[upchuck]

FWIW, Neal Boortz has published info correcting some errors of omission in the book. Here's a link.

Later on he writes:

Double-Taxing those who have already worked and saved for their retirement. This one is so easy; I just don't know why some people are having trouble grasping it. Retirees who have are living off their savings are still paying taxes. They're paying the embedded taxes present in everything they buy. Those embedded taxes will simply be replaced with the embedded FairTax. Virtually an even swap. Retirees will not be paying any more in taxes than they're paying now.

For people who are living on pretax retirement savings this is true. But I don't believe it is true for those living on post-tax retirement savings such as a Roth IRA.

Twice now I have heard Neal on his radio show spar with callers about this. And both times he has just swept it under the rug, cut off the caller and gone to a break or taken the next caller.

[Always Right]

Twice now I have heard Neal on his radio show spar with callers about this. And both times he has just swept it under the rug,

And he should. The fact is after tax prices are going up if the fair tax ever becomes law. Anyone with any kind of savings will see the buying power of that money significantly reduced. Boortz has now admitted that prices can't come down like he says in the book (unless employees miraculously agree to a pay cut). Incomes will go up to offset these price increases, but those relying on savings will be hurt. No amount of tap dancing will change that. If I was Boortz, I guess I would want to change the subject too.

[ancient_geezer]

But I don't believe it is true for those living on post-tax retirement savings such as a Roth IRA.

What acts to prevent a retired person withdrawing money from a Roth from paying the tax burden that embedded in the price of all goods and services under the current tax system?

That is an automatic second taxation, not to mention the corporate taxes that are paid on earnings before dividend distributions in Roth equity investments.

[Mind-numbed Robot]

As I understand, what he said was that retirees are paying embedded taxes now, period, no matter if it is pre or post tax income. They are now paying the taxes which will be replaced by the NRST. The taxes they pay with the NRST simply replace the embedded taxes. It is an even swap, no gain, no loss.

The few retirees I have seen complain about "double taxation" won't be happy unless they get all their income taxes refunded before they support the NRST. They simply don't understand that they are being "double taxed" now, under the present system. Nothing changes along that line with the NRST.

[groanup]

Neal has a real problem with this. I agree. The idiot is about to screw up the concept which is absolutely viable. He is such an ego head that he can't see his idiotic mistake. I have been listening to him since about 1972 and this is his albatross. He has always been a talk-show host which I consider a lowly profession. Personally, I don't think experts are experts and that is why I give Neal a big banana for the book, but he made a major gaffe in the book and his stupid explanation is close to jeopardizing the whole thing. I agree that the book has garnered the attention of a lot of Pols but if he doesn't address the big gorilla in the middle of the room he has lost all credibility and he will go out like Dan Rather.

This concept has always been too important to leave up to a minor prophet like a talk show host but I have to give the guy credit, he probably created more dialogue about the subject than we have here on FR.

[GregoryFul]

This is one "big lie" the "Fair Tax" mavens are selling. Retail prices will fall such that the gross price for goods will not change - because the manufacturer will save the amount of taxes in the production of the good - in corporate taxes. This is absurd on the face - corporations do not pay the entire tax burden in this country, so they cannot reduce the wholesale price to that which would equalize the "Fair Tax". Gross prices would go up.

Now, a wage earner perhaps would not be bothered by this, because his gross wages would go up sufficiently to account for the tax, perhaps. Fixed income people, and those with savings would see an immediate 30% charge on their savings and reduction in their fixed income.

Its a "shaft the provident" tax, from what I see.