Oops! Bartlett forgot to mention that the embedded income tax costs in the items he mentioned will be gone.
That dramatically changes the economic model.
The fact that he would gloss over this CRITICAL fact demonstrates that his analysis is flawed poop.
That is exactly right. People don’t realize the amount of invisible tax they pay in increased costs.
Gone where? Into price reductions or into the pockets of the workers and the business owners? I really don't see employees lining up to take pay cuts so that it may be passed to the consumer. Prices increase under the fair tax, period.
True. But I see nothing in the legislation that forces companies to reduce their prices by all or even some of that amount.
The Fair Tax is supposedly revenue neutral at 23%. Is revenue neutrality based on 23% of existing GDP or 23% of GDP minus a 30% reduction in price?
For example, my state currently collects 6% in state sales tax. On a $1 item at retail, the state gets 6 cents. But if that $1 item at retail drops to 70 cents, my state only collects 4.2 cents. My state sales tax will have to increase to about 9% to collect the same revenue.
So, is the 23% based on a retail price of $1 or 70 cents?