Middle-income Americans, however, would bear more of the federal tax burden. A typical married couple at the bottom 25th percentile of the income distribution earns $39,300 per year and would pay $5,625 dollars in federal taxes in 2006. Under the retail sales tax with a Prebate, the same family would pay $7,997 in net federal taxes after the Prebate of $6,694, resulting in a tax increase of $2,372, or 42 percent."'
Middle-income Americans would contribute more to the federal tax system. A typical married couple at the bottom 25th percentile of income distribution earns $39,300 annually and pays $5,625 in federal taxes in 2006. With a retail sales tax and rebate, this family would owe $7,997 in net federal taxes after receiving a rebate of $6,694, leading to an increase of $2,372 or 42 percent.