?????????? Just how does this happen? Under the current system, assuming no state or local witholding of any type, two employees each have a gross salary of $1000 per period. One has a wife and three kids, claims M-5 on his W-4 and has a "take-home" of $800 after Income & FICA. The other is single, claims S-1 on his W-4, and has a take home of $750.
Are you saying that with the Fair Tax, they keep getting 800 and 750 respectively? Who makes that call?
No one is making the call. It was just the analysis which supports the reduction of prices by 20% assumed the savings from employee taxes would be passed to the business. There is no mechanism to have it done. The way the law is, take home pay would go up but end prices to the consumer would have to go up accordingly.
Dear Ditto,
I was wondering the same thing myself.
But, that's the good doctor's theory, so what can we say?
sitetest