[groanup]

It works like this:

Purchase of an item for 100 dollars.

Under current tax law you have to earn 133.33 dollars in a 25% bracket to have $100 left over.

Under the proposed HR. 25 you have to earn $130 to make the same purchase. (100 x 1.3).

So already you are ahead.

Then adjust for price decreases of between 10 and 20 per cent, low compliance expense, the prebate and suddenly one is very much ahead of where he was under the IT.

And please notice that the supply and demand of money hasn't changed much at all. So despite what some FairTax deniers say we won't have instant inflation.

[lewislynn]

Under current tax law you have to earn 133.33 dollars in a 25% bracket to have $100 left over.

Really? Do you pay taxes on your gross income?

[Toddsterpatriot]

So already you are ahead.

So if you're paying 25% or more, you're ahead, 23% or less and you're behind.

Then adjust for price decreases of between 10 and 20 per cent, low compliance expense, the prebate and suddenly one is very much ahead of where he was under the IT.

If I'm ahead, who loses?

And please notice that the supply and demand of money hasn't changed much at all. So despite what some FairTax deniers say we won't have instant inflation.

You are correct, the money supply hasn't increased, so we won't have inflation, we'll just have higher prices.

I guess the people on fixed incomes or people spending savings will just have to bite it.