Would an Illinois state Fair Tax work the same as the federal? What would be the Fair Tax rate for Illinois? Thank you.
We had an analysis done for IL a few years ago. The surprise was the sales tax rate would be about the same without the income tax. The FairTax would broaden the base (people who pay taxes) and extends it to services so when everyone pays something, we all pay less.
We have found that poor people use the bulk of their money to buy goods while rich people spend the bulk of their money on services.
To answer your question, yes the IL Fair Tax would function like the national Fair Tax.