limit, the Prebate OVERPAY them by $1,150 ($5,000 x 23%).
RESULT # 2: For Points 1-3, The Prebate assumes $25,300 MORE spending and OVERPAYS their Prebate by $5,5,820
Point 4. The Prebate OVERPAYS for USED goods
If the family buys some goods USED (and can prove the seller paid FT, and that certain credits were not claimed) they will not have to pay FT. Yet the Prebate “makes believe” that they DID pay FT.
RESULT: If the family bought $5,000 of USED goods, the Prebate would OVERPAY them by $1,150
Point 5. The Prebate OVERPAYS for Black Market purchases
If the family buys some goods on the Black Market, they will pay no FT. The FT “makes believe” that all is spent legally so that full FT is paid.
RESULT: If the family spends $5,000 in the Black Market, the Prebate OVERPAYS them by $1,150.
Point 6. The Prebate OVERPAYS for In-Kind (as well as cash) Welfare
Welfare is paid in cash and IN KIND (e.g., Medicaid, Housing Assistance). The poor would NOT effectively pay FT – WE WOULD, either directly (in-kind welfare) or indirectly (cash welfare). The FT “makes believe” that the poor actually paid the FT and repays THEM for FT that WE gave them the money to pay or paid for them directly. The poor would likely also get a raise in their welfare (due to FT 30% price increases) AND they would even be more than fully reimbursed by the Prebate, a second time.
RESULT: If in-kind welfare is $6,000, the Prebate OVERPAYS by $1,380.
Point 7. The Prebate OVERPAYS for Other Exempt Spending
If the family spends money on tuition, property, and other taxes/licenses, etc., they will not pay FT, but the FT “assumes” that they would.
RESULT # 1: If this family spent $3,000 on such items, the FT would OVERPAY them by $690.
RESULT # 2: Points 4-7, Prebate incorrectly “assumes” FT was paid on $19,000 of purchases and OVERPAYS $4,370.
RESULT # 3: Points 1-3, Prebate assumes $25,300 MORE spending and OVERPAYS by $5,820.
RESULT # 4: New goods purchased - $11,140 (see below): FT actually paid is only $2,563 (see below).
RESULT # 5: Grand Total OVERPAID Prebate for Points 1-7 = $9,862.
ILLUSTRATION SUMMARY
Assumptions: H + W + 2 kids + W's Sister SPENDING PREBATE
1. FT Assumed "family" spends and Prebate $57,950 $13,330
2. "Marriage Penalty" -10,150 -2.335
3. Extra Adult -10,150 -2,335
4. Spend below Limit -5,000 - 1,150
5. Total over-assumed spending (L. 2+3+4) -25,300 - 5,820
6. Remaining FT assumed spending (L.1 minus L.5) 32,650 7,510
7. Used goods - 5,000 -1,150 8. Black Market - 5,000 -1,150
9. In-Kind welfare - 6,000 -1,380
10. Other Exempt Items -3,000 - 690
11. Total purchases where NO FT paid (L's 7-10) - 19,000 - 4,370
12. Net spending where FT paid (L.6 minus L.11) $13,650 $3,140
13. Total FT overpaid (L.1 minus L.12) $10,190
That $10,190 overpayment is only an illustrative guess because the real numbers cannot be accurately predicted. However, I would question the insanity of giving the poor a check for several thousands of dollars ($0-$13,330 for this family), plus, free SS/Medicare, and have them pay no FairTax.
In response illustration, senior AFFT Board Members have made only two comments, as follows.
Initially, they had no criticism of any of the 7 points illustrated above. All they could say was “We have to give the poor a ladder out of poverty” - Translation: We need to make welfare even more attractive than work than it already is (Really?).