And contracts are never renegotiated when conditions and/or rules of the game change?
If the Treasury loses authority to tax income why wouldn't the employee receive his/her entire paycheck after remaining deductions?
Ask Linder, the bills perpetual Congressional sponsor, and Boortz, the guy who wrote the book with Linder.
These embedded taxes include the combined tax burdens of all entities involved in bringing those goods or services to market, and that includes you, the employee, and the taxes you incur as a result of your employment.
We write in The FairTax Book that the competitive pressures of the marketplace will force prices down when embedded taxes disappear from the cost of retail goods and services, and we cite 22% as the average amount of those embedded taxes. Does this 22% include the income and payroll taxes that are paid by employees? Yes, it does...
http://boortz.com/nuze/200509/09152005.html
If embedded taxes are not removed, but just undergo a name change, then FairTax claims start to unravel. There is far less room for prices to fall. US made products are not more competitive in the global market, and imports are still attractive, price-wise, to US consumers. The cost of a new GM truck (I doubt they're paying any corporate income taxes at the moment) remains the same with the 30% sales tax added.
I agree with you that taking money away from employees is a hard sell, even if that money never made its way into their checking accounts, perhaps that's what the prebate is for.
Prices will not fall by the equivalent amount of the FT rate. They will tend to fall around 10-15% after the removal of corporate taxes, corporate payroll tax and compliance. Gross pay goes up by 20% and prices go up by about the same amount after the consumption tax is levied.