Are land prices going to drop 25%? -- I don't think so.
The actual construction is highly labor-intensive, so how is that cost going to drop if everyone gets their old gross pay? Don't tell me the average home-builder has legions of tax lawyers on his payroll whom he can fire!
The price of a house will drop for the following reasons:
1. The embedded cost of entity level taxation will be removed from the building materials.
2. Land is exempt from the FairTax. It's considered a used good.
3. The employer portion of FICA and Medicare will no longer be extracted from the general contractor, representing a 7.65% reduction in the cost of labor.
"I guess we do. Please explain how pre-tax housing prices will drop 25%.
Are land prices going to drop 25%? -- I don't think so.
The actual construction is highly labor-intensive, so how is that cost going to drop if everyone gets their old gross pay? Don't tell me the average home-builder has legions of tax lawyers on his payroll whom he can fire!"
The amount of imbedded tax cost is highly dependent on the numebr of levels in the supply chain; therefore, the number ot times corporate income taxes get passed up through the supply chain. Houses (and cars) and other big ticket items have more levels in the supply chain than simpler products.
Land only accounts for about 20% of a typical home's cost.