AR writes:
"I am very confident your numbers can only work if employees take a pay cut."
I don't see why a pay cut would be necessary, but just for a moment, let's assume the worst case scenario. Let's throw out all we know about economics and also ignore all the facts, evidence and experience, and pretend that competition and informed consumer demand doesn't exist.
Let's even say that prices after the imbedded costs are gone, but manufacturers, distributers, and retailers refuse to lower their price.
If I make a grand a week, but really only get $700 take home with the current system, and for simplicity's sake, I now take home the full $1000 (a 42.86% increase in available cash PLUS I get the rebate, am I not still better off with the FairTax?
Now, to make the scenario even darker, throw in a pay cut.
How much of a cut do I have to take to actually become worse off than I am under the current system? Will it vary along the pay range?
I don't believe that all of these possibilities would all occur at once, if they happen at all, but even in the furthest extreme, it'll be hard to be worse off with the FT than we are now under the IT.
Am I wrong? What if anything am I missing?
You must obviously be lying ... would the SQLers try to mislead???
Surely they can find a way to define you getting so big a pay drop under the FairTax that your grandmother will have to dress in old flour sacks.
Am I wrong? What if anything am I missing?
The problem is, if employees are pocking their full paycheck, 2/3rds of the so-called embedded taxes are still in the costs of the products. Your takehome pay will go up, but after the 30% tax is added, most prices will go up 20%, some will go up the full 30%.
CG,
Take a look at my post at #1206, please. Tell me what, if anything I am missing. Always Right is insisting that employees MUST take a pay cut for the FairTax to be viable.
I don't buy it, but in context, is it necessarily bad if the net purchasing power is the same or better?
Slap me silly if I am wrong, please.