Although I earlier agreed with the SQLers that you couldn't both give the employees withholdings back to them and also use THAT money to reduce prices it now occurs to me that that particular argument is where they hang much of their argument.
It is true you can't double dip on that particular money but that is not where the authors of the bill intend to get the price reductions. That is where the increased purchasing power will come from, for sure, because it is now going into the market place rather than to government coffers.
The author of this Money article obviously doesn't understand the bill either. However, it really doesn't matter whether the employer keeps the money or rightfully gives it to the employees. It is additional money in the business community, or market place, just the same. The rest is a personnel problem.
As has been explained 1,342,698 times on these threads, the price reduction will result from tax elimination and tax compliance cost reduction, and competition. If the employer decides to keep the employees money that will still be part of the cost reduction equation.
So, anyone caring to truly look at this matter will see that there really is an increase in purchasing power through increased spendable income for the common household's basket of goods AND lower prices on everything. Or said another way, prices remaining the same, after tax, and spendable income increasing.
That is why even skeptics grudgingly admit a dramatic economic boosts. Where else would it come from?
The author of this Money article obviously doesn't understand the bill either. Did you actually read the article? The author probably presented a more thorough understanding of the bill then I have seen presented by anyone. It wasn't a piece a propaganda like most Fair Tax pieces, and it wasn't a complete hit piece like William Gale does. It was a balance and honest look at the pros and cons of the tax. A bit too honest for some fair taxers.