Of course they do. But your plan does not get the savings to the business owner. Your plan results in wage earners taking home most of the taxes. How many times must this be explained???? A thousand???? A million???? What does it take to get that simple fact through your thick skull? If Business owner do not see all these savings from the elimination of the tax, they have no way to pass it on to the consumer.
It is no more my plan than the income tax is your plan. I support the nrst, you support the income tax. However, it is stupid to call it "my" plan.
Secondly, the savings do get to the business.
WHile retail consumption includes the tax, all of the supplies in the chain of production are not taxed.
So a baker's flour, ovens, power bill, copier lease, etc will all be less expensive by about 22%. It is easy to generalize this to all links in the chain of production. That's one way the savings get to the business. THere are others.
If Business owner do not see all these savings from the elimination of the tax, they have no way to pass it on to the consumer.
But business owners do see the savings. That's why they must pass them on to stay in business.
Sorry, you'll get used to me showing up late to all the good threads...
The point which I haven't seen discussed yet is that right now, the business owner agrees to pay the worker X per year. Of this, the business owner pays S salary which the worker sees, and puts T into the bank or whatever, to be sent to the government; and S + T = X.
Under the proposed Fair Tax, the business owner would still have S + T leaving his hands, but the worker would initially get to take home S + T. The amount paid by the worker to the government would depend on the worker's income and on the level of non-deductible expenditures the worker makes.
Could pay less than now, could pay more. But "initially" the worker has more money to spend, which will increase the velocity of money through the economy, which I guess is supposed to soup up the economy.
On paper it *sounds* like it works, but for two things which seem important to me. I'm no expert, so maybe I'm wrong:
a) the taxes are taken out at the point of purchase--so goods are more expensive, the worker has no intrinsic increase in purchasing power for any one item
b) with the initial spate of increased money, wouldn't that be *inflationary* ?
And, oh, yes, the other good part is that people who are richer can *voluntarily* pay less in taxes by cutting back on the number of things they buy, or shift to less expensive goods (Toyota instead of Lexus, say).
But that would tend to counteract the faster flow of money through the economy, wouldn't it? (You can cut your taxes, but only by not spending your money. Well, I guess the money could always go to savings and investment, so maybe that's not all bad.)
Cheers!