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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.

So if the state employee was exempt from the FairTax, the state could pay them less - but they're not. So, using you logic, the state is paying the FairTax when their employees buy something and, on top of that, the state has to pay additional FairTax on those wages. That sounds like double taxation...

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)?????

I bet you weren't aware that any state that pays Social Security on their employees wages (there are some that don't) does so voluntarily. They have signed a "Section 218 Agreement" with the SSA. The federal government taxing the state government brings up constitutional intergovernmental tax immunity issues. These agreements get around that issue. Making the states pay FairTax may actually be unconstitutional (you do believe in federalism, don't you).

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!

I know that 7.65% is not chopped liver. I also know that 29.87% is larger than 7.65%.

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.

I bet you also didn't know that these Section 218 Agreements are irrevocable. States aren't paying employment excise because of the IRC laws repealed by the FairTax, the are paying them based on irrevocable agreements made under Section 218 of the Social Security Act. Would they still pay that excise if the FairTax became law? The FairTax bill does not address this issue at all.

More of your Chicken Little nonsense, Nightie. When combined with clever misdirection it can be very effective with those waiting to be fooled.

The situation isn't double taxation at all nor does your so claiming make it such. Unlike you I would not claim that the sate is (or is not) paying them more or less - that's up to the state - but I would think that generally a state (like most businesses in general) will be hard-pressed to pay them less. But as we all know governmental entities do all sorts of illogical things - so who knows.

If the state continues wages at 100% as will most of the businesses, then that is hardly a matter of being taxed by the FairTax, but increased takehome for those employees due to contractual obligations or other competitive wage pressures. Using my logic (and not my logic as misstated by you), the state (or other governmental entity) does not pay the FairTax for the employee since that selective decision is up to the employee in choosing his consumption, not the entity, and the additional money to the employee is caused by factors other than the FairTax.

It is certainly possible that some states may elect to drop their wage costs by sticking it to their employees. Under the income tax, the entity must furnish more money strictly due to the income tax system. The two situations are distinctly different and your attempt to make them the same falls flat. There is not double taxation here.

Any FairTax paid on some subset of employees wages IS a tax on the governmental entity involved just as at present when a entity has to tax itself by paying more to the employee who in turn sends it on to Uncle.

And you lose your bet on Section 218 since I am aware of it. I also know that it is not exactly "voluntary" but may (or may not) be done under the arcane sets of regulations of the IRC (after all it's part of the income tax system) and that it is typically done by referendum in the particular entity and then by positions not specifically employees. While it may be "irrevocable" the irrevocability is not so ironclad as you suppose (another off-topic red herring) but IAE does not offer universal exclusion to the entity in paying the ER's 7.65% for all employees but only those specific ones covered by the agreement which can be and often is highly selectibve.

I've never seen any numbers on the subject that seemed trustworthy and I doubt there are any. The fact, remains, however that many of the federal and state (and local) government employees that I know have the same withholding that you and I do WRT these entitlements. (Let me amend that by saying I don't know about you, but I pay them.)

As for the constituitionality or not of the FairTax, I rather doubt that it is unconstitutional but I'm certainly willing to let the SCOTUS fight that out - and surely you aren't a good source for that type of information as we've seen.

At any rate, not all employees of all governmental entities escape the 7.65% ER expense and it will represent a good bit more than chopped liver and the 29.87% figure you misleadingly throw out there for God and the whole world is meaningless, too, since that equates to tax-exclusive and we're talking tax inclusive here so it would be nominally 23% (but actually something like 19% as has been repeatedly reported in these threads).

Your last paragraph is something the entities and their employees would have to settle. It is not a FairTax matter but one of employee compensation and the FairTax provides the funds for these entitlements IAE ... or perhaps you're saying that the FairTax can be reduced by these excises if the entities stick it to their employees since they don't now pay the 7.65% and therefore the FairTax portion relating to these employees withholdings can be withheld from transfer to the entitlements - that'd be further savings to the FairTax. Another benefit.