So how will businesses sell their old inventory, since it is 20-25% more expensive than newly minted product?
Vendors receive a 23% transition credit for inventory held prior to implementation of the NRST.
Incidentally, in Europe where they have a NRST, prices for comparable products are considerably higher than they are here.
There is no NRST in Europe, they have a VAT that is levied on all business-business purchases that becomes embedded implicitly into the price of products.
Definition [ http://www.encyclopedia.com/articles/13330.html ]:
value-added tax
levy imposed on businesses at all levels of production of a good or service, and based on the increase in price, or value, added to the good or service by each level. Because all stages of a value-added tax are ultimately passed on to the consumer in the form of higher prices, it has been described as a hidden sales tax. Originally introduced in France (1954), it is now used by most W European countries.
The NRST is levied only on retail purchases, for final consumption and is separately charged from the shelf price so that it is totally visible to the customer, price & tax are separated, thus is the precise opposite of the European VAT. The NRST does not tax purchases made for investment or business purposes, a VAT does.
The current income/payroll tax structure now in place acts like a subtraction method VAT, in that it is a levy imposed on businesses at all levels of production, it is passed on to the consumer hidden in the price of goods and services(more than 22%[the lowest estimate that prices would fall with enactment of the NRST] of the price of all goods and services), lower wages, lower returns on investment for investors, and higher interest rates(as much a 25% greater than they would be under the NRST).
Purpose of the NRST is to replace all Federal income/payroll taxes and gift/estate taxes with a single tax levied on all new goods and service once and only once at the retail level paid by the final consumer(the purchaser) of those goods or services. Goods that have been previously taxed under the NRST (i.e. used) are not taxed on resale.
The NRST is a specific remedy and replacement for the implicit VAT we now pay in the form of inflation and lower income(i.e. the corporate income/payroll tax). The NRST repeals over 95% of all Federal taxes in place and replaces them with one simple, easy to administer and understand, Retail Sales Tax.
So what is the "FCA" you spoke about?