It does not raise wages or profits. It raises the amount the amount that is taken home by the workers and owners. A person paid $60,000 before the fairtax, will still have a $60K wage after the fairtax. The difference is, the wage earner takes home the whole $60K under the fairtax and maybe only $45K under the current system. Sounds good, but you need to realize that extra money going to the worker can not also be used reduce the cost of the goods. Therefore, costs of goods stays about the same, and a 30% tax is then added resulting in massive inflation.
Why not? Companies are not longer going to be paying business taxes. The $60,000 you see pretax does not also represent the real cost to employers of an employee because it doesn't include the social security taxes the company pays on the employee's behalf that are in addition to what the employee sees deducted on their paycheck. The employer's "contribution" is currently hidden from the employees because the government didn't want to scare people with what social security is really costing them.
That person that is thinks they are paid $60,000 is really being paid more than that.
The employer no longer has to pay out those social security taxes. They don't have to pay business taxes. Their accounting costs drop dramatically.
What evidence do you have that the savings to businesses don't cover the price reductions?
WRONG!!!!
WRONG!!!!