23% is currently buried in the cost of the item..so removing it, and replacing it with the fair tax would result in the same $100, only the receipt would showI'm honestly not dogging you but some of you are so mislead by "the book" it's unbelievable.“purchase $77”
Tax $23Total $100
First of all the Fairtax replaces ALL federal income taxes and your payroll taxes.
Maybe you could explain how the 23% rate will replace the 23% embedded taxes AND your personal income tax AND your personal payroll tax And send you a government check every month ON REDUCED PRICES?
I'll try to give it a shot....
Right now, income tax is just that - tax calculated and charged based on income. This includes your paycheck, capital gains and investment income, and business receipts, among other things. Now those businesses that get a tax bill based on their sales don't just shovel the money out of their profits; they incorporate that expense into the wholesale cost of producing the product.
Therefore by eliminating that additional 'cost' to manufacture, the item has a lower cost of production leading to a lower wholesale price, leading to a lower retail price. This lower price is then offset by the FT 'sales' tax, resulting in a net zero sum change.
Theoretically, this results in a tax that is applied directly to the country's GNP and collected at the point of sale to the end consumer when dollars are spent. Conversely, what we have now is a taxation system that is disconnected from the GNP and instead taxes dollars as they are earned at a rate determined by how much the government wants to spend over the next year.
So much for the simplicity and transparency of the FairTax scheme.
Ho Hum -—— Read the book.