[Always Right]

"Private consumers would receive lower (gross) wages under the FairTax, because producer prices fall."

Yeah, tell that to my workers. And tell that to union workers who are under contract, or any employee under contract for that matter. It is not possible for producers to ring out all these costs. The extra money goes into the pockets of the workers, and we are immediately hit with a 15-20% rise in prices the day the fairtax take effect. Try running that through the models.

It's cute what they assume in their models (higher state taxes, lower gross wages) but never talk about in their little propaganda papers.

[pigdog]

">"Private consumers would receive lower (gross) wages under the FairTax, because producer prices fall.""

That's not what the paper says overall or means. That's merely the technique of the Out-Of-Context quotation to barf up a strawman. The paper actually takes the position of wages staying the same and prices rising by the FairTax amount - which as I've just explained isn't too likely IAE.

For more information about it, check post #323.

[Dimples]

Yep. In reality, the implementation of the FairTax, using Kotlikoff's reasoning, but more realistic assumptions, means that either:

Monetary inflation must occur (thereby devaluing the purchasing power of asset holders)

or

Real Income must shrink (thereby devaluing the puchasing power of current income earners)

or

some combination of the two.

As Kotlikoff repeats: MV=PY.

[pigdog]

You might try actually reading what the paper says instead of taking the interpretation of a single FairTax opponent.

Kotlikoff, etc. make no such prediction. Read more than just the single out of context sentence to see what is being said.