[Chilldoubt]

http://ray.met.fsu.edu/cgi-bin/amortize

on 150k at 8% 30 yrs there's 83532 in interest. does that mean that the consumer would have to come up with 83532*1.2987= 104843 then minus 83532 = 24951 extra? that's an extra 69 per month.

[ancient_geezer]

on 150k at 8% 30 yrs there's 83532 in interest. does that mean that the consumer would have to come up with 83532*1.2987= 104843 then minus 83532 = 24951 extra? that's an extra 69 per month.

You would need to subtract amount attributed to the basic(i.e. federal rate) as defined in the legislation to calculate the portion actually taxed.

Three things to consider, basic interest is not taxed, interest rates would be somewhat lower(roughly 75% of rates at time of implimentation), principal paid on the house is taxed and what is defined to be implicit fees for financial intermediation services (fees added on as a proportion of interest) Essentially FIS is the difference between the amount paid over the basic rate as defined by the legislation.

 

H.R.25

Fair Tax Act of 2003 (Introduced in House)
http://thomas.loc.gov/cgi-bin/query/z?c108:H.R.25:

---

 

`CHAPTER 8--FINANCIAL INTERMEDIATION SERVICES

`Sec. 801. Determination of financial intermediation services amount.

`Sec. 802. Bad debts.

`Sec. 803. Timing of tax on financial intermediation services.

`Sec. 804. Financing leases.

`Sec. 805. Basic interest rate.

`Sec. 806. Foreign financial intermediation services.