[RobFromGa]

I could accept an 18% net increase in prices to keep my gross paycheck and eliminate all income and payroll taxes.

That won't work because it would screw people with accumulated wealth or on a fixed income. It also wouldn't help us be more competitive with foreigners.

The only workable approach is lower gross salaries, equal to what we take home now, with prices that remain the same for domestic goods.

[RobFromGa]

There is a typo in the underlined sentence, it should read:

So, Dr. Jorgenson, whose report you are relying on to support your calculation of embedded taxes, is stating that in making those embedded tax calculations he was assuming that the worker would keep his current after-tax amount, NOT that the worker would keep all of his current gross pay-check.

Error was made while I was formatting for FR post, not in original letter.

[KarlInOhio]

Just imagine an employer telling everyone that their pay is going to be cut when the sales tax starts. Also, the pay of singles will have to be cut more than married couples with kids because singles are hit harder by the current income tax system. It's more likely that they just pay the employees the gross.

I would expect that domestic producers would be aided against imports. Importers can now play around with the amount which their US subsidiary pays for the import to make sure that little or no profit is made in the US. If a sales tax is put in place, that advantage disappears.

[Wayne07]

That won't work because it would screw people with accumulated wealth or on a fixed income. It also wouldn't help us be more competitive with foreigners.

Wouldn't it help by making exports cheaper, and imports more expensive? All the embedded taxes would be removed from the business process, allowing businesses to sell inexpensively abroad. At the same time, All imported goods would have the fair tax tacked on, increasing the prices, and effectively taxing foreign companies.

[N3WBI3]

That won't work because it would screw people with accumulated wealth or on a fixed income. It also wouldn't help us be more competitive with foreigners.

Exempt exports, make American goods cheaper around the world..