Under Income & Payroll Tax
Under FairTax
Increase in prices: $131K / $600K = 21.8%
Purchasing Power delta: (288/216)/(1.2) = 1.1
Note, purchasing power for this individual rose 10% because he was an extraordinarily high income earner (> 96% of all earners.) He may (or may not) choose to lower prices more depending on his competitive pressures and business needs.
Interestingly enough, if this businessman DOES lower his prices further, he is eroding the value of the tax base needed to raise the required revenue: prices lowered by MORE than the saved tax cost = smaller FairTax base = less FairTax collected => Higher rate = higher prices. Either way, the customer is going to pay the 20% price increase.
If this businessman was of more modest means, his prices would still increase about 20%, but his take-home would have not risen as much:
Under Income & Payroll Tax
Under FairTax
Increase in prices: $73K / $381K = 19%
Purchasing Power delta: (73/63)/(1.2) = 0.97
To break even, this businessman would have to increase prices further (another $3K). That would bring his price increase to 20%.
You have incorrectly assumed too much non-wage price reduction, 100% compliance with "net-zero-purchasing-power-delta" target by highly profitable businessman (read that "businessmen in noncompetitive markets") and ignored the net purchasing power decrease of highly competitive (low profit) businessmen.
Yet another example of how anecdotal analysis does not tell the whole story.
Of course anecdotal analysis is weak, but enough of it gives an empirical weight rather than just theoretical assumptions. I wish each person that looks at the FairTax would run their own real-life numbers rather than buying into just logical arguments. I did ask lewislynn for specific numbers and he told me to go ahead without them.
But you didn't read lewislynn's claim that my example was refuting. He did not claim that he should get to keep his PIT and Employee-side payroll taxes [(EE/owner gets to keep PIT and EE FICA ... that's what the FairTax book told him anyway)]
He claimed he would need to increase his prices by 30% to maintain HIS PURCHASING POWER.
I allowed for a 10% price drop and you allowed for 8.6%, but I allowed lewislynn a full 20% increase in take-home, not the 18.7% that an 8.6% price drop affords. So using your 8.6% figure and 18.7% increase in take-home spendable income:
Under FairTax