As I understand the Fair Tax Bill employers will no longer "deduct "my" taxes for me.....so instead of receiving $70.00 out of a $100.00 paycheck I will receive $100.00.
So....before, the most i had to spend was $70.00 for that week
Now I have a hundred....the item I bought last week for $70.00 left me $0.00.....
This week i have a $100.00 in my pocket to spend......I go and buy the same $70.00 item PLUS 23% NRST and I spend....$86.10 w/tax.....or $90.91 w/tax if it is an inclusive tax (a little confused on how the tax is figured) (as a sidde note: if i go out and buy an upgraded item on credit for 100.00 plus NRST i am an idiot...but that's another discussion.....there is a learning curve involved under the NRST......)
Either way i have $9.09 - $13.90 left over in my pocket....which i can go spend on something else...."living paycheck to paycheck here....LOL"
Regardless....i am better off....i have more money to save....spend....burn....whatever.....and this does not take into accout..... POSSIBLE LOWER RETAIL PRICES!!!!!
Your example is not real. The fair tax replaces the exact same amount of tax under the income tax system. In theory, everything should come out equal, as all you are doing is changing the method at which taxes are collected. Where your example is flawed is most people may have a marginal rate at 30% or more, however the overall tax rate is much less. Half of the population pay an effective federal tax rate of 4% or less.