IMHO this will kill most new big ticket item sales, who is going to 'use' these items so they can be sold w/o a 23-30% tax added to the price?
If, as a business owner or farmer, you buy something for strictly business purposes (not for personal consumption), you pay no consumption tax.
A Huge loophole. Everyone will open a 'business'.
I am all for a new form of taxation but question this one.
ps.. What about home sales?
Tack on 23-30% and amortize it for 30 yrs? Not a chance.
Another industry killed.
You need to do some research on the points before you bring them up to attack. Every one of those have been covered in depth on these threads before.
Most people unfamiliar with the FairTax automatically assume that the intended tax is applied in addition to existing prices. That's not the case at all as shown in overview form by:
http://www.fairtax.org/pdfs/Removing_Americas_Eco.pdf
A good starting place on home ownership would be:
http://www.fairtax.org/pdfs/FairTax_and_Mortgage.pdf
It seems that you are assuming house prices will stay at pressent levels when instead they will decrease as will interest rates. Check it out.
Business ownership is no more of a "loophole" than at present and, in fact, is undoubtedly less so since the present tax system has analogous loopholes that are even easier to use for evasion - and the marginal rate returns under present tax laws are even greater (with lowered chance of detection due to sheer return volume if nothing else) than the FairTax rate. Payroll taxes alone account for a rate of over 15% and a business choosing to break the law under the FairTax is undoubtedly doiing so now. In fact, the IRS says current noncompliance/evasion is something like 20 - 25% of tax revenues. It seems doubtful the FairTax non-compliance would be that great since retail sales are easer to monitor that all of the permutations of the income tax law and since the points to monitor are many, many fewer that the millions and millons as at present - and the possibility of detection is much greater under the FairTax. That alone will deter many tempted to so indulge..
Even more detailed answers can be found here:
http://www.fairtaxvolunteer.org/smart/faq.html
The FairTax bill itself is very informative and worth reading and it is available as "hr25" here:
http://thomas.loc.gov
First, prices will not increase by the amount of the sales tax. Existing taxes and tax costs amount to some or all of the sales tax premium, depending on who you ask. The general consensus is prices remain about the same, even with the nrst added. There won't be any bigger a difference in new vs used under the nrst. Why would there be? If I'm selling a used home, I am dang sure going to recover ALL of my costs of purchase - including either an nrst or hidden taxes we have now. House prices currently contain the taxes and tax costs of EVERY stage of production - just like house prices contain the cost of EVERYthing in the chain of production.
"Business taxes", are actually hidden taxes to individual consumers in prices, lower wages to individual workers, or reduced ROI to individual investors. ONe thing is sure - it sure isn't a tax on business - it's a tax on individuals.
When "business taxes" are eliminated, prices fall at each stage in an attempt to maximize profits (maximum price does not mean maximum profit in a competitive industry). Then when the retailer buys his stuff to sell to us, it's 20-25% cheaper. Add the nrst and we're back to today's prices.
But, we won't have any withholding or any income tax to pay.
THe size of the tax base is much, much larger under a consumption tax.
This benefits US exports - which will leave our shores costing approx 25% less. ANd imports will have to pay the nrst...all allowing US companies to reduce the advantage that China, etc currently enjoy.
And if you think you can defraud the gov't by opening a false business - good luck. But it will be easier to get caught than now... a lot easier. How wise would it be to fake a home office and take deductions for everything you buy now? Sure, you could try it. Some always will.
What if enforcement were focused more than now? Say the number of tax collection points will reduce by 90%. That leaves enough enoforcement to minimize cheating. Besides, why would you cheat if it's fair and you have some control over your tax decisions?
Home prices don't rise. INdeed, the more stages in production, the more tax and tax costs are currently hidden in prices. So it is reasonable to think home prices may even decline....after tax.
Interest rates will drop to the tax free level (a 25% decrease) making it easier to qualify for a loan. Taxes and tax costs are included in everyone's sales price and mortgage now, and plenty of folks are buying homes. You seem to think that there is currently NO federal tax or tax costs paid at purchase. That's wrong.
ANother thing making it easier to buy homes is that you'll get your whole paycheck free of any federal deductions. Youll have more money available to save (remember prices don't rise). And the money you save grows tax free.
You're premature on thinking this will kill any industry. It'll be great for every industry in the US. Which is why companies will relocate here after we go nrst. Plants, HQ, you name it. Profits aren't taxed in the US under an NRST.
Take a quick look-see.