One of the problems I have with the fairtax is this: With the implimenting of a huge federal sales tax do we still pay the state sales tax? if so, our sales tax could be more like 40%. Also, I understand that we would only pay sales tax on items once, so a new car buyer would pay the tax, but the used car buyer wouldn't pay it at all. Who in their right mind would buy a new car?who would buy anything new that they could get used? And second, I could see the employer who normal hires someone for 10$ an hour cutting his pay scale for any new hires to 7.50$. I think this could be a problem. I think that most places will pay the least they have to and if there are people willing to work for 7.50 then they won't pay 10$.
Do you plan to take a pay cut to $7.50, that would prevent you from having the same standard of living?
I wouldn't. Doubt anyone else will either.
If employers could find people to take $10 an hour jobs for $7.50 today, the going wage would be $7.50 now.
The same amount of taxes get collected under the FairTax legislaton, just from retail purchases instead of being extracted from you before you even see it under income & payroll taxes today.
A lot of wealthy people.
Not many cars last longer than 7-10 years. Most people just don't maintain them that well. In addition, car manufacturers are pretty good at creating slick new body styles that some people "just gotta have"! So they buy it. I don't think that 25 years after the Fair Tax would be enacted that every American would be driving 26 year old cars. Do you?
Also, I understand that we would only pay sales tax on items once, so a new car buyer would pay the tax, but the used car buyer wouldn't pay it at all. Who in their right mind would buy a new car?who would buy anything new that they could get used?
People don't stop buying new items under our current tax structure that has many hidden taxes. People will be more inclined to purchase new items under the Fair Tax that abolishes taxes for business to business transactions. Elimination of hidden taxes will lower prices and considerably lower compliance costs will lower prices further.
And second, I could see the employer who normal hires someone for 10$ an hour cutting his pay scale for any new hires to 7.50$. I think this could be a problem. I think that most places will pay the least they have to and if there are people willing to work for 7.50 then they won't pay 10$.
The one factor you forget is competition. It is highly unlikely all employers will pay the same wages. Some number of employers will be willing to pay more for experienced workers than other employers. Eventually the other employers will be forced to raise wages or make inferior products and provide inferior services. Those employers will never make it to the top or may go out of business. I suggest you read more Fair Tax information at www.fairtax.org
(Denny Crane: "Sometimes you can only look for answers from God and failing that... and Fox News".)