Actually, SAJ, if the interest charged on a loan is a taxable service fee, which I have read it would be if the item purchased is new, then the Fed's rate setting would amount to setting the rate of interest on the loan indirectly, and would affect the amount of tax paid on any purchase made on credit.Actually the tax on interest is on any loan (new or used) purchase. The tax is 30% ON the difference between the rate you pay (or earn) and the coresponding Fed fund rate, which is determined monthly by yet another appointed pinhead called a secretary.
Go to HR25: `SEC. 801. DETERMINATION OF FINANCIAL INTERMEDIATION SERVICES AMOUNT. under `(3) IMPLICITLY CHARGED FEES FOR FINANCIAL INTERMEDIATION SERVICES.
You can be one of very few to ever read it including the chest pounding, book thumping Fairtax parrots.
Since the average person who paid off a 30-year loan at 9% will pay three times the initial amount borrowed, (counting taxes and insurance), the government will eventually collect 90% of the principle amount in taxes on the purchase, effectively raising the payout amount to four times the amount borrowed.
Instead of a deduction for interest, you get taxed on it.
That is just one example, vehicles, and any other goods one might normally finance as well, would be taxed on base price, and interest paid.
I forsee a serious slump in purchases in my magic 8 ball if this ever passes...