[RobFromGa]

Here's where I think we are with how the FairTax would actually work in practice...

Feel free to comment.

[andyk]

Incoming!

[FairOpinion]

Fair Tax Misrepresentation PING

[Principled]

The entertainers (boortz) aren't the legislators. What I've said and continue to say is that purchasing power will remain nearly constant via changes in take home pay and price alterations - for the first few years anyway - until things get better.

Besides, the nrst makes illegals pay tax % exceeding any legal citizen's percentage.

Also, the nrst allows US manufacturers to better compete in the world market. It's hard enough for us to compete against labor costs so much lower than ours!

While the nrst is not perfect, it's a far cry better than any income tax... border adjustable too.

[goldstategop]

We need to repeal the income tax. But the enemy of the good is insistence on the perfect and the main advantage of tossing out the cumbersome income tax code no one understands is to get rid of the IRS. As for the FairTax, its easily understandable and no one needs an army of accountants to pay the tax. That's a lot of useless labor that can be freed up for more productive work. Even if the marginal rate of the FairTax is higher than all the taxes imposed under the current system, you can't put a price tag on the savings of time and not having to figure out how to keep the government's hands off your money. Simple and straight.

(Denny Crane: "Every one should carry a gun strapped to their waist. We need more - not less guns.")

[GSlob]

SAVED MONEY: All dollars that are post-tax savings would be devalued by the FairTax inflation by 20% in terms of what they can buy with their hard-earned and saved money.
Include in it the capital cost basis of every taxable investment in existence [a savings account is an investment of sorts], Roths etc. "Fair tax" is the double taxation fraud.

[Your Nightmare]

Well done.

I think it's important that people know that their state and local governments will be paying much money to the federal government under the FairTax. It's estimated that they would pay ~$350 billion in FairTax. Of course, a government can't pay a tax anymore that a business can - they both just pass it on to individuals. In this case it's the taxpayers. The will see their state and local taxes go up.

[bordergal]

Since they will be paying the 30% FairTax on every item.

The Fed govt doesn't pay sales tax now on items they purchase. I see no reason for them to do it with the Fairtax either.

[Mojave]

Now that the author of the bill, John Linder, admits in his co-authored book "The FairTax Book" that there in no such thing as "Keep 100% of your paycheck, while prices stay the same",

The cultists are too invested in their entitlement scam to even care that they stand exposed.

[Kellis91789]

It looks like you've ignored the taxes paid by non-corporate businesses. You've also under-estimated corporate business income taxes, and pretended that market forces do not exist. So your 8% price drop figure is a tad low, andd your FairTax inclusive prices are therefor a tad high.

I'll tell you what will really happen:

Out of a $9T national retail sales, corporate income taxes were $300B for 2005. Non-corporate business income taxes were $300B. Employer-side payroll taxes were $380B. Business compliance costs including non-corporate business were $200B. The non-corporate businesses will retain $150B of their income taxes to give themselves a 15% increase in take-home pay and maintain their FairTax purchasing power.

Net Taxes passed along in retail prices = $1,030B / $9T = 11.4% which is what prices should fall while maintaining current after-tax profit levels for all American businesses.

On your imported vs. domestic beer example, you miss the obvious market issues. If both are currently selling for $10 a 12-pack, then the consumer has already assigned equal value to them. The total cost for the imported 12-pack must stay the same as the domestic beer or it will lose market share. So both domestic and import beers will fall to $8.86 before tax and $11.50 including FairTax. A 15% price increase overall.

With the tax rebate, some people will be able to afford MORE beer -- import as well as domestic -- than they could before.

[lewislynn]

Isn't is likely that we will end up with an income tax again on top of the FairTax when this all plays out?

Most likely the first incremental, boil the frog step, would be the re-institution of the employer half of FICA and SE tax "to save Social Security".

[Apple Blossom]

Ping

[HalleysFifth]

"Isn't is likely that we will end up with an income tax again on top of the FairTax when this all plays out?"

You got that right. There is no point in discussing the FairTax at all without the absolute prerequisite of repealing the 16th Amendment.

[Cyber Liberty]

Isn't is likely that we will end up with an income tax again on top of the FairTax when this all plays out?

That's the deal breaker for me, and why I would never support FT. I'm not buying the "Amend the Constitution again to prevent reinstatement of the income tax" argument. Just because a thing is explicitly prohibited by the Constitution doesn't mean Congress won't pass it, the President won't sign it, and the Supremes won't let it stand.

For reference, see "Campaign Finance Reform."