No, that's untrue.
First, the NRST (National Retail Sales Tax under the FairTax legislation) can be financed as part of the mortgage. The increase in monthly payments is more than offset by the elimination of income taxes from a homebuyer's paycheck.
Second, the NRST is applied only to new homes and those new homes will be built with materials that cost less because the manufacturers will no longer need to pass on federal taxes into the cost structure. So new homes will cost less but the price will be brought back up by adding the NRST.
The key point to keep in mind is the FairTax is a replacement tax, not a tax on a tax. It replaces all the federal taxes that are embedded in pricing now. The embedded taxes are hidden. But they will be eliminated and then replaced by the visible FairTax.
So, the Fair Tax is going to pass on tax savings to the employee and increase his take-home pay.
"and those new homes will be built with materials that cost less because the manufacturers will no longer need to pass on federal taxes into the cost structure"
And you're also going to use the tax savings to reduce the price of the house? Nice try.
It's true that the builder of the home no longer forwards payroll deduction or employee FICA to the federal government -- he can use that money to A) lower the price of his product or B) give it to the employee.
Not both.
Which means the home buyer would have more to finance, more interest to pay, and with 30% added to the cost of loan service, more tax to pay.
Second, the NRST is applied only to new homes and those new homes will be built with materials that cost less because the manufacturers will no longer need to pass on federal taxes into the cost structure.
So every US worker who is involved in the production of building materials will not get a 100% of his paycheck?
How much of our building supplies are imported?
The key point to keep in mind is the FairTax is a replacement tax, not a tax on a tax. It replaces all the federal taxes that are embedded in pricing now. The embedded taxes are hidden. But they will be eliminated and then replaced by the visible FairTax.
Are you having trouble with sentence structure again?
The FairTax does not replace all "embedded" taxes.
Oh, wait, my bad - certain "hidden" taxes like the federal gas tax are "very visible". Which reminds me, how much did your wife pay in the very visible federal gas tax last year?
The FairTax on the federal gas tax would add about 5.5 cents per gallon.