Fair tax great idea. Just hold off until I get the new car I've been saving for. The car I want is approximately 26,000. I figure 28% Fair tax, 6.25% State tax and registration. My tax will probably be around 8,900 at the show room floor. Got to save more, say around 34,900 out the door. Lot of money for a retiree with fixed income. Haven't read the book, but maybe there might be a way I could spread the tax out over a few years. Still will have a car payment to deal with. Any real suggestions? Major purchases seem to me will be a problem.
Not as much of a problem as you may imagine. In fact, you'd probably be better off to wait until the FairTax is in place. Here's the way it shakes down.
Prices will drop a significant amount due to the removal from current prices of what is often called a "hidden tax" which is the embedded tax cost in everything we buy and it starts and builds as the thing progresses from inception on to final consumption, getting a bit more expensive at each level.
In addition to that, you will be receiving more of your paycheck if you're working, or - if not - you'll not be taxed on savings and invesments either/both of which will help you accumulate funds. Moreover, interest rates will drop so that your car loan will be at about a 2% lower rate.
So there are several things that help you get that car with the FairTax:
1) Lowered prices
2) Higher earnings or investments - free of tax
3) Lower interest rates.
In addition to all that, when the FairTax becomes law most states will do the reasonable thing and conform their state income and sales tax laws to the FairTax meaning that they'll use the same tax definitions as the FairTax. this both eliminates state income tax (if you have it) and will also lower the state sales tax rate dramatically in most states - down to something like 1/4 to 1/3 of the present rate. There's a good discussion of the state tax situation here so you can get a better handle on what might happen in your state:
http://www.fairtaxvolunteer.org/smart/tax_system.html
Actually, I'm holding off such a purchase for fhose very reasons. Right now if the FairTax is passed as a revenue neutral bill (which it should be), the FairTax federal rate would be about 19% which covers what are payroll wihholdings in the current system as well as all income (and other) taxes specified in the bill.
Altogether I believe you'll spend a good bit less than you're now thinking you will. You may even wish to upgrade the options some!
An income tax diminishes income. There are many examples of this. This was one reason why Reagan became a Republican, because of high marginal income tax rates that were affecting him. Look at Europe's high rates, and how the US is (comparatively) better off.
A sales tax diminish sales. There are many examples of this too. Look when (New York state?) reduced the sales tax on clothing. Sales increased dramatically. Look at the difference between Oregon and Washington. One has an income tax, one has a sales tax.
A 23-30% sales tax will DEFINITELY hurt sales. To not understand that woefully underestimates incentives/costs and people's/consumers/taxpayers reactions.