Dear Sprite518,
You appear to be misreading the conversation between RobFromGa and Dr. Jorgenson. Here's the critical exchange:
RobFromGa asks:
"Excuse me for my lack of understanding of your answer, when you say 'workers would keep that after-tax pay' are you saying that if they are making $1000 a week now, and paying $200 payroll+income taxes now, that under the FairTax you were assuming that workers would get paid $800 and keep all of that? Or are you saying that you meant they would make $1000 under the FairTax?"
Dr. Jorgenson replies:
"I am saying that the worker would continue to receive the after-tax amount of $800."
Dr. Jorgenson is assuming that the gross pay of $1,000, pre-tax in the current system, will be reduced to a gross pay of $800 under the NSRT, but without any payroll or income taxes, the new gross pay will be equal to the old (AND new) net pay of $800.
The $200 of gross pay that the worker lost under the old system is still lost to him, but is used by the business, under Dr. Jorgenson's model, to reduce general price levels.
No free lunch.
sitetest