Posted on 08/24/2005 8:27:44 PM PDT by Man50D
If it's a "$100" item, the total will be $100 and the tax will be $23.00 of that - and it'll be shown that way on your receipt.
Overall, prices (including the tax) should stay about where they are now (your $100 item is still $100 but includes the tax) so it looks pretty good.
The consumption tax base is much larger than the income tax base so at a given rate the consumption tax will actually collect more money than the same rate with the income tax rate.
It's not just corporate income tax that is involved, but all businesses income taxes which are far more than just corporations. In fact, the way it will no doubt work out is that the FairTax will actually collect more in tax revenue than at present which will allow rates to be lowered rather quickly.
I've read this thread, not sure I believe the price will remain the same. Please explain how. Thanks.
Here's some information hat will explain it better than I:
http://www.fairtaxvolunteer.org/smart/faq-main.html#13
Actually, the low earners only pay 7.65% in payroll taxes. You aren't saying that employers will now give their 7.65% payroll payment to the employee, are you?
I've heard it said that many low earners pay more in payroll taxes than in income taxes. That means their total tax burden is less than 15.3%. Don't forget the EITC. People who receive the EITC could have a tax burden of less than 7.65%.
Quite a few economists think the employer's portion of payroll taxes is actually accounted for by the employee and should be considered as part of the employee's taxes.
Seems to be a difference of opinion, but it seems reasonable to me that it is part of his pay and so he pays 15,3% right now.
Don't know yet how this will work out under the FairTax, but I'd think it would go to the employee - others don't.
The EITC is actually a fairly complex burden that can have varying rates with different individuals. I'm not considering that in the analysis.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.