[lucysmom]

The item the drug dealer buys from a corporation contains the cost of the labor to manufacture it. The cost of labor includes 7% FICA (employer) plus 9% FICA/Medicare (employee) plus employee withholding (15-20%), all of which flows directly from the employer to the federal government.

The drug dealer is paying these federal taxes today -- they're embedded in the price of the item today.

It is generally agreed that with the FairTax, the employee will get his share of SS and Medicare in his paycheck, plus what would have been with held under the income tax. So business has no savings to pass on there, plus the 30% FairTax will be added to the final price of the good or service,

[robertpaulsen]

Well, to be "fair", business will have their portion of SS plus corporate income tax plus some compliance cost savings.

The agreed-to figure is around 8% (for domestic corporations only), but even that may be high.