This goes to the heart of what I've been trying to get an answer to since the book came out.
If I gross $ 1,000 per week, I presently take home about $ 750. My employer is required to pay what was withheld from my check ( $ 250 ) PLUS additional taxes of almost $ 80 to the government. If FAIR tax gets enacted, will I be paid:
a. $ 1,000
b. $ 750
c. $ 1,080
I just want an answer to that one question.
The answer is
d. What you are willing to work for.
You'll have to ask your employer. The model Jorgensen used assumed (for simplicity, most likely) that the take-home pay would remain constant, and the former taxes would be kept by the employer. Again, this was for modelling simplicity -- it does not require that this happen in reality.
It is very unlikely to happen, actually, as it would require mass violations of existing employment contracts/agreements. If my gross salary is contracted at $50,000 (before taxes), then my employer would be violating our contract if he only gave me the $38,000 or so I'm currently getting as "take-home" pay.
You would get to take home $1000, but prices would go up 20% or more. The point being, when the fair taxers did their economic modeling, they ASSUMED you would take a pay cut to $750. Therefore, their claims are misleading.
However, this means that before-tax prices will generally not fall enough to offset the FairTax. They will fall a bit (as producers are relieved of administrative overhead costs, and forced by competition to pass the savings along), but not by anywhere near 20%.
I am sure you have more education than I do.
But, you would get the $1000.
The employer does't pay that. He takes it from your check and sends it to the IRS.
If I gross $ 1,000 per week, I presently take home about $ 750. My employer is required to pay what was withheld from my check ( $ 250 ) PLUS additional taxes of almost $ 80 to the government.If FAIR tax gets enacted, will I be paid:You would probably get $1000 but that doesn't change the government needing the $250 withheld from your check plus the $80.00 from your employer who won't be paying it anymore...Any guesses who will?
a. $ 1,000
b. $ 750
c. $ 1,080I just want an answer to that one question.
The 23% teaser rate is only for the first year. Do the math. You would be taking home $1000 but the government still needs the $330.00 previously paid (and then some)...that won't change, even the Fairtax brags that it's revenue neutral.
If you're single you'd get $69 a week rebate. The only way for the government to get that $330.00 from your $1,069 spending is with a 44.6% (not 23%, not 29.87% or even 33%) sales tax not including the cost of the rebate...("revenue neutral" AND a "rebate"...the "rebate" isn't a tax cut, it has to come from somewhere).
That's why I say your takehome pay should be $1080 + $69 ...Then the sales tax rate would (only?) have to be 40% (not including the cost of the rebate).
You will be paid $1000.
If I gross $ 1,000 per week, I presently take home about $ 750. My employer is required to pay what was withheld from my check ( $ 250 ) PLUS additional taxes of almost $ 80 to the government. If FAIR tax gets enacted, will I be paid:
a. $ 1,000
b. $ 750
c. $ 1,080
I just want an answer to that one question.
Money whould have you believe that the $250 now being withheld will simply evaporate.