Replies

I understand 401ks and Roth IRAs very well thank you; you could have spared me that but let’s quickly zero in on your premise

“...you will instead pay taxes when you consume things during your retirement.”

You already pay taxes in embedded federal taxes under the current system when you consume things. The canard of double taxation on savings was shot down long ago here.

The IRS will be left in place for three years post-enactment to collect all latent taxes from the Income tax era.

Here I find you have bitten into the misunderstanding or misleading “double taxation” of savings argument.

Right now when I purchase a latte at Starbucks or a Sommerfield Router table from Sommerfield Industries, or any retail product or service, I am paying the current tax burden not just of the retailer but of all the suppliers up, down and throughout the supply chain network tapped for bringing that product or service to market.

I am paying alot of federal taxes that are embedded into the price of all things I purchase.

Under the current system if I withdraw from my Roth IRA when I retire and buy that $900 router table I am going to be paying as much as $200 that Mr. Sommerfield and his suppliers and contractors pass on to me, as well as the federal costs embedded into his costs passed on by the entire supply chain that he uses to bring his products to market.

So the idea that I would not be paying taxes again under the current system is absurd.

Under the FairTax, Mr. Sommerfield’s tax burden is eliminated as are the tax burdens of all his suppliers and contractors, and their suppliers and contractors, and so on. But he is required as a retailer to apply the National Retail Sales Tax (NRST) to replace all those embedded taxes.

In a nutshell a simple example is as follows:

Supplier A 2% -> Supplier B 4% -> Retailer 16% -> NRST 0%

Supplier A 0% -> Supplier B 0% -> Retailer 0% -> NRST 23%

The FairTax is a replacement tax, not an additional tax. It shunts all embedded federal taxes to the retail end of the supply chain and replaces them with the NRST. It relieves American industry, freeing up time for more productive efforts and efficiencies. It also makes American products more competitive overseas where there is no NRST applied.

Now if you still buy the absurd double taxation argument I can’t help you because nothing is going to convince you otherwise.

But if you are receptive to learning things a bit deeper, then we can discuss the political downside of the FairTax and what is in works to turn that downside into an upside.

deck chairs/titanic.
end of discussion.

In a nutshell a simple example is as follows:
Supplier A 2% -> Supplier B 4% -> Retailer 16% -> NRST 0%
LOL! Simple but wrong. I hope you don't expect anyone else to think that that adds up to 22%. Using your idiocy if you added more suppliers you could exceed 100% embedded/price reductions.

If all three pay 7.65% payroll tax is the total percentage of payroll tax paid 7.65% or 22.95%?