[Man50D]

The first such myth is that the rate would need to be set at 23% in order to raise enough money to run the federal government. Not so fast. Under the proposal if you buy a $100 item the tax would be $30. Most of us would describe that as a 30% tax. But proponents would have us believe that the tax rate should be calculated by dividing the tax amount by the total purchase price including the tax. So divide $30 by $130 by and you get 23%. That is truly fuzzy math at its finest.

This article loses all credibility with this statement. Fair Tax opposer's are deliberately leaving out one very important fact. The Fair Tax ill eliminate the hidden/embedded 23% Corporate income taxes and associated compliance costs known as the inclusive rate. The $100 item will then cost $77 and the $23(100*.23) will be the tax rate applied externally to the $77 as the tax exclusive rate of 30%. Consequently the price will remain at $100.

This is the same old tired, disingenuous argument that has been used for a long time but people who actually read about the Fair Tax know better. More information can be found at The Americans For Fair Taxation website. Fair Tax ping!

[Man50D]

A few more to ping. Fair tax ping!

[xcamel]

Leaving out what has been disproved, and discredited many times now, increases the authors credibility, not decreases it.

[wolfcreek]

Yeah, the article did leave out that *little* fact.

Isn’t there a *Fair Tax for Dummies* book coming out soon?

[steve8714]

The $100.00 item will only cost $77 if the seller is a fool. Since most Americans don’t know what proportion of the retail purchase price of what they buy is, you won’t know what the specific embedded tax is. When you buy a snow cone from the seasonal booth, do you think his burden is the same as a big corporation with expensive tax attorneys?
A more equitable change would be to eliminate the tax on dividends and interest and institute a two tier “flatter” tax with a large exclusion and no deductions.

[Michael Knight]

Yeh, its totally unfair that the illegal aliens would have to pay the retail tax too. ha ha.

First, the fair tax book explains the percentage both ways. We are arguing over the same exact amount of money, so what is the difference. Secondly, if the embedded taxes are removed, the 100 dollar item will now cost 75 or whatever, then you’ll put that right back as a tax. Who do you think is paying the corporate payroll taxes now? I can promise you the stockholders arnt doing it out of the goodness of their hearts. its embedded in the budgeting for wages (making you get paid less) and in the price of the item.

Imports would pay the same tax rate as any other retail item. If their country has a bunch of taxes on their end, the import will be more expensive then an American made item. Thats my #1 reason for favoring this plan is it will give the US an edge in manufacturing to the biggest consumer, us.

[raybbr]

This article loses all credibility with this statement. Fair Tax opposer's are deliberately leaving out one very important fact. The Fair Tax ill eliminate the hidden/embedded 23% Corporate income taxes and associated compliance costs known as the inclusive rate. The $100 item will then cost $77 and the $23(100*.23) will be the tax rate applied externally to the $77 as the tax exclusive rate of 30%. Consequently the price will remain at $100.

Don't fair-taxers leave out the fact that everything a corporation buys would be taxed at the mythical 23%? Wouldn't that cost be embedded in the price of everything all over again?

[Bryan24]

You wrote “This article loses all credibility with this statement. Fair Tax opposer’s are deliberately leaving out one very important fact. The Fair Tax ill eliminate the hidden/embedded 23% Corporate income taxes and associated compliance costs known as the inclusive rate. The $100 item will then cost $77 and the $23(100*.23) will be the tax rate applied externally to the $77 as the tax exclusive rate of 30%. Consequently the price will remain at $100.”

That is why I am opposed to this plan, the outright DECEPTION that is being employed.

“Consequently the price will remain at $100.” That is BALDERDASH.

For every dollar I get back from Income Tax Witholding, FICA witholdings AND the the money I save on reduced cost of products due to corporate taxes coming out, I MUST PAY THE SAME AMOUNT IN SALES TAXES BECAUSE BY DEFINITION, THIS IS REVENUE NEUTRAL!!!

Stop the deception.

[OKSooner]

"Elaine Mejia is the Director of the N.C. Budget and Tax Center"

[Proud2BeRight]

“This article loses all credibility with this statement. Fair Tax opposer’s are deliberately leaving out one very important fact. The Fair Tax ill eliminate the hidden/embedded 23% Corporate income taxes and associated compliance costs known as the inclusive rate. The $100 item will then cost $77 and the $23(100*.23) will be the tax rate applied externally to the $77 as the tax exclusive rate of 30%. Consequently the price will remain at $100.”

I have heard that a couple times now and I don’t get it. Those numbers imply that the individual will be able to stop paying income taxes and prices will remain the same. Knowing that the majority of government receipts now come from individuals, how can shifting that burden to a sales tax yield a zero price impact? I will grant you that the smaller corporate tax burden elimination could somewhat soften the 30% sales tax with “possible” price reductions from profitable providers of goods and services but that’s minor.

[lewislynn]

The $100 item will then cost $77 and the $23(100*.23) will be the tax rate applied externally to the $77 as the tax exclusive rate of 30%. Consequently the price will remain at $100.

If the Fairtax replaces both the 23% embedded taxes AND my personal income AND my payroll taxes AND sends me a government check every month, how is 23% OF reduced prices revenue neutral?

Which is the lie?

[OKSooner]

"Elaine Mejia is the Director of the N.C. Budget and Tax Center"