[Kellis91789]

Goddess,

It sounds as though you are expecting it to be a zero-sum game where the overall effect on prices, taxes and purchasing power would remain unchanged.

I think this leaves out the differences in economic efficiency. The FairTax promises to remove large unproductive costs -- for compliance and distortions of business decisions.

To me, this means that there should be a net gain in purchasing power.

[Conservative Goddess]

"To me, this means that there should be a net gain in purchasing power."

I agree....over the long term. If you stop for a moment to consider all of the industries that currently rely on this income tax code or are subsidized by it: Tax Accountants, the life insurance industry, tax shelter promoters, lobbyists, software folks, office supply houses, tax lawyers, estate planning lawyers, tax court employees, tax law publishers like CCH, Westlaw, Lexis-Nexis, etc. There will be a number of folks who are going to be obsolete, overnight. Their purchasing power is going to go to zero, overnight. I suspect that is part of the reason that Bush & Co. are hesitant to enact the FairTax. Once the economic engine is unleashed, these folks will eventually find new jobs...and at that point, total purchasing power will increase. Until they find new jobs, the inefficiency that will be eliminated will increase the purchasing power of tax payers, at the expense of the tax industry leeches. I don't see a net gain until the ecomony takes over and creates new jobs.