Replies

"You keep calling my example "biased." It is no more biased than any used by the AFFT, or any other participant in this debate"

Indeed it is biased and intentionally and heavily so. You merely took a guy, made his income basically tax free and compared that with a chosen example from the AFFT website (which was for two people, not one). In fact you changed the parameters a good bit since the AFFT example was for two people each receiving $1,081 in S/S and you chose to bias it as you did to specify a single person having the same amount of income. IOW your example is quite different.

The 5% you use for embedded tax is not at all supportable (except in your own Squirrels'-brain world of combatting the FairTax by any means at all). I agree that there are certainly circumstances where there will be instances where some pay more FairTax than under the Income Tax (that's never been a secret) and your biased example as you defined it is one of those since it was selected to be so.

Let's instead take your guy with the income you show for him and use a 15% hidden tax figure - probably more reasonable than your 5%. And let's see how the single guy compares with the FairTax example (which supported two people rather than one). Also note that this assumes the FairTax example makes no use of the purchase of used items and that all income is spent and none saved. We have:

Income Tax                  FairTax
$25,944 gross               $25,944 gross
-$3,892 (15% hidden tax)     $4,402 prebate
$22,052 net spendable       $30,346 net spendable
      0 tax on n. s.        -$6,980 FairTax
--------                    -------
$22,052 spendable           $23,366 spendable

In this example (which I believe is more representative), we have the FairTax supporting two people rather than one, paying almost $7,000 in tax AND still having more money than your single guy which means they could spend as freely as he and STILL save almost $1,314. That certainly doesn't qualify as the IT guy getting "screwed" as you so colorfully phrase it.

What's you beef with this "bias" charge? I purposely chose an example of a low income person that loses under the FairTax. I chose it because you and others continue to represent (falsely) that the FairTax is a win for everybody (except, perhaps drug dealers and illegal immigrants.) Of COURSE I changed the AFFT example. It is biased the other way! OF COURSE the example is "quite different." IT IS MEANT TO SHOW AN OUTCOME DENIED AND HIDDEN BY THE AFFT and OTHER FAIRTAX SUPPORTERS! Get over it!

So, perhaps without realizing it, you have now demonstrated the absolute NECESSITY for SIGNIFICANT price reduction for the FairTax to live up to its promises. IF price reductions are 10% your examples are awash; if they are less than 10%, you're screwed. If you live alone, you're screwed! So the argument comes back to where it started: How much will after-tax prices RISE under the FairTax? So far, the consensus seems to be that they will rise 17 to 24%, maybe more. No one has made a credible analytical case for anything less.

AND you still got the example wrong! You're comparing apples and oranges; and in the process completely obscure the truth. To come out ahead, you had to count on a lowered standard of living (yes the standard of living for two people living off of the same income as one person is lower!), DOUBLE the prebate AND reduce pre-tax prices 15% ... none of that pertains to the Single Retiree under the FairTax! Face it, the single, low income retiree LOSES under the FairTax.

But then, like a lot of the FairTax problems, you have to obscure the truth to make it sound better than it is.