Whereas economists agree that the employee currently bears the ultimate incidence of this tax (CBO even acknowledges this), nothing in the FairTax Act requires wages to increase by this amount. Therefore, when attempting to project the impact on prices, it must be considered as a potential contributor to price reduction.In general, I think businesses might take that money and reduce prices a little bit, raise wages a little, and give a greater return on their investor's money. But if this plan is revenue neutral (which I don't think it is), all of that money must be put back into prices through the NRST. In the terms you were using yesterday, overall purchasing power is not increased.
"...all of that money must be put back into prices through the NRST. In the terms you were using yesterday, overall purchasing power is not increased...."
I disagree......
The annual compliance cost savings, estimated to be in excess of $200 BILLION a year, will yield real increases in purchasing power on day one. Moreover, as the US attracts capital, real wages will increase....thus increasing purchasing power over the long term.