Will the Fair Tax treat seniors fairly?

Seniors will receive, like others, a monthly cash rebate to recover the sales taxes they have paid up to the poverty level to cover the basic necessities. This means poor seniors will pay no consumption tax at all. They will be untaxed.

Under the Fair Tax plan, Social Security benefits will be increased if the consumption tax happens to result in higher prices. Of course, there will be no income tax on Social Security benefits as there is now.

Income tax on investment income and pension benefits or IRA withdrawals will be repealed along with the IRS. Since the corporate and individual income tax, and the estate and gift tax will be repealed, there should be a positive impact on the stock. Seniors with such investments will experience significant gains.

The Fair Tax plan will tax new homes but not existing homes. Since seniors have higher homeownership than other age groups, seniors who sell their homes will experience large capital gains and these gains will not be taxed as they are now.

For more information: www.fairtax.org or call 1-800-FAIRTAX.

(Next week: Will the middle class be burdened?)