As for purchasing power, if you happen to be a high wage earner, your take-home will rise MORE than the average (and your purchasing power may INCREASE); if you happen to be a low wage earner, your take-home will rise LESS than average (and your purchasing power may DECREASE); if you happen to live off of something other than wages, you're probably screwed.
In aggregate it should all balance out, but there there will be winners and losers ... something generally hidden by the FairTax crowd.
You see, back in the day when FairTax supporters pretended after-tax prices would remain unchanged, EVERYBODY was a made out to be a winner. In reality even then to maintain prices constant meant take-home wages had to remain stable. ONLY THEN was the purchasing power effect normalized across the population.
The reason the price effect is a big deal is because there is a very different calculus for determining individual purchasing power circumstances depending on whether prices rise or not (with corresponding wage behavior.) The fact that wages and income taxes are non-uniform coupled with with the return of these non-uniform taxes to wage earners alters the distribution of purchasing power. While the aggregate is a net-zero delta, your INDIVIDUAL mileage WILL vary.
I just want people to know that up front.
The point is not - and never has been prices (ythat's a red herring). It is disposable personal income that matters and the FairTax will help most people in this regard.
And there is no "admitting" involved despite your one-sided Chicken Little "analysis" of only part of what happens, And the FairTax supporters have been saying the same thing for a good bit more that seven years.
Prices will decline with the removal of the IT and then rise after wage earners get their sizeable wage boost/prebate and then prices inclusive of taxes will go back up probably to a bit less than they are now with little difference overall. The taxpayer will have a good bit more money to deal with this and far more control over what and when he pays tax, That combination is far preferable to the situation we now have.
As for being higH or low wage-earning, that is not the most meaningful point, but the fact that you can control your own consumption under the FairTax and therefore the timing and amount of tax - unlike at present. Unbridled and greedy consumption would of course lead to paying large amounts of FairTax ... but that's your choice. With the FairTax, there is far more incentive for a person to save and invest that under the present system which actually penalizes you, if anything, for such frugal behavior. Your observations about purchasing power and its change are nonsense and intentionally skewed to try to backstop your claims - which they don't.
Living on non-wage income does not cause one to "get screwed" as you so artfully put it. It is the consumption habits of someone doing that anyone with half a brain would save and invest some of this sort of sort of resource, earn tax free income from it, and see it build dramatically through compounding. Someone living off of non-wage income would do just fine unless he allowed someone like you to convince him that he should go on spending willy-nilly above his means by going deeply into debt with questionable plans like adjustable rate mortgages, etc. and spending like a drunken sailor. There can be ample consumption without that sort of risk exposure to the individual.
There may be some winners and losers as you so fondly like to harp on with your Chicken Little economic analysis but there will be far more winners than losers (and very few of this latter group) simply because the economy will be expanding - and rapidly so.
Your next to last paragraph that starts with "The reason the price effect ..." is merely a bunch of meaningless gobbledebook. It is yet one more of your attempts to scare those who might know no better. If anything it will be a big deal because it will help far and away MOST taxpayers have greater disposable personal income and greatly boost the American economy. The aggregate will NOT be - as you erroneously state - a net zero effect, but will be a rising tide that floats all boats. Any decent dynamic analysis would show this to be true. It sounds as though you've never read "The Broken Window" by Bastiat/Hazlitt and that you know nothing about how an expanding economy help most people that live in it.
If you'd like, I have permission to post that entire chapter from Hazlitt's book for you to study.
No! Why do you continue to ask the same falsely-premised question? Are you not reading my post?
I said purchasing power will remain constant - real prices will remain constant.
IF prices rise (note here that I said IF), then there will be a corresponding increase in wages/ROI. Again, this doesn't mean prices will rise. They may rise or they may fall. It may vary across industry. Again, I'm not saying prices will rise, I'm saying purchasing power will remain constant. Get it?
Now, for purchasing power to remain constant we don't need to have price increases. We may. But we don't have to. Prices are as likely to fall.
Wages aren't the only place one may see an increase in purchasing power to offset any possible price increase. As one example, my pretax investments will gain.
Of course there will be winners and losers. If you're looking for a system without losers, you're looking for something that doesn't exist.
Do you think there are any winners or losers in our current system?
It is trivally obvious that each person's "mileage will vary". Sun rises in east too. Did you think people need to know that up front?