[balrog666]

Read the book. Something like 22 percent of the price of any retail item is embedded taxes -- and they go away. Drawing upon the actual events that surrounded the failure to renew a tax on airline ticket prices, the authors figure the customer will actually see prices fall rapidly to their pre-tax level. In other words, the price of goods won't go up.

Sorry, you must have missed it: the book is wrong. The argument is wrong. Always has been, always will be.

The single (!!) study the book was based on assumed that net wages would not increase (that is, that the employee's portion of FICA and all personal withholding) would stay with the employer just so he could afford to reduce prices. The study author (Dr. Dale Jorgenson of Harvard) was out of the country for the last year, but has returned and has essentially disavowed the book in it's entirety.

It's pretty simple: workers either get their full gross pay or prices come down substantially enough to compensate for the retail price increase due to the FAIRTAX. Take your pick, but the former won't work and the latter is not legally possible.

[Junior]

The single (!!) study the book was based on assumed that net wages would not increase (that is, that the employee's portion of FICA and all personal withholding) would stay with the employer just so he could afford to reduce prices.

The employer no longer has to pay anything to Social Security, or Medicare or anything else. This is revenue neutral and takes care of ALL the embedded costs. Like I said, read the book.

[pigdog]

Wrong again, balrog666. The FairTax price reduction is not merely based upon Jorgenson's analysis. Nor does it depend upon wages being redced.

In addition, Jorgenson has not "disavowed the book in its entirety" (or even at all) ... that's merely you SQLers that have done that in your attempts to do anything possible to inhibit the FairTax.

It seems pretty clear that what will occur is the workers will be getting their full gross wages and there will be a sizeable price reduction also. Whether it might be 10, 15, 20, 25% - or perhaps more - is not yet known.

BTW, you got your claim bassackwards I think when you said "..workers either get their full gross pay or prices come down substantially enough to compensate for the retail price increase due to the FAIRTAX. Take your pick, but the former won't work and the latter is not legally possible."

In any event both parts of that are going to prove to be incorrect and we'll see wages holding up just fine and prices declining. Don't forget there will be some rapid economic expansion also and that will help things economically as well (and that's from Jorgenson within the last month so your "disavowed the book" business is even sillier).

You guys get some truly quaint theories from out of nowhere. I'd sooner believe the 75 economists who say workers will get 100% of their wages and benefits that the folderol promoted by you and your pals.

I've noticed that you're another who has no tax plan to offer as an alternative. Good work!