>>”Those embedded taxes can not come out of the product unless employees agree to take a cut in pay, which ain’t gonna happen. Price go up significantly under the fairtax after the 30% sales tax is added on the price.”<<
Well, if the employees’ wages DON’T go down, that means that their take-home pay will RISE significantly, say by 25-35% depending upon the amount of withholding and SS taxes now being taken out. This will give them the added funds to pay the Fair Tax.
Realistically, though, wages will drift lower over time until an equilibrium is reached at lower levels of both wages and prices (pre-fair-tax) because of competition from imports, which will otherwise be lower even after the fair-tax is applied to them. So, logically, wages WILL adjust and the embedded tax WILL eventually come out of prices. In other words, your assessment is probably incorrect and you should consider re-thinking it, assuming you’re serious about trying to figure it out.
To me, the most complex problem the fair tax will face is how to deal with people buying goods through a business and then transferring them to personal consumption without paying the tax, i.e., the black market problem. It won’t be anywhere near the 100% suggested by one poster, but it could be significant unless a way is found around the problem.
I wonder if just labeling all sales of certain products as taxable because they’re consumption items and then allowing businesses a credit for all sales tax paid in the month has been considered? Anyone know? That wouldn’t completely solve the problem, but it would go a long way, I think.
By the way, I’m only now getting into thinking about this, but I’m pretty sure Huckabee is going to be our next president, so I figure I’d better start paying attention. How come none of the rest of the “conservative” Republican candidates have a plan to take on the IRS? Or at least a flat tax proposal? If they do, they’re sure not very proud of it, as I haven’t heard anyone but Huckabee talk taxes. Shows leadership, doesn’t it....
Absolutely, but that does not help out people who rely on savings and fixed income. Wage earners will make out under the fairtax once they get their share of the $600 billion in yearly prebate checks. It is a zero-sum game in theory because the same amount of net taxes are suppose to be collected. There will be winners and losers. My problem is the fairtaxers misrepresent it so it appears everyone is a winner. Retirees will get shafted.
Duncan Hunter has signed on as a co-sponsor of the Fair Tax, and Fred wants a flat tax.
Oh wait, you must be watching the MSM - they’ll never report what conservatives want to hear.