entitlement payments ($800B)The FairTax bill requires Social Security payments to be increased by the amount of the FairTax.
Federal and military pensions ($300B ?)Pensions would be an "employee benefit" and would be taxable.
block grants to State and local government ($600B)I'm assuming the state and local governments are actually going to spend the money. If the amount doesn't increase, the "real" value of these grants are reduced. That might be a good idea, but it's kinda hard to compare two systems when one is cutting the amount of government.
educational and research grants ($100B)Again, the money spent for research grants (research is not "tuition for primary, secondary, or postsecondary level education; or job-related training") would be taxable. If the government doesn't increase the amount of these grants, the "real" value of them declines.
probably other stuff that is not a "purchase" and is not an "employee compensation"Like what?
[The FairTax bill requires Social Security payments to be increased by the amount of the FairTax.]
Wrong. "This section makes sure that the cost of living adjustment for Social Security benefits includes
price increases, if any, caused by the FairTax." You see the "if any" part ? No increase in SS benefits if there is no increase in prices.
[Pensions would be an "employee benefit" and would be taxable.]
Wrong again. Contributions INTO a government pension are taxable. Payments FROM a pension are not.
[I'm assuming the state and local governments are actually going to spend the money. If the amount doesn't increase, ...]
The FairTax has no provision for increasing block grants to State and local government. Let's stick to the actual provisions of HR25, shall we ?
[Again, the money spent for research grants (research is not "tuition for primary, secondary, or postsecondary level education; or job-related training") would be taxable.]
Wrong again. If the grant for research is to a not-for-profit organization, then there is no FairTax. There is no FairTax on contributions to not-for-profit organizations in general. A for-profit company like Genral Dynamics would charge the FairTax on a research CONTRTACT but a University would not charge FairTax on a research GRANT. Is that clear ?
[Like what?]
How about foreign aid ? Or Katrina relief ? Or anytime the government is just handing out money rather than purchasing stuff ? Sure, the recipient may not be able to buy as much stuff with the government check, but that doesn't automatically mean the government check must be larger.