[Always Right]

But that 9% is from a total of 22% embedded taxes. An employer could choose to keep more than 9% for the purposes of paying or removing embedded taxes, couldn't he?

Yeah, 9% is about what he could reduce prices if businesses were happy earning the same amount. But with his employees pocketing more money and prices going up, will business owners be happy to just maintain their same profits? Seems like a cute way to assume business owners will see their purchasing power decrease.

[robertpaulsen]

"But with his employees pocketing more money and prices going up, will business owners be happy to just maintain their same profits? "

He knows that foreign manufacturers don't have that 9% to play with, so they're stuck. Knowing your competitor can't lower his prices, why would you? You're just leaving money on the table.

[pigdog]

Bassackwards, Rongie. Prices will go down when the income tax is removed, not up. They only increase when the FairTax is imposed and even then most people will pay a far lower effective tax rate than under the income tax ... and on lower-priced goods. That "$100 baseball bat" that you have to earn $114 to buy (or more in higher income tax brackets) will now fall to $91.00 plus the FairTax or $98.12 ... and that's all you have to earn to buy it.

And there'd certainly be no reason to maintain the same profits since with the greatly expanding economy of the FairTax you'd be more likely to expand the profits by doing more business. The purchasing power of the business owner will increase also, just as for the wage earner.