Under the FairTax our worker pays net $6,176 in federal tax whereas under the Income/Payroll tax system he pays:I missed the part where you included them, or did they "woosh past your attention span" too?SS/MC Payroll tax of 7.65% of gross $45,810 =~ $3,504 Income tax FICA 15.35% of Taxable $37,060 =~ $5,689
for a total of $9,193. .....
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I guess estimates by leading economists above this neaderthals' paygrade of federal embedded taxes of between 22% to 23% just wooshed past his attention span.
Using your calculations your example worker under the income tax paid $9,193 then went on to spend the $37,060 balance, 23% of which is (by your words) federal embedded taxes...meaning your example worker, by your own logic, paid $17,717 in federal taxes. Yet your after Fairtax worker only paid $6,176 and nothing for replacement of the embedded taxes...How convenient for you.
Maybe you could illustrate for the rest of us how your scenario is revenue neutral when you choose to only selectively acknowledge the embedded taxes. Or did they just "woosh past your attention span"?
Yet your after Fairtax worker only paid $6,176 and nothing for replacement of the embedded taxes...
Let's see....in the example you responded to the amount of FairTax paid in was $8,523.80 before the Rebate of $2,384.
The $8,523 paid on NRST replaced 100-101% of the federal embedded taxes on retail products and services purchased. So your claim that there was no replacement of federal embedded taxes is shall we say one of your many interesting hallucinations that you frequently share on FairTax threads?
As for your request for me to illustrate revenue neutrality, that is easy to do on a macro scale as well as with super-micro anecdotes.
But before doing I will request you to explain how it is that you have been bashing the FairTax for years yet you haven't bothered to read the published peer-reviewed economic foundational papers that explain what you are requesting? It is impossible that anyone that spends as much time as you on this subject would never have seen the underlying determinations.
The FairTax is applied to a much broader base in the consumption component of GDP. Looking at past revenue receipts for federal government allows an easy calculation of about 23% on consumption to ensure revenue neutrality. That's the macro view.
The micro view is easily seen by recognizing that a huge portion of the consuming population does not pay or pays very little income and payroll tax.
For example, a retired grandmother living with only a social security check will pay practically zero federal tax on a monthly check of about $970. She will spend practically all of that on rent and consummables. She pays nothing in the form of income tax or payroll tax. But she is paying federal embedded taxes of 22-23% on all consummables. So she is in the consumption base but not in the income/payroll tax base.
Expanding the example to a broader view, the bottom half of all taxpayers pay a small percentage of income taxes, yet they are in the consumption base paying federal embedded taxes of 22-23% in the form of higher prices caused by a multistage income and payroll tax policy and associated compliance costs.
Shifting a revenue system to a broader base is a tactic often employed by big business in America. It allows for lower prices due to larger volume. Such tactical shifts are not mysteries, they are real and are often taken advantage of.
The FairTax is a shift of taxation away from the production chain towards the retail end of the chain. It eliminates all the tax siphoning along the chain from raw materials to distributiors, wholesalers, transport, marketers, retailers and shunts all the taxes to the retail end as one tax as a replacement.
The amount of federal embedded taxes provided by that part of the base that pays next to nothing into the existing chain, the 'non-payers' (e.g. grandmother example above) is mostly accumulated to existing retail businesses but will be collected by these retailers for the federal government under the FairTax. However, as is well known to those who study these issues seriously, these retail businesses and all their affiliate businesses upstream in the supply chain will experience a windfall under the FairTax that will offset nearly all of the non-payer federal embedded tax recoup that will be diverted to the federal government.
In a nutshell, federal government will take a portion of grandma's consumption away from present retailers and gives back to retailers a 100% cut on income/payroll/profit taxes. That's the trade. In addition, grandma will get a rebate so that she effectively pays zero federal tax. That's because we do not want the historical 'disproportionate burden' argument that every good communist student of political science knows to repeat, we do not want that argument to cause class warfare as it did throughout the 19th and 20th centuries.