[raybbr]

What The FairTax Book fails to mention is that prices can only fall this sharply if companies cut wages. I asked Jorgenson about this, and he agreed. Say your salary is $100,000 a year today, but you take home $80,000 after taxes. Your company is still paying that extra $20,000. In a FairTax world, it will save that money, and be able to lower its prices accordingly, only if it can reduce your salary to $80,000. In other words, your take-home pay is the same as before. Sure, you'd get to "keep 100 percent of your paycheck," as Boortz and Linder repeatedly write, but it would be a smaller paycheck. That's kind of a big thing to leave out.

Isn't this only true if the company still pays payroll tax? If they don't pay the payroll tax anymore why would they have to cut your salary?

[Always Right]

Isn't this only true if the company still pays payroll tax? If they don't pay the payroll tax anymore why would they have to cut your salary?

They don't have to cut salary. But when fair taxers claim prices will drop 20%, they are assuming that salaries are cut. And this has been confirmed by the fair tax modeler who did their research, and Boortz acknowledged it too.

[Non-Sequitur]

Isn't this only true if the company still pays payroll tax?

Why wouldn't they still have to pay payroll taxes?