What leads you to believe that “pressuring our representatives to up the rebate and lower the NRST” would have any more effect than pressuring our representatives to control spending and cut taxes, has we have done for decades?
“has we have done for decades?” s/b “as we have done for decades?”
If you had read the FairTax legislation which comprises only about 140 pages you would have your answer.
The legislative architects of the FairTax were the beneficiaries of some incredible economic insight and brilliance.
The idea is the FairTax replaces all federal income taxes. Now think for a moment, all business taxes find their way into the retail price of a product or a service. In other words, consumers pay embedded taxes in every product or service bought at the retail level (not garage sales, used items, etc.). GDP is made up of more than 80% ccnsumption and consumption is where the retail buyer (the consumer) spends for consuming a product or service.
To answer your question we need to understand what it is that makes the FairTax ***transparent*** because that is key to holding back tax increases and thereby growth of government.
Take the example of a 2X4 piece of lumber sitting on the shelf of Home Depot at a price of $2. How much of that $2 is the result of federal taxes and compliance costs with federal tax filing? The answer is about 23%. The actual cost less all of the taxation up and down the supply chain for the 2X4 on the shelf is $1.54.
Now what the FairTax does is to ‘shunt’ all federal incomes taxes up and down the supply and production chains to the endpoint which is the consumer. The FairTax will charge a tax on that $1.54 2X4 equal to 46 cents and bring the out the door price back to $2. Now inclusive of the $2 the 46 cents accounts for 23% of the purchase. Exclusive of the $1.54 shelf price the 46 cents amounts to a 30 cents sales tax added. That’s a huge amount but that is what the government has brought into our pricing mechanism.
Now all of a sudden people can see what federal taxation has done to their ordinary daily puschases. A 30% sales tax is necessary to fund this bloated government at its current level of funding. This lifts the veil off the effects of the income tax in the prices of every day purchases.
This is a huge wake-up call and of course it is expected that the American consumer will be out for blood. This is a good thing.
And that’s by design. Because the FairTax legislation writes that Congress will vote on the Sales Tax rate once every year (National Retail Sales Tax = NRST).
So we can expect with near certainty that the American consumer will be pressuring their representatives to lower the NRST rate for the annual rate vote and that translates to less revenue for federal government and that means less government and less spending.
The other side of taking revenue away from the feds is to increase our exemption from federal taxation by increasing our rebates.
The two actions: 1) lower the NRST and 2) raise the rebate, both act as a pincer vise on federal government, like a lobster claw the federal government is held in a vise by the American people who can now see the whole picture; no more smoke and mirros, no more shell games.
Transparency is key and yearly votes will reveal who owns the representative in Congress. I will bet that member of Congress will vote to escape the wrath of the people.
I expect members of Congress to pass legislation to pull the veil again over the eyes of the consumer but I don’t think they will be successful once the American people have woken up to the con game that federal government plays with taxation.
The Income Tax must die. And that goes for the cancerous income tax called a ‘Flat Tax’.