Employee benefits, disability insurance, or wage replacement insurance payments, unemployment compensation insurance, workers' compensation insurance, and the fair market value of any other consideration paid...Once again, thanks for pointing that HUGE extra cost out.
Whatever the total current COMPENSATION is, it is still less than the total COST of the employee -- it is less because there is the SS/M tax currently being paid.
Therefor, it is MATHEMATICALLY IMPOSSIBLE for the cost under the FairTax to be 30% higher than the current total cost. (1.3 * (a - b)) < (1.3 * a)
Don't forget that the FairTax doesn't apply to ALL government employees. Only those not engaged in a government enterprise and not involved in education. Which means, for example, that Postal workers' and schoolteachers' salaries are not subject to FairTax. Yet, the government DOES save the SS/M tax they used to have to pay on them. So the government saves 7.65% on ALL its employees and has to pay 30% on SOME employees. At the State level, what they save in SS/M tax on teachers will more than pay the FairTax on the other employees. So, really, we are only talking about Federal employees that will cost 21% more on average.
And if we are going to discuss the effect on government costs, how about the savings on the national debt as interest rates fall to the current tax-free interest rate ? Or did you want to ignore that $75 billion per year savings ? Or how about the extra $230 billion in revenue from the expected 10% growth in the economy the first year of FairTax ? Do you really imagine this $305 billion net change in revenue/debt-service won't cover the FairTax the government will have to pay on its employees ?