I think everyone is arguing over two different things.
This is a simplified model. But, by looking at the total dollars involved, it works exactly as Linder/Boorts have claimed. From my understanding of the book, they have always said it is the payroll tax, corp. income tax, and cost of complying with the current system that will cause prices to drop.
1st is the embedded payroll and corporate income tax ($0.8 Trillion last year from www.irs.gov).
2nd is the business cost of complying with the current tax system ($0.2-0.5 Trillion from several different papers).
If you add those numbers together, you get $1.0-1.3 Trillion. If we assume that comes out of the total retail sales ($3.9 T from www.census.gov), then that is right around 25-33%. Tack on the Fair Tax, and the numbers will be the same. This doesn’t even get into the cascading of the taxes and costs.
Heck, if you take $3.9T and multiply by the 23% inclusive Fair Tax number, you get $0.9T. That is almost equal to the $0.89T payroll and corp tax alone.
But, by looking at the total dollars involved, it works exactly as Linder/Boorts have claimed. From my understanding of the book, they have always said it is the payroll tax, corp. income tax, and cost of complying with the current system that will cause prices to drop. That is what Boortz claims, but that is not what the person who did the study says.
1st is the embedded payroll and corporate income tax ($0.8 Trillion last year from www.irs.gov).
Corporate income and 1/2 payroll comes up to $542 Billion according to the IRS ($194B corp. + 1/2 of $696B)
2nd is the business cost of complying with the current tax system ($0.2-0.5 Trillion from several different papers).
Of the $250 Billion of compliance costs that studies have show, about $100 Billion is costs to businesses. The other cost is time and money spent by individuals.
If you add those numbers together, you get $1.0-1.3 Trillion. If we assume that comes out of the total retail sales ($3.9 T from www.census.gov),
The tax base for the fair tax is closer to $10 Billion. Their base includes many things including a lot of government spending. You need to find nearly $2 Tillion worth of savings for prices to fall 20%. What you have is around $700 Billion.