"So, DPI increases, prices fall and government revenues stay the same? And I get a prebate. Still sounds like a free lunch."
No it's not a lunch and it's not free - it's merely simple economics. Read the paragraph in #227 that starts "The answer to both points is yes ..." very slowly a few times and reflect upon what it says. It's something a lot of people miss.
Okay.
The answer to both points is yes (but it's really not your income that increases but your DPI - disposable personal income or purchasing power). At the 23% tax inclusive rate presently in HR25, the FairTax is revenue neutral as several different economic studies have shown. Keep in mind that the FairTax base of consumption is much greater than the income (wage) base. Roughly the same percentage rate in each (both are expressed in tax inclusive rates) yields more revenue under the FairTax than under the income tax due to the greater base.
So, revenue neutral means the government gets the same money. "DPI increases" means I have more money in my pocket.
I also showed that your purchasing power will increase under the FairTax meaning that you can buy more "stuff" with the same amount of money.
Great, this must mean prices will drop. Is there anything the FairTax can't do?
I'm telling you, this is perpetual motion. Sign me up!!