Sorry, the correct number is 6.2% Social Security and 1.45% Medicare that are NOT part of your gross salary. THis is the employee match. There is an identical amount that is deducted from your gross. But you know what if I only take home 60% of my salary (lets say its 50,000) or 30,000... and someone comes along and says well drop your salay to 40,000$ but youll take home 35,000$ am I the worker really suffering?
I guess it depends what happens to the prices of goods, and the amount of taxes that you are charged on them, when your income makes that transition. If your take-home went from $30,000 to $35,000 and prices+taxes are 20% higher, then you've lost. If prices+taxes went up only 10% or stayed the same, then you've won.
But your hypothetical is not what the calculations are based on. In your example, your salary will drop to the $30,000 you are taking home now. I am not saying they have any way to make that salary reduction happen, but they planned on it happening to make the FairTax promise of "retail prices staying about the same" possible.
I guess it depends what happens to the prices of goods, and the amount of taxes that you are charged on them
Indicating that the purchasing power of my dollar can go down because of NSRT but later you say
The purchasing power of a dollar in the bank cannot change on the day the FairTax is introduced unless you plan to also introduce NewDollars at some exchange rate to "Old" Dollars.
so which is it?
Assuming that the price to produce goods drop because the salary you must pay employees drops (from 50,000 to 35,000) in my example. An tax of 20% on goods *after that cost reduction is in place* Im still going to come out slightly ahead.