You apparently do not realize that it is the same situation as at present where the Federal government taxes states by forcing them to pay employees more to compensate the employees for paying federal income tax (as well as state).Sorry, your example is crap. First, a tax on an individual is not a tax on the source. Second, the state employee would pay FairTax on their purchases. (According to your logic, the state government employee could be exempt from paying the FairTax and the state could pay them less.) In addition to the employee paying taxes when they spend their wages, the state pays the FairTax on the wages it pays the employee No other employer besides government has to do this. This is not the same situation as it is at present.
Giving a tax-free advantage to any government entity is a really, really, really poor idea. In fact, it's a non-starter. Apparently you really DON'T grasp the significance of that.That's irrelevant to my point. The point is that state and local taxes would have to be raised to pay this tax. People should know that under the FairTax they would be paying a very significant portion (much larger than today) of their federal
My example is "crap"??? Better check your own Nightie since the federal government DOES tax other entities right now (including even itself) through the existing tax system and you seem unaware of that.
The tax on an individual IS in effect a tax on his employer who must raise his expenses to pass on the money for the employee to pay the tax.
In addition, the governmental unit is also taxed in another manner by having to pay for example the ER portion of withholding at 7.65% ... or perhaps you think all governments are somehow not obligated to pay this to the feds (or even the feds themselves by shorting their employees of that payment)?????
That certainly puts the lie to your "crap" statement and it's something you Squirrels ALWAYS ignore when attempting your Chicken Little approach to tax-terrorization of the uninformed. You seem to think that 7.65% of all government wages is chopped liver. Got news for you - it ain't! In addition, as has been pointed out to you more than once by other posters, not all governmental employees' wages would be subject to the FairTax ... but you've chosen to ignore that too and go on pretending 100% would be taxed while the ER portion is merely ignored.
And you SQLers talk about FairTax supporters double-counting and misstating!!! That's exactly what you do. You merely try to warp the Income Tax Unfree Lunch all out of proportion.