You want some back up? Sure, here it is, printed in Money magazine and quoting the FairTax expert who did the study, Harvard economist Dr. Dale Jorgenson. This is a point I made for 7 years before the fairtaxers were forced to admit it. Excerpt below:
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We'll explain this bit about "embedded taxes" in a moment. But first, let's consider what Boortz and Linder appear to be saying. Prices at the store are the same. Your boss stops taking all that money out of your paycheck. Uncle Sam is sending you money instead. And, oh yeah, the government is still up and running.
This just can't happen. "It is practically and logically impossible for the government be collecting the same amount of money as before and have everyone suddenly be better off," says Daniel Shaviro, a tax law professor at New York University.
Part of the problem is the way Boortz and Linder are using the idea of embedded taxes. In an eight-year-old study paid for by AFFT, Harvard economist Dale Jorgenson noted that because the taxes paid by everyone in the chain of production are embedded in the cost of goods, prices could decline an average of 20 percent if all those taxes were scrapped. The FairTax Book devotes an entire chapter to this idea.
What The FairTax Book fails to mention is that prices can only fall this sharply if companies cut wages. I asked Jorgenson about this, and he agreed. Say your salary is $100,000 a year today, but you take home $80,000 after taxes.
Your company is still paying that extra $20,000. In a FairTax world, it will save that money, and be able to lower its prices accordingly, only if it can reduce your salary to $80,000. In other words, your take-home pay is the same as before. Sure, you'd get to "keep 100 percent of your paycheck," as Boortz and Linder repeatedly write, but it would be a smaller paycheck. That's kind of a big thing to leave out.
Lets see. I make $100,000 today but my take home pay is $80,000. Tomorrow the FairTax is implemented and my take home pay is $80,000.
The difference is and I am worse off how?
Here is an experiment for you to do. Go ask 50 people "how much do you earn?"
Better than 95% will respond "I take home $X" or some close variant of that.
I did mortgages for 10 years. One of the hardest questions to get answered accurately was "gross monthly income". Hardly anyone knew.
But they could all tell me exactly how much their take home pay was.
Read it again -- that is assuming you read it once -- it doesn't say wht you are alleging.