Replies

"If you think the rent is inflated due to the landlord paying the income tax why don't you think it will be inflated due to the landlord paying the FairTax on his personal purchases?"

Oh brother. Another novel economic theory. Is there no end to the leaps of logic you will take to disparage the FairTax?

Oh brother. Another novel economic theory. Is there no end to the leaps of logic you will take to disparage the FairTax?

It's not novel at all, it called "real income." You should find it discussed in any Econ 101 text book. You really need to pick one up. It would tell you that real income is "income measured in terms of the goods and services it can buy."

Under the income tax, if I was a landlord and I was making $100,000 nominal income off of my properties, I would pay $25,000 in income taxes and buy $75,000 worth of goods and services. My real income is $75,000.

Under a 25% (inclusive) NRST, I would make $100,000 nominal income and buy $75,000 worth of goods & services and pay $25,000 in sales tax. My real income is $75,000.

You seem to think the landlord can drop his rent prices by the amount of income tax he was paying without reducing his real income. If he did this his nominal income would be $75,000 and this would allow him to buy $56,250 worth of goods and services and pay $18,750 in taxes. His real income has been reduced to $56,250.

You idea would work only if everyone was willing to take a 25% reduction in their nominal wages & income. Which would be very difficult to do. This is what I've been trying to explain for months and y'all can't seem to get it in your head. Y'all seem to think the FairTax is some sort of economic alchemy.

"If you think the rent is inflated due to the landlord paying the income tax why don't you think it will be inflated due to the landlord paying the FairTax on his personal purchases?"

Oh brother. Another novel economic theory. Is there no end to the leaps of logic you will take to disparage the FairTax?

Assuming 100% rent income:

Rent before sales tax...$1000

$1000 minus 25%Income tax = $750 disposable (after tax) income

Playing your silly price game.

Rent after sales tax $1000 minus 25% (previous income tax) $750.00 (pre-tax gross income)

$750.00 plus new sales tax = $974.00

Remit 23% ($224.00) federal tax = $750.00

$750.00 minus 23% tax when spent = $577.50 disposable (after tax) income

Income tax = $750.00 after tax income

Fairtax = $577.50 after tax income.
A 23% ( no surprise) loss of after tax income.

Oh BTW, the total sales tax collected from $974.00 rent would be $396.50 OR 41% tax.