Well he was doing fairly well until he got to the "You earn $80,000 cause your boss keeps $20,000 in taxes" part.
Wrong your boss feels you are worth $100,000 to him and that is what he pays you. He just has to take out the governments $20,000 before he hands you the rest.
If an hourly worker is working for $10 an hour and the Fair Tax passes do you really think a boss is going to walk up to a worker and say "Hey, the Fair Tax passed, I'm only going to pay you $7.50 and hour."
Thanks for the ping
Actually you boss has no claim to that 20k, because you will still have to pay taxes on what you buy. He never got to keep it before, and he doesn't get to keep it under fairtax.
The writer's argument centers on a mistaken assumption about what percentage of a product's cost is labor and what percentage is fixed costs of production. He seems to feel 100% of the cost of an item is labor, yet we know that is not true.
If you produce widgets, you buy raw materials, and machines, and buy a building and power, with which to make them. Then you hire people to run the machines.
Every one of those items is taxed today. You pay tax on the machines (because they are embedded) you pay tax on the raw materials (because those taxes are embedded in the price) Same for the building, electricity, etc.
You also pay the employers half of fica for your employees. When you look at how this is done, its THIS portion, and ONLY this portion, of tax that is taken from the employers pocketbook. The rest is all taken from YOU (the employee).
Therefore, under FairTax, all the payroll withholding taxes, employee's half of fica are all passed thru to the employee.
And the employer's half of fica is pocketed by the employer and thereby reduces costs of the widgets sold. This half of fica is added to the other savings in raw material costs, reduced machinery costs, cheaper energy, etc, all the way up the line.
So you see the writer does not put forth a trutefull example, and clearly does not know much about the way business works.
Remember this: Busniess pays no taxes. All taxes that a company might owe are paid by the consumers. The corporate income taxes, the taxes on business property, the employer's half of fica, ALL OF IT is cranked into the price of that widget AND HIDDEN FROM YOU IN THE PRICE.
Under Fair tax, that's all gone, and you pay 23%.
I don't think he read the WHOLE article before posting.
Obviously you did not comprehend what he was saying. What he said was in order for prices to fall 20%, wages would have to be cut. That is how the fair taxers came up with their numbers. It was not the authors doing, it was the fair taxers research.
Perhaps not. In that case, everyone would have more money... and pay the 23% tax on top of existing price levels.
Obviously, the FairTax is not a magic money machine that allows the government to be funded at existing levels while everybody gets richer. It's unfortunate the the original garbled Boortz/Linder presentation left people with that impression.