Unfortunately you are incorrect. The cost of income tax is embedded into the cost of the goods and services. That is where the money to pay the tax comes from. So, in the US, typically 20% of the price of something is actually the tax burden of the people making or providing the good or service. The flat tax does not change this. The cost of taxes are still built into the price of the good or service being consumed.
When the good or service is provided via import, a large potion of that 20% leaves the United States and goes back to the country of origin. This gives foriegn competition within the United States a huge advantage over domestic suppliers. If the tax were no longer embedded in the price but added on at the time of sale, then it would not matter if the good or service was imported or not, the 20% would stay in the United States. Imports would lose a large part of their advantage and the US economy would boom. Just look at the current trade deficit. What would it do for tax revenues if 20% of that deficit stayed in the United States as sales tax?
The Fair Tax is the single greatest step the US could take to bolstering our economy and stop the flow of jobs out of the country.
So, in the US, typically 20% of the price of something is actually the tax burden of the people making or providing the good or service.If that was fact (it isn't) how does the 23% Fairtax rate (actually 30% as sales taxes are calculated) replace that, all the other taxes, reduce prices 20% AND fund a refund to every family in America, as they promise?
You can be the first to answer that after 10+ yrs of asking.