And you miss the point that with the FairTax the effective tax rate on purchases will be less than the effective income tax rate is presently. With that being the case people are even MORE likely to consume (as well as invest) hence the increased economic activity that the economic studies predict.
They have different meanings.
And you miss the point that with the FairTax the effective tax rate on purchases will be less than the effective income tax rate is presently.
The effective rate will be lower, and revenue to government remains the same (revenue neutral) - that makes sense to you?
With that being the case people are even MORE likely to consume (as well as invest) hence the increased economic activity that the economic studies predict.
What you're saying is that the maxim "you get less of what you tax" is false.
Your statement is counter intuitive, which means that human beings are likely to behave differently than what you and the economic studies, predict.
It is likely that the financial services sector of the economy will grow, but it is also likely that other, taxed economic activity will contract. One economic study conducted for a retailers association predicted an overall economic slow down and concomitant unemployment.
Australia's experience with a 10% sales tax was a 37% drop in construction and recession. That result was totally unforeseen, BTW.