Of the $135 Billion in compliance costs outlined in the study, $85 Billion is attributed to costs (time and expense) borne by individuals. Only 60% of that ($51 Billion) is borne by proprieterships. The rest, $34 Billion, borne by individual, non-business income tax payers does not help reduce retail prices.
While the elimination of these costs is a good thing for those individuals, only a small portion of it saves the indivuduals any money (the rest is just time ... whether the individual uses the freed time to watch tv, or work is open to debate.)
Another $10 Billion of the $135 Billion is the IRS budget. Elimination of this expense, while helping to reduce the Federal deficit, does not contribute to the lowering of retail prices either.
That leaves about $91 Billion of the compliance costs from this study available for price reduction ... further supporting the claim that prices will not decline as much as many FairTax supporters claim.
The study only includes compliance and enforcement costs, not tax planning..billions are spent to understand the tax laws and apply them to one's advantage, not just to comply with them....Tax attorneys and tax accountants do just, interpret plan, and advise on tax laws, whereas compliance does not involve those things, only compilation. The law is full of loopholes and gotchas and it takes professional help to manuever through the minefield..without it you may be paying more than you need to. I'd like to know that 45 accountants come up with the same answer for one tax return than 45 different answers, and that does not even include planning..the system is broken and needs fixing...
NRST is not a miracle that solves all problems but it seems far better than anything else I have seem suggested. Do you believe our current system is fair and simple? Does the power lie with the people or Congress?
Your numbers here are only correct if the estimate of compliance costs is accurate. There are many other estimates that are higher that the one you chose.