[Always Right]

Dale Jorgenson, former Harvard University economics department chairman, projected an average product price reduction of 20 percent to 30 percent in the first year after adoption of the FairTax.

What a nutty claim. Taking out the same amount of tax will not have a dramatic impact on prices. I hate the over the top phoney claims the Fair Tax people have been making for years. Their analysis makes global warming scientist look honest.

[nsmart]

Without an income tax, the USA will become a tax haven for the richest of the rich.. imagine the growth in the economy.

[Principled]

What is nutty?

[groanup]

I hate the over the top phoney claims the Fair Tax people have been making for years.

So what is your analysis?

[Principled]

Did you know that hidden income taxes and the cost of complying with them currently make up 20 percent or more percent of all retail prices? It's true. According to Dr. Dale Jorgenson of Harvard University, hidden income taxes are passed on to the consumer in the form of higher prices - from an average 22 percent on goods to an average 25 percent on services - for everything you buy. If competition does not allow prices to rise, corporations lower labor costs, again hurting those who can least afford to lose their jobs. Finally, if prices are as high as competition allows and labor costs are as low as practical, profits/dividends to shareholders are driven down, thereby hurting retirement savings for moms-and-pops and pension funds invested in Corporate America.

With the FairTax, the sham of corporate taxation ends, competition drives prices down, more people in America have jobs, and retirement/pension funds see improved performance.

[ancient_geezer]

Taking out the same amount of tax will not have a dramatic impact on prices.

Removing the tax system collecting those income and payroll taxes from the backs of business removes the overhead costs associated with those businesses as well. That provides substantial potential for cost savings and reduction of prices out of competition for the consumer/investor's dollar.

I hate the over the top phoney claims the Fair Tax people have been making for years. Their analysis makes global warming scientist look honest.

Strange I could make a rather similar statement about those that deliberately obscure how the NRST actually impacts business overhead costs by reducing them not only by the amount of tax but the overhead associated with tax avoidence & planning, accounting and reporting, as well as the costs that government imposes on a business in audits, litigation & legal fees when the business person's crystal ball is as cloudy as the IRS and the IRS chooses to make an example of them, not to mention the fines, and penalties assessed when the IRS' tax court takes its final cut out of the hide of the hapless victim.

And that does not even begin to account for the loss of sales revenue from lowered demand for products due to higher pricing required as a consequence of the the above.

[cdtracing]

First of all corporations don't pay income tax. It is past along to the consumer in tie price of the goods or service provided. So when the business no longer have to pay the income tax the cost of doing business goes down.

The argument now is, "Now the greedy corporations will want to keep all that profit". What you are not considering is the "free market". Other people who also provide the same goods/service will lower their price to gain market share, in effect, a price war. Hence lower prices to the consumer.

It's free market economics pure and simple. Market competition creates lower costs for the consumer.

Chris

[lewislynn]

Their analysis makes global warming scientist look honest.

LOL!..so true.

[CSM]

Is your statement that we will not see the degree of price reductions claimed? Or is it that prices will not decrease at all?

[Big Red Clay]

One thing I have noticed when people discuss the Fair Tax is that they forget about their paycheck. People are so conditioned by the government to think only about their take home pay (ie the money that the government lets you keep after confiscating their cut)that they forget about the sizable raise that they would get by ELIMINATING INCOME AND PAYROLL TAXES!! It seems the argument here is whether prices would go down due to the pressure of competition. It seems to make sense that they would. Take away the burden of corporate tax and compliance costs and this makes sense. One guy is going to lower his prices to go after a bigger share of the market and all of his competitors will be forced to follow suit or go out of business. The 20-30% anticipated drop in prices will be countered by the 23% NRST paid on new goods. Therefore prices will likely stay the same. Nothing wrong with this being a wash in my book and here's why. The part that everyone seems to forget is that on the day income tax and FICA stop taking their cut, you get a 20-40% raise. That is the beauty of this thing. You get a big raise and prices stay the same. Not to mention the fact that WE make the decision on how much tax we pay, not the government. I can remember thinking "man, I sure wish I could keep all of the money I make every two weeks" when looking at my paycheck. That is what the Fair Tax will do. Granted, the state will still get their cut (if you live in a state with state income tax) but the rest of that money is yours to do with what you want. It's your decision, not Washington's.