"You really need to understand real values. Today, if I get a $10,000 gift and pay no income taxes on it, I can buy $10,000 worth of stuff. It's real value is $10,000. With the FairTax, if I get a $10,000 gift, I can only buy $7,700 worth of stuff. It's real value is $7,700."
Of course, you ignore the fact that if that $7,700 worth of "stuff" were produced in the USA, it would have cost approximately $10,000 under the current tax system.
"That's significantly less than the 23% FairTax rate."
As you know the EFFECTIVE rate of the FairTax only approaches (but never quite reaches) 23% only for relatively high consumption levels. In fact, those consuming exactly at the poverty level will have a 0% effective rate - and that doesn't count the benefit of seeing pre-tax prices of US produced goods decline. In effect, there is an INCREASE in purchasing power up to the poverty level.
Of course, you ignore the fact that if that $7,700 worth of "stuff" were produced in the USA, it would have cost approximately $10,000 under the current tax system.And you ignore the fact that the only way prices can drop like that is if wages are reduced. And since wages can't be reduced across the board, price almost certainly won't be going down.
As you know the EFFECTIVE rate of the FairTax only approaches (but never quite reaches) 23% only for relatively high consumption levels.They would have to be very poor to approach an 5.4% effective rate under the FairTax.
In fact, those consuming exactly at the poverty level will have a 0% effective rateThat's not true. People consuming exactly at the poverty level will have a higher than 0% effective rate. It's closer to 4%.
that doesn't count the benefit of seeing pre-tax prices of US produced goods decline.But they won't. Are you still singing that tune?