thanks for the ping, you are right about the way that most of the Fair Tax crowd acts towards anyone who asks questions. My sticking point remains that I don't see how the costs of goods are going to come down.
Looking at this as a businessman, say I have employees that make a total of $1 million per year right now. At the present time, I am writing checks totalling about $150,000 to the FedGov for FICA, about $200,000 for federal withholding, and about $60,000 for state tax withholding. The remainder I write checks to my employees. My out of pocket cost is the $1 million.
Under FairTax I will write out the same check for $1 million but it will all be to my employees directly. My payroll costs haven't changed. How am I able to reduce my prices by 20%+ allowing prices to stay the same when the 30% FairTax is added?
Under FairTax I will write out the same check for $1 million but it will all be to my employees directly. My payroll costs haven't changed. How am I able to reduce my prices by 20%+ allowing prices to stay the same when the 30% FairTax is added?
You didn't write checks for $1,000,000 before. You wrote checks for $1,075,000, because the employer FICA isn't withheld from the employees' paycheck. That's $75,000 savings you can pass along right there. You also have to take into account the reduction in prices your suppliers are able to give. And, most importantly you have to consider the income taxes and FICA taxes on your own income, whether self-employment tax or the FICA tax on the salary you give yourself.
I believe you may have said before that you didn't want to be a tax collector for the feds? Do you realize from your example that you already ARE a tax collector for the feds? $350,000 worth.
Also, you are using the tax inclusive rate on your prices dropping but the tax exclusive rate for the Fair Tax rate, which makes your claim appear more "impossible" in your eyes, and in the eyes of those you are trying to influence.