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To: pfony1
If we assume that the "average American" spends his entire paycheck on goods and services and also assume that "the fair tax" will increase the cost of what he buys by 22%, then the "average American" will need a pay-raise of 22% just to stay even.

Us fair taxers are accused of double dipping on this issue and now that has been clarified you aginners are guilty. It is not logical to assume that prices will be unaffected by reduced costs. The market takes care of that.

However, for the sake of discussion, assume you are correct. After a short while the market will again level things out. If prices go up and people can't buy then products will sit on the shelf and services will go unused. That will cause prices to drop and the increased economic activity will cause a greater demand for labor. That in turn increases what employers will pay for workers and things are settled back down again.

Let the market work. It is self-correcting and eventually benefits everyone. The Fair Tax does that. The present system is indirect central control and top down government management of the economy. That is a failed system everywhere it is used because it is designed to benefit the controllers, not the consumers. The market is the Golden Rule in operation, by necessity.

58 posted on 09/15/2005 9:02:48 AM PDT by Mind-numbed Robot (Not all that needs to be done needs to be done by the government.)
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To: Mind-numbed Robot
Yes. Remember a consumption tax puts power into the hands of workers and consumers. If they're not paid well, government revenues suffer and businesses lose profits from not being able to sell their good and services. So there's an incentive to make sure people are able to buy the things they need and corporations make a profit and the government is funded. After an initial period of uncertainty, considering its advantages, we'll wonder how we ever got along without the Fair Tax in the first place.

(Denny Crane: "Sometimes you can only look for answers from God and failing that... and Fox News".)
196 posted on 09/15/2005 12:28:00 PM PDT by goldstategop (In Memory Of A Dearly Beloved Friend Who Lives On In My Heart Forever)
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